Replies to post #20051 on Giggles N'''''''''''''''' Hugs Inc. (fka GIGL)

[DeltaWarrior]

Many, many busy restaurants fail not because of poor products or delivery of services but due to bad corporate stewardship.

Haha exactly. Thank you for making my point again. We not only have great products and service, we also have GREAT corporate leadership. Our company execs histories speak for themselves, so we have nothing to worry about on that end.

And yes, what a individual has done successfully in the past plays a vital role in business relationships. Business 101, NETWORKING.

Peter Drucker, the world’s foremost management consultant, held that a fundamental requirement for creating a successful enterprise is “building a top management team long before the new venture actually needs one and long before it can actually afford one.”

A Top Value Driver

Most private equity groups and other professional buyers judge the value of the companies they evaluate as possible acquisitions by assessing the strength of a company’s value drivers, the most important of which is its management. These savvy investors recognize the value of great management teams and don’t always bring in star outside managers to run the companies they buy. In fact, many prefer to acquire a company with strong management in place. Creating, motivating and retaining great managers is key to capturing future business value. Without a strongly motivated and secure management team, the risk to a projected earnings stream is just too high.

Having “best-in-class”, seasoned management is indispensable to any company’s long-term future. The reason is simple: management is responsible for the creation, direction and rate of growth of all other value drivers. Things like customer diversification, a proven growth strategy, sustainable revenue, improving cash flow, competitive advantage and financial controls all depend on good management. More effectively than any other value driver, a top-notch management team creates transferable value.

A business owner cannot be the only person responsible for driving growth if a company is to evolve beyond its current abilities. To realize the potential a buyer will pay for, sellers must create transferable value beyond the limitations of the current owner. When it comes to selling a business, transferable value matters more than the competitive multiple applied to some measure of earnings.

http://www.axial.net/forum/a-strong-management-team-the-top-driver-of-business-value/