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Tip of the Spear Ventures

Venture Capital | Private Equity

sam palazzolo

How to Build Capability to Power Business Transformation | Part 3

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The Point: A program that encourages productive behavior and skills in employees can be a powerful tool for boosting the organization’s productivity. It is also an important element of any successful business transformation. So why do so many leaders get it wrong? In this series, we’re going to explore building employee capabilities, or skills for business transformation… Enjoy!

Business Transformation_Zeroing Agency

Capabilities and Transformation

There are typically four steps to building capability that support a successful business transformation. First, employees are taught new skills. Second, teams apply those skills to their abilities and behavior change. Third, the organization then begins to improve its effectiveness. Fourth and finally, the company achieves its financial goals and other goals/objectives.

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Business Transformation Common Sense Isn’t So Common

This four-step process would make business transformation seem like common sense when it comes to implementing a capability-building program. However, it’s not a common practice, as we have already noted in our previous posts. Why? Companies don’t prioritize capability-building because the learning outcomes are too simple or distracting, or the key C-suite member isn’t interested. This results in lost opportunities that leave the outcome of business transformation programs up to chance.

Business Transformation Ineffectiveness

However, business transformation programs that focus on skill building are often ineffective. A Tip of the Spear Ventures survey of 120 business executives found that nearly 80 percent of respondents believed capability building was very or extremely important for the long-term success of their businesses. This is an increase of 59 percent from before the COVID-19 pandemic. Only one-third of the respondents believed that capability-building programs are successful in reaching their business goals and maximizing their impact on the economy.

A Business Transformation Case Study | Take 1

An international manufacturing corporation’s business transformation experience shows how a strong capability-building program can drive transformation. The company was in the bottom quartile of its OHI score. Within four years, the company’s OHI score had more than doubled and placed it in the second quarter.

The company’s issues of accountability and business unit communications — which were the main causes of its problems — changed the ground-level impact. Roughly 5,000 new ideas were generated by employees who are now engaged, many of which had a positive impact on the bottom line.

These ideas for improvement were a great asset to the company and helped more people achieve their goals. The company’s former Chief Transformation Officer (CTO) stated, “We can’t view everything from up here.” In other words, sometimes great ideas come from deep within the departments of a company. Leadership can help frontline employees develop their capabilities and give them the opportunity to champion an idea and be recognized for their efforts.

A Business Transformation Case Study | Take 2

Another case showed the importance of capability-building in business transformation. A module of capability-building program on effective meetings saved 2 to 3 percent of time in their employees’ schedules. This may not seem like much on an isolated incident episode, but it adds up over a year in the company that has over one thousand employees.

The company’s capability-building efforts made it more agile than its peers. One example was when a group of capability-building workshop participants sat down and predicted what black-swan events could adversely impact the plant in the next year. One of the results was a category 5 hurricane. This is not an everyday or even annual occurrence. The company had to prepare for this contingency by purchasing extra equipment and creating special procedures. As a result, the plant was back online in weeks after an actual hurricane struck. The sixfold increase in shares after implementing the transformation and the capability-building that supported it was also associated with a shorter time span of four years.

Business Transformation Research

Research points to the power and effectiveness of capability building, despite some anecdotal evidence. Recent Tip of the Spear Ventures research showed that employees who engage in capability building during organizational transformations have an effect on organizational health. Exposing at least 10% of their employees to these programs was twice as likely for success as organizations that did not. The average improvement rate was nine percentile points, versus zero improvement. The organizations that had more than 30 percent of their workforce participate in formal capacity-building programs increased by an average 12 percentile places.

These economic benefits are real. Our analysis revealed that companies that included more than 30% of their workforce in capability-building programs enjoyed total shareholder returns of 43 percent higher than the benchmarks after 18 months. The benefits are not only for employers, but also flow back to employees. It turns out employees actually love learning new skills!

SUMMARY

It is difficult to implement and sustain business transformations. Many thousands, sometimes hundreds, of thousands of employees need to be involved and aligned regardless of their location, language or culture. Organizations can develop the mindsets and behaviors necessary to drive a change and reach their full potential through capability-building programs that are effective.

Sam Palazzolo

The Art of the Executive Briefing

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The Point: There are many external circumstances that can affect your executive briefing to senior leaders. While you may have compiled the best statistics, computations, and relevant facts for an Executive Briefing, this “science” part of an Executive Briefing could very well be undermined if you don’t pay attention to the “art” of conducting one. Be prepared to communicate your points under pressure by knowing the interpersonal dynamics in play. What are the leaders’ tells – the most effective way to brief them? How do they prefer to interact with their briefings? Who do they turn to for endorsement? These key aspects of the executive briefing will allow you to respond effectively to executive concerns/pushbacks and then pivot when needed while you are briefing. So, in this article we explore the art of the executive briefing… Enjoy!

The Art of the Executive Briefing

The Case for Executive Briefings

I’ve been consulting with organizational senior leadership for nearly three decades. At the beginning of my consulting career, I literally stumbled upon the Executive Briefing. In my mind, the Executive Briefing is a skill that consultants should be skilled at, even under stressful circumstances. Briefing senior executives is a difficult task. They are skilled at compressing the right information in the right time. These skills are applicable to briefing any executive at the C-suite.

There are many tips on how to brief senior leaders: Keep it short, keep the message front-loaded, etc. These are great tips, but they don’t take into account the interpersonal aspects that are crucial to a successful executive briefing. You can make or break your presentation before it starts. Your chances of success are even worse if you neglect the personal aspects of who it is you’re briefing.

These tips were developed from my experiences as a consultant and as a teacher of briefing skills at seminars across the country. These tips are important, regardless of whether briefings are held in person or online. Let’s dig in and look at the art of the Executive Briefing in two sections — Executive Briefing Preparation and Conducting the Executive Briefing.

Executive Briefing Preparation

When it comes to successful Executive Briefings, the adage ‘Failing to plan is planning to fail’ should be forefront in your mind. In other words, you’re going to have to plan!

Identify the “Crucial Ally.” Picture in your mind that you are conducting the Executive Briefing with an organization’s president and a few of their senior leadership team members. At some point during the executive briefing, the president will look for a facial expression from a member of their senior leadership team that affirms what you are saying at a crucial moment during the briefing. The boss needs that person to say “Yes.” This is a calm gesture that shows the boss that they are confident in your idea and that all the relevant people have been consulted. Without such supportive nod, as the presenter of the executive briefing you will be asked questions and reasons for doubt could arise. I’ve been both presenter and receiver of executive briefings, and I can honestly say that a non-confirming glance from a Crucial Ally is seen as non-endorsement which can be worse than death.

Before you present your idea, identify the Crucial Ally who will be in the briefing (It may vary depending on the issue, ranging from a single Crucial Ally or multiple people). Consult with the Crucial Ally in advance. Although the executive you are briefing might not have a Crucial Ally, there is a good chance they have trust in certain people more so than others. The Crucial Ally is essential to your Executive Briefing success.

Know Your Leaders’ “Tells.” If you spend a lot time with the leader, you need to be able to recognize the nonverbal cues such as “go deeper on this point” or “speed up.” Ask the leader what you should look out for in order to tell if he is upset and if there are any ways to determine if it is related to something you have said. Ask how to react to negative signals in order to change the mood. Understanding your leaders’ body language will allow you to keep cool and steer in the right direction during briefings.

Learn How Your Leader Interacts with the Material. Different people react differently to information. One senior leader whom I briefed would ask questions and push back hard on any point in any executive briefing, no matter how small or large (Perhaps because they were trained as an attorney – Fill in your favorite lawyer joke here!) This made some colleagues feel intimidated and they eventually became “Yes” people, losing his respect. Others jumped into fights every time, which made him appear closed-minded and agitated. This leader was respected by his colleagues who chose their battles well. They chose to accept the “Yes” when they could, and then pushed back when it was most important. This showed flexibility, but also confidence in their opinions. You’ll be more prepared to communicate information effectively and respond to criticism if you are aware of the leader’s style.

Plan for Both Success and Failure. Before you walk in the door, it is important to identify what you want from a meeting. Here’s an interesting twist. Don’t view it in terms of success or failure. Bring your “ask,” but also contingency plans to cover multiple outcomes, such as success or failure. You can offer a reduced version of your proposal if the conversation is moving toward “No.” If your idea is proving successful, you can offer additional ideas or ways to speed up the timeline. Think of how you can win a small victory rather than a complete defeat, keep your idea alive for another day, or go faster and bigger in implementation.

Conducting the Executive Briefing

Pay Attention to the Audience — NOT your Notes. You must be able to understand body language and cues from the crowd assembled, regardless of whether the briefing takes place in person or virtually. This will ensure that you are not paying attention solely to your material by the end of the executive briefing. Your mental energy should be focused on the room, finding openings and avoiding pitfalls. This rule has a corollary: “Take cues, but not notes” — In fact, if you are able, ask someone to take notes for you so that you can be fully present in the moment.

Focus on Your Task. You can be distracted by competing interests or time pressure during Executive Briefings, but keep your eyes on the goal. You are there to ask the right questions and to make it a priority. Pre-plan multiple ways to redirect the conversation to get the information you need. It is a rare ability to be persistent and deft all at once. And you don’t want your colleagues to think that you are a stiff or a robot. Meetings can be interrupted or cut short in a fast-paced environment. To reduce the chances of a briefing being interrupted, avoid introducing unnecessary details or deviating from your request.

Learn to be Silent. Now you have either posed your question or floated an idea during the Executive Briefing. You’ve started the discussion and you now need to be extremely strategic about when and how to add your voice. An executive engages others in the room, or thinks aloud. You could upset your leader or cause confusion by speaking at the wrong time. You don’t have to unnecessarily confirm or display your knowledge – Now is not the time. If the conversation is trending against your side, you can take your best shot at trying to bring things back on track. Many times though, I have found NOT speaking at the wrong time can be just as important as speaking at a right time.

SUMMARY

In this post, we’ve explored the Art of the Executive Briefing, specifically looking at Executive Briefing Preparation and Conducting the Executive Briefing. Your Executive Briefing will be affected by circumstances outside your control. These could include a crisis unrelated to your presentation or the stress level of the leaders you brief. Although you can’t guarantee success, it is possible to focus on interpersonal dynamics and improve your situational awareness before you arrive in the Executive Briefing. It will make you more effective in communicating the right message when under pressure.

Sam Palazzolo, Managing Director @ Tip of the Spear Ventures

How to Build Capability to Power Business Transformation | Part 1

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The Point: A program that encourages productive behavior and skills in employees can be a powerful tool for boosting the organization’s productivity. It is also an important element of any successful business transformation. So why do so many leaders get it wrong? In this series, we’re going to explore building employee capabilities, or skills for business transformation… Enjoy!

Business Transformation_Zeroing Agency

Imagine this: An international manufacturing company employing thousands is separated from its parent. Within a year, the stock price of an international manufacturing corporation with thousands of workers drops by more than 80 percent. Morale plummets and the company’s health measures fall into the bottom quartile of its industry. Something is here… very wrong.

What you think is happening as a leader, versus what actually is happening is typically very different!

Sam Palazzolo, Managing Director @ Tip of the Spear Ventures

Four years later, the stock price of the company has increased sixfold. The corporation has moved from the bottom to the second quartile in terms of organizational health. Employees feel more connected and are invested in the company’s success. With increased discipline and better risk management, plant safety has been dramatically improved. Customers are astonished at the improvements and have celebrated them. One customer even called the CEO to tell him that the manufacturer would be his preferred vendor moving forward.

What changed? This real-life example shows how a manufacturing company transformed its performance and organizational health. It also changed the way it looked at “capabilities,” which are the hard and soft skills required to help organizations achieve and sustain their full potential.

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We know that many companies fail to meet their potential when it comes enterprise-wide transformations. Although most organizations understand the importance of having a motivated and skilled workforce, they don’t spend enough time or resources on developing them. It is easy to overlook an opportunity that could be irreplaceable, while the priorities are elsewhere. Others might find foundational capability building too easy. The CEO and organizational leadership might think that we already do this. However, we have found that what seems like common sense in an organization is not often practiced across the organization, which leaves room for better performance. In other words, common sense is NOT so common.

Capability building is more than just training employees. It’s about fundamentally changing the way work is done. It is also a great way to get people involved in supporting the transformation, from the top to the bottom. It is almost impossible to achieve and sustain a successful transformation without that energy. Companies can build the capability to achieve transformational gains. They also add to their gains over time by establishing an execution engine that will continuously improve value.

This article will discuss the key elements of a strong capability-building program. As the global manufacturing corporation went through a holistic transformation, we show that empowering employees with new skills can not only enable sustainable change at large scale, but also help the bottom line.

Sam Palazzolo

30 Days to ETA | Day #30 – SUMMARY

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If you’ve been reading along in this 30 Days to ETA series, you know that in the Day #29 post I shared congratulations — You made it to Entrepreneurship Through Acquisition (ETA)! But before you start popping those champagne bottles, you’d better have a plan for the next day of running your business. As an Acquisition Entrepreneur you should have the first 100 days lined out — Something I call The ETA First 100 Days (You can read the previous post by CLICKING HERE). Now that we’re officially at Day #30, Congratulations are truly in order! As an Acquisition Entrepreneur you should relish the accomplishment. So, in today’s 30 Days to ETA post, we’re going to review the last 30 days with a Summary… Enjoy!

30 Days to ETA Summary

Entrepreneurship Through Acquisition (ETA) is a journey to buy a business, and it seems like everyone I know that goes through ETA has a slightly different experience. At Tip of the Spear Ventures Mergers & Acquisitions practice, I see some who move through the process fast, stumbling into success in a matter of weeks after executing a brilliant ETA Strategy. Others move slowly, spending years of their lives perfecting the art of Acquisition Entrepreneurship. Some go back to college for years getting a master’s level education in business, and others get started before they even finish high school.

Yes, I’m here to tell you that there is no one 30 Days to ETA road that leads to success for everyone. Acquisition Entrepreneurship is a diverse and rewarding journey, but even so, there are certain hallmarks of the entrepreneurship experience that almost everyone goes through at one point or another. What follows is a summary of where we visited along this 30 Days to ETA journey.

30 Days to ETA | Day #1 – Startup or Acquisition?

My goal for this 30 Days to ETA Series is simply to walk you through the journey of sourcing, searching, and ultimately buying a business. However, make no mistake about this whole world of Mergers & Acquisitions… There is nothing “simple” about it! And in this Day #1 post we’ll explore whether as an Entrepreneur you should Startup or Acquisition — That is, should you start your own business from scratch (i.e., Startup) or buy a business that’s already in existence (i.e., Acquisition).

30 Days to ETA | Day #2 – Leading Your Business

In this 30 Days to ETA post, we’ll explore the topic of leading your business. Sounds pretty simple/straightforward, but there is a twist to consider! Specifically, if in Day #1 we tackled the decision of Startup or Acquisition (You can read the post by CLICKING HERE), in this post we’ll look at leading your business so as to create value or increase business valuation. Why? It’s keeping in line with our identification of the desired endpoint of the business. A business that you lead effectively should increase in value, and therefore be worth more to prospective buyers when you ultimately determine to exit. Understanding business valuations will help you as you start out on your Entrepreneurship Through Acquisition journey!

30 Days to ETA | Day #3 – The ETA Business Plan

In my most recent post in this 30 Days to ETA series, Leading Your Business, I explained that you can’t begin a business if you don’t know how it’s going to end. You have to identify where you want to go and why you are going there before you can figure out what type of business to acquire (You can read the post by CLICKING HERE). You must think strategically about the value of your business and then work to increase, or accelerate that value tactfully. And one of the best ways to start that process is by building a plan… The ETA Business Plan!

30 Days to ETA | Day #4 – Your ETA Competitive Advantage

In my most recent post in this 30 Days to ETA series, The ETA Business Plan, I shared that you can go anywhere you want with your business, but you’ll get there faster if you establish a Business Plan. The adage “A goal without a plan is just a dream” has never been more true (You can read the post by CLICKING HERE). Part of that plan, and foundational to the process, is identifying your ETA Competitive Advantage. Thinking strategically about the value your business brings to the market and the benefits it provides should be advantages you look to capitalize on. And your ETA Competitive Advantage should be identified/contingency planned while looking at businesses to acquire!

30 Days to ETA | Day #5 – Enduring Profitability

If you’ve been reading this 30 Days to ETA blog series, you’ve learned that having a business plan is essential for end results for success and that you should have that “end state” mentality in mind as you look to acquire a business. We’ve also explored your ETA Competitive Advantage that should allow you to be strategic in your direction and tactful in your actions to execute that business plan (You can read the previous post by CLICKING HERE). But there’s a key organizational attribute that you should screen for while conducting your Entrepreneurship Through Acquisition (ETA) process, that being Enduring Profitability. So in this 30 Days to ETA post, we’ll explore the concept of Enduring Profitability and how it should form the cornerstone of your search criteria… Enjoy!

30 Days to ETA | Day #6 – The ETA Team

If you’re following my 30 Days to ETA series, you know that my goal is to help you find a business to either merge with or acquire. In our last post, we explored how to add value to your company so that when it comes time to sell it, you maximize the sales price as much as possible (You can read the previous post by CLICKING HERE). In this article, we’re going to focus on what it really takes to be an Entrepreneur Through Acquisition, namely you don’t need to do it alone. Instead, you’re going to need to bring a team with you (Your ETA Team). Think of Your ETA Team as a group of specialists you hire to help you in your Mergers & Acquisitions endeavor, and you’ll want the best people on this team! We’ll also look at your organization team (Who will help you in running your business)… Enjoy!

30 Days to ETA | Day #7 – ETA Financials & Cash Flow

No matter how strong your 30 Days to ETA business plan is or how well you grow your team (You can read the previous post by CLICKING HERE), if your business does not have enough in its cash reserve to survive the ups and downs of the economy, black swan events, or minor financial storms selling your soon to be acquired business in the future will be a non-issue. In order to secure outside funding or know how much money you need to personally bring to the closing table, you must know how to calculate how much of a cash reserve your business needs to have on hand to withstand hard times. So in this post we’ll explore ETA Financials & Cash Flow and how they fit in with your 30 Days to ETA execution… Enjoy!

30 Days to ETA | Day #8 – Leading Yourself

Most recently in our 30 Days to ETA series, I’ve been dissecting the business characteristics that maximize or multiply your future company’s resale value. I’ve shared how to master competitive advantage, make your business scalable, hire a great staff, and build a cash reserve to weather the business storms (You can read the previous post by CLICKING HERE). Before leaping from our business’s acquisition to its growth phase further, I want to talk to you about leading yourself — the personal side of your business’s sustainability — Your personal sustainability: your physical well-being and how it affects your business’s value. Why? A strong mind requires a strong body to achieve the final destination of success… Enjoy!

30 Days to ETA | Day #9 – ETA Mission, Vision, & Values

If you are following this 30 Days to ETA series, you have built your business plan and hired the team to drive your long-term goals. In our last post, I stressed the importance of leading yourself (You can read the previous post by CLICKING HERE). One of the aspects of Entrepreneurship Through Acquisition that I find most rewarding is finding/aligning with a culture that resonates. The foundation for that culture is the ETA Mission, Vision, & Values that you profess to and the business you’re looking to acquire says they already have/stand for. So in this post, we’ll explore exactly that… Enjoy!

30 Days to ETA | Day #10 – ETA Culture

In our last post in this 30 Days to ETA series, we discussed your ETA Mission, Vision, & Values (You can read the previous post by CLICKING HERE). Having clarity in the Entrepreneurship Through Acquisition strategy is paramount, and nothing signals that more than your identification of where you want to go with your future business. In this post, we’re going to explore the backbone of how you will get to that future destination via ETA Culture. ETA Culture is your business’ values and culture that will shape owner-employee relations. The business that has outstanding values and inviting culture can help bring top dollar at the time you want to eventually sell… Enjoy!

30 Days to ETA | Day #11 – ETA Entity Formation

If you’ve been reading this 30 Days to ETA series, you know that in the Day #10 post I stressed the importance of creating an ETA Culture (You can read the previous post by CLICKING HERE). In today’s 30 Days to ETA post, we’re going to discuss how choosing the right type of business entity at a company’s creation can effect its liability and its ability to sell when it comes time (i.e., ETA Entity Formation). Many people believe that in business exit planning, the idea of preparing a business to sell, occurs just prior to the owner’s desired exit time. This couldn’t be further from the reality of what should happen. Acquisition Entrepreneurs know that in their Entrepreneurship Through Acquisition journey that the time to prepare their future company for sale is at the onset, not as you’re contemplating your exit. Some of the planning we business owners need to do should be done five to ten years before the sale ever occurs, so starting at the beginning with the end in mind should make sense… Enjoy!

30 Days to ETA | Day #12 – ETA Metrics/KPIs

If you’ve been reading this 30 Days to ETA series, you know that in the Day #11 post I discussed how your ETA Entity Formation is an important structural item on your journey to Entrepreneurship Through Acquisition (You can read the previous post by CLICKING HERE). In today’s 30 Days to ETA post, as an Accountant I want to look at two of my favorite things in the business world – facts and figures in the form of ETA Metrics/KPIs. We’re going to deal with the financial reports your future business needs to provide to not only lead the organization successfully, but allow interested buyers to see how great a business you have. Remember our end-game when it comes to Acquisition Entrepreneurship, that in order to make a business sellable we have to provide buyers with accurate financial reports that show our historical growth, our current financial status, and our business’s potential growth in the future…. Enjoy!

30 Days to ETA | Day #13 – ETA Risk Mitigation

If you’ve been reading along in this 30 Days to ETA series, you know that in the Day #12 post I discussed how your ETA Metrics/KPIs allow you to establish a scoreboard for your journey to Entrepreneurship Through Acquisition (You can read the previous post by CLICKING HERE). In today’s 30 Days to ETA post, a wise person once told me, “Somebody else’s experience is a far better teacher than your own.” I wish I had listened to that advice. If I had understood the vital role of a business risk assessment in the purchase of a business, I might have avoided making the single biggest mistake of my business career… Enjoy!

30 Days to ETA | Day #14 – ETA Engagement

If you’ve been reading along in this 30 Days to ETA series, you know that in the Day #13 post I discussed how your ETA Risk Mitigation — if done properly — will allow you to avoid big and costly mistakes in your journey to Entrepreneurship Through Acquisition (You can read the previous post by CLICKING HERE). I know that you know the saying, “No risk, no reward!” I also know that strategic risks take into account lead to your motivation. Some of us are motivated by fame, others by money, etc. In today’s 30 Days to ETA post, we’re going to explore what drives ETA Engagement, or the motivations associated with owning/running a business with a team… Enjoy!

30 Days to ETA | Day #15 – The ETA Business Team

30 Days to ETA | Day #15 – The ETA Business Team

June 15, 2021 By Sam Palazzolo, Managing Director (Edit)

If you’ve been reading along in this 30 Days to ETA series, you know that in the Day #14 post I discussed how to achieve ETA Engagement amongst your future employees. Why? It’s awfully difficult — Impossible! — to achieve happy customers if you have unhappy team members, and happy team members are engaged team members in your journey to Entrepreneurship Through Acquisition (You can read the previous post by CLICKING HERE). But what if there was a way to build the company of your dreams with an ETA Business Team? An awesome ETA Business Team that pulls just as hard as you do towards the business goal of not only acquiring, but building a company in order to sell it for maximum profit. In today’s 30 Days to ETA post, we’re going to explore how we can assemble our dream ETA Business Team of employees and executives, and in doing so how we can cultivate company culture and add employee incentive programs to ensure our ETA Engagement adds to company success… Enjoy!

30 Days to ETA | Day #16 – ETA Deal Flow

If you’ve been reading along in this 30 Days to ETA series, you know that in the Day #15 post I discussed how to achieve The ETA Business Team. I’ve said it before and I’ll say it again, people are the most important ingredient in your journey to Entrepreneurship Through Acquisition (You can read the previous post by CLICKING HERE). So, even though so far in this series we’ve spent a lot of time talking about strategic initiatives within the business, it’s time we pull up to explore ways in which you can find that business. In today’s 30 Days to ETA post, we’re going to explore how we can create a system where business owners, and those that have a business for sale — Brokers, Attorneys, CPAs, Bankers, etc. — can find you to present the business… Enjoy!

30 Days to ETA | Day #17 – The ETA Exit Plan

If you’ve been reading along in this 30 Days to ETA series, you know that in the Day #16 post I discussed how to maximize ETA Deal Flow. You need to analyze a lot of businesses in order to get one to purchase in your journey to Entrepreneurship Through Acquisition (You can read the previous post by CLICKING HERE). But even though you’ve found the perfect business and were fortunate to purchase it, I’m going to encourage you to focus on the end. In today’s 30 Days to ETA post, we’re going to explore how that end-game focus — The ETA Exit Plan — can provide you with all kinds of benefits, especially financial benefits if you do things right… Enjoy!

30 Days to ETA | Day #18 – The ETA Conglomerate

If you’ve been reading along in this 30 Days to ETA series, you know that in the Day #17 post I discussed how as Acquisition Entrepreneurs we need to have focus on the end with The ETA Exit Plan. While you need to buy your business via Mergers & Acquisitions at the right strike-price, it’s equally important as a part of due diligence to sell the business right as well as a part of your Entrepreneurship Through Acquisition journey (You can read the previous post by CLICKING HERE). But what if you get into this as an entrepreneur and you find out you really enjoy owning a business? I mean, what’s better than owning a single business? Two or more businesses! So, in today’s 30 Days to ETA post, we’re going to explore how you can expand/create an empire by owning multiple companies — The ETA Conglomerate… Enjoy!

30 Days to ETA | Day #19 – The ETA Business Valuation

If you’ve been reading along in this 30 Days to ETA series, you know that in the Day #18 post I discussed how as Acquisition Entrepreneurs one of the paths forward for you could be The ETA Conglomerate. If you love what you do, and in doing so want more love, then it’s natural to want to explore owning more than one business as a part of your Entrepreneurship Through Acquisition journey (You can read the previous post by CLICKING HERE). Part of the ETA difficulty as an entrepreneur is identifying the value you should be willing to pay for a business. So, in today’s 30 Days to ETA post, we’re going to explore how you can create and justify the price you should pay based off of objective versus subjective criteria — The ETA Business Valuation… Enjoy!

30 Days to ETA | Day #20 – ETA Business Law

If you’ve been reading along in this 30 Days to ETA series, you know that in the Day #19 post I discussed how as Acquisition Entrepreneurs you can create and justify the price you should pay based off of objective versus subjective criteria — The ETA Business Valuation. Part of the ETA difficulty as an entrepreneur is identifying the value you should be willing to pay for a business as a part of your Entrepreneurship Through Acquisition journey (You can read the previous post by CLICKING HERE). Another ETA difficulty is knowing who you can trust. No matter how many jokes you’ve heard about lawyers, good attorneys can save you hundreds of thousands — or even millions — of dollars when it comes time for you to acquire a business. So, in today’s 30 Days to ETA post, we’re going to explore how you can identify and hire this vital part of your Professional ETA Team — ETA Business Law… Enjoy!

30 Days to ETA | Day #21 – ETA Mistakes

If you’ve been reading along in this 30 Days to ETA series, you know that in the Day #20 post I discussed how as Acquisition Entrepreneurs you can identify and hire the most vital part of your Professional ETA Team — ETA Business Law. No matter how many jokes you’ve heard about lawyers, good attorneys can save you hundreds of thousands — or even millions — of dollars when it comes time for you to acquire a business (You can read the previous post by CLICKING HERE). Another ETA difficulty is the opportunity to make mistakes. You are going to make mistakes, but how you recover from them will make a massive difference. So, in today’s 30 Days to ETA post, we’re going to explore ETA Mistakes… Enjoy!

30 Days to ETA | Day #22 – ETA Deal Flow | Brokers

If you’ve been reading along in this 30 Days to ETA series, you know that in the Day #21 post I discussed how as Acquisition Entrepreneurs you can bet that there will be mistakes made, something I call ETA Mistakes. You can make one mistake, or you can make one million! Regardless of how many mistakes you make, how you recover from them will make a massive difference (You can read the previous post by CLICKING HERE). One mistake that I see time and again made by Entrepreneurs Through Acquisition (ETA) is not having enough opportunities in the Mergers & Acquisitions pipeline. So, in today’s 30 Days to ETA post, we’re going to explore ETA Deal Flow | Brokers… Enjoy!

30 Days to ETA | Day #23 – ETA Industry / Business ID

If you’ve been reading along in this 30 Days to ETA series, you know that in the Day #22 post I discussed how as Acquisition Entrepreneurs there is one mistake that I see time and again made by Entrepreneurs Through Acquisition (ETA), that being not having enough opportunities in the Mergers & Acquisitions pipeline. So, in yesterday’s 30 Days to ETA post, we explored ETA Deal Flow | Brokers (You can read the previous post by CLICKING HERE). I believe that if you fill your Mergers & Acquisitions pipeline with qualified companies to explore acquiring, life will become easier for you. But how will you know which businesses are right and which businesses are wrong to begin the filtering process on? So, in today’s 30 Days to ETA post, we’re going to explore ETA Industry / Business ID… Enjoy!

30 Days to ETA | Day #24 – The ETA Confidential Information Memorandum (CIM)

If you’ve been reading along in this 30 Days to ETA series, you know that in the Day #23 post I believe that as an Acquisition Entrepreneur if you fill your Mergers & Acquisitions pipeline with qualified companies to explore acquiring, Entrepreneurship Through Acquisition life will become easier for you. But how will you know which businesses are right and which businesses are wrong to begin the filtering process on? So, in yesterday’s 30 Days to ETA post, we explored ETA Industry / Business ID (You can read the previous post by CLICKING HERE). But identifying seller personas and industry specifics are not enough. You’ll want to know how to rip apart the information you receive as a part of due diligence. The center piece of this information is the Confidential Information Memorandum, or CIM. So, in today’s 30 Days to ETA post, we’re going to explore The ETA Confidential Information Memorandum (CIM)… Enjoy!

30 Days to ETA | Day #25 – The ETA Owner Interview

If you’ve been reading along in this 30 Days to ETA series, you know that in the Day #24 post I identified as an Acquisition Entrepreneur that seller personas and industry specifics are not enough in your Mergers & Acquisitions journey. You’ll want to know how to rip apart all of the information you receive as a part of due diligence. The center piece of this information is the Confidential Information Memorandum, or CIM as an Entrepreneurship Through Acquisition professional (You can read the previous post by CLICKING HERE). But your ability to analyze reports, or the CIM is not enough. You’re going to have to conduct interviews with key parties on the seller’s side of the equation successfully. These interviews need to be done so that you gather all of the missing pieces of information you need to proceed — if justified. So, in today’s 30 Days to ETA post, we’re going to explore The ETA Owner Interview… Enjoy!

30 Days to ETA | Day #26 – The ETA Letter of Intent (LOI)

If you’ve been reading along in this 30 Days to ETA series, you know that in the Day #25 post I shared that your ability to analyze reports, or the CIM will not be enough as an Entrepreneur Through Acquisition (ETA). You’re going to have to conduct interviews with key parties on the seller’s side of the equation successfully. The ETA Owner Interview needs to be done so that you gather all of the missing pieces of information you need to proceed — if justified (You can read the previous post by CLICKING HERE). Finding, researching, conducting preliminary due diligence — as well as interviews — are all precursor to what is considered by most to be the first step in the formal business sale, the Letter of Intent (LOI). So, in today’s 30 Days to ETA post, we’re going to explore The ETA Letter of Intent (LOI)… Enjoy!

30 Days to ETA | Day #27 – ETA Capital

If you’ve been reading along in this 30 Days to ETA series, you know that in the Day #26 post I shared as an Entrepreneur Through Acquisition (ETA), finding, researching, conducting preliminary due diligence — as well as interviews — are all precursor to what is considered by most to be the first step in the formal business sale, the ETA Letter of Intent – LOI (You can read the previous post by CLICKING HERE). Now that you have the found the business and the ownership vision is in sight, how are you going to fund it to make it a reality? So, in today’s 30 Days to ETA post, we’re going to explore ETA Capital… Enjoy!

30 Days to ETA | Day #28 – The ETA Purchase Agreement (PA)

If you’ve been reading along in this 30 Days to ETA series, you know that in the Day #27 post I shared that finding a business is good, but being able to fund what you find is even better, something I referred to as ETA Capital (You can read the previous post by CLICKING HERE). So, by this time in your Entrepreneurship Through Acquisition (ETA) journey you have found a business, determined how you are going to fund it, and successfully conducted due diligence under Letter of Intent (LOI)… Now all you need to do is purchase the business. Ok, that’s not all, but that is what’s next. So, in today’s 30 Days to ETA post, we’re going to explore the ETA Purchase Agreement (PA)… Enjoy!

30 Days to ETA | Day #29 – Leading Your Business | The ETA First 100 Days

If you’ve been reading along in this 30 Days to ETA series, you know that in the Day #28 post I shared that by this time in your Entrepreneurship Through Acquisition (ETA) journey you have found a business, determined how you are going to fund it, and successfully conducted due diligence under Letter of Intent (LOI)… Now all you need to do is purchase the business with the ETA Purchase Agreement (PA) (You can read the previous post by CLICKING HERE). Congratulations, you made it to Entrepreneurship Through Acquisition (ETA)! Before you start popping those champagne bottles, you’d better have a plan for the next day of running your business. As an Acquisition Entrepreneur you should have the first 100 days lined out! So, in today’s 30 Days to ETA post, we’re going to explore Leading Your Business | The ETA First 100 Days… Enjoy!

SUMMARY

So there you have it… 30 days up, 30 days down! You are well on your way to becoming an Acquisition Entrepreneur or Entrepreneurship Through Acquisition. But wait, you probably know just enough to be dangerous! If I, or my Tip of the Spear Ventures Team can help you reach your ETA goal please reach out (acquisitions@tipofthespearventures.com). Better yet, we’re launching our Entrepreneur In Residence program specifically for leaders who want to become owner-operators of a business (You can read more about the program by CLICKING HERE). I hope you’ve enjoyed this 30 Days to ETA series as much as I enjoyed writing it!

Sam Palazzolo

30 Days to ETA | Day #29 – Leading Your Business | The ETA First 100 Days

By

If you’ve been reading along in this 30 Days to ETA series, you know that in the Day #28 post I shared that by this time in your Entrepreneurship Through Acquisition (ETA) journey you have found a business, determined how you are going to fund it, and successfully conducted due diligence under Letter of Intent (LOI)… Now all you need to do is purchase the business with the ETA Purchase Agreement (PA) (You can read the previous post by CLICKING HERE). Congratulations, you made it to Entrepreneurship Through Acquisition (ETA)! Before you start popping those champagne bottles, you’d better have a plan for the next day of running your business. As an Acquisition Entrepreneur you should have the first 100 days lined out! So, in today’s 30 Days to ETA post, we’re going to explore Leading Your Business | The ETA First 100 Days… Enjoy!

30 Days to ETA - Leading Your Business | The ETA First 100 Days

Leading Your Business | The ETA First 100 Days

After the formalities of document signings at the closing table, the business broker or M&A Advisor will often arrange and sometimes pay for a celebratory dinner. If your transition expert sets up a dinner, they will usually schedule closing in the late afternoon so that everyone can leave the closing table and go directly to a nice dinner. I’ve been to many of these celebrations where the ETA Professional Team members, employee team members, friends, and family members attend to commemorate the moment of success… Entrepreneurship Through Acquisition has arrived!

Many times, these particular events aren’t that dissimilar from a wedding celebration except you’re the best man, and the bride is your business. Most likely, you’ll get up and give a speech. Maybe you’ll tell funny stories about highs and lows you experienced in your search for a business. You’ll even recognize key people who helped you along your way. You may even receive gifts from certain employees, advisors, and others.

But don’t get drunk on too much champagne or feelings of goodwill… You have a business to run that is now owned by you — So you should probably get going!

Leading Your Business

I remember my first business acquisition. I signed the documents, and I went out with some friends to celebrate the accomplishment. It wasn’t until I got home and laid down for the night that it hit me… “What did I just do?” You know, I just bought a business. Did I make the right move? What do I do now? Worries and questions ran through my head all night long. And honestly, a minor panic attack ensued.

You’re probably going to be in the same boat I was. At the end of the day you acquire a business, you’re going to experience a myriad of emotions. Everything you’ve worked for has now come to fruition. Your friends, family members, advisors, planners, and employees will probably be there throughout the day to celebrate with you. By the time you get to the end of the day, the adrenaline will wear off. Things will settle down, and anxiety may creep in.

Obviously, you’re going to experience excitement and happiness. I mean, you’ve planned this day for months/years and isn’t it great that the day finally arrived? However, you’ll probably second guess your decision, too. So whenever you reach this point in ETA, remember that it’s just the start. There is so much more to life! No matter how old or young you are, there is so much more to live for, and now you have a business to run in addition.

The ETA First 100 Days

On July 24, 1933, Franklin Delano Roosevelt gave a radio address in which he coined the term “first 100 days.” For our recent acquisition, it’s an important perspective to take into account. On that day, Roosevelt famously said “We all wanted the opportunity of a little quiet thought to examine and assimilate in a mental picture the crowding events of the hundred days which had been devoted to the starting of the wheels of the New Deal.” Congratulations… Your new business is your New Deal!

Over the past months, you should have been compiling the pages to make your ETA First 100 Days playbook. Within this playbook, you should have four main components:

  • Strategy
  • Execution
  • Cash (Revenue Drive!)
  • People

Unfortunately, at Tip of the Spear Ventures’ Mergers & Acquisitions practice I see leaders all the time that take over a business and have no plan. Perhaps the plan is to run it the same way the previous owner had. Perhaps they plan on “winging” it. But both of these “perhaps” will lead you nowhere fast!

When you first identified the business that you just acquired, you should have developed a list of potential levers — areas of improvement that if you bought the company you could flip to dramatically increase the revenue of the business. What are those levers?

The ETA First 100 Days is a time when you should have these levers and components pre-developed for an action plan. When you take over the business, while late, is not a good position to be in to start to assemble the plan. What are you going to do? Who will you need to do it with you? Why will what you’re doing align with your new organizations mission, vision, and values? These are but a few of the ETA First 100 Days you’ll want to identify well in advance of the first day of ownership.

At Tip of the Spear Ventures, we’re famous for aggressively setting out to accomplish goals during The ETA First 100 Days. However, and this is a nod of respect to the previous owners, we spend the first week (7 Days) attempting to seek first to understand, then to be understood. In other words, even though we’re default – aggressive in this time, we want to understand why things have been running the way they have. With a firm understanding, we then set to implement/execute our plans for ETA First 100 Days.

SUMMARY

Congratulations are in order… You made it to Entrepreneurship Through Acquisition (ETA)! As I previously cautioned, before you start popping those champagne bottles you’d better have a plan for the next day of running your business — You should have the first 100 days lined out! So, in today’s 30 Days to ETA post, we’re going to explore Leading Your Business | The ETA First 100 Days… Enjoy! Ultimately, a closing isn’t the end, but your new beginning.

Sam Palazzolo