Approach

Many professional advisory firms try to distinguish themselves by focusing on a particular industry, or by having one product they try to sell to every potential client. Others will say that everyone is from a particular school or has some specific training. We would rather distinguish ourselves on our approach: to clients, to business problems, and to bridging the gap between plans and results.

We endeavor to embody “high standards, attention to detail, and discipline” in our analysis, planning, and execution. Our client-centered approach means that we’re more interested in solving your problems than in selling a solution. By focusing on fundamentals, striving to move toward execution after every decision, and keeping an eye on cashflow, we bring tangible results to the forefront of every engagement.

To help our clients increase their returns on invested capital, we concentrate on these three areas and their interconnections:

  • Revenue Growth — Our emphasis is identifying the most suitable source of revenue growth: organic or external. Each of these options has its own set of unique drivers and pitfalls, issues that can increase or destroy value if not properly managed. Revenue growth is generally considered advantageous because of the ability to keep the profits from each dollar of marginal revenue. Of course, many management teams lose sight of the idea that growth with negative earnings is the dark side of leverage, and losing more money, more quickly, is a problem that needs immediate attention.
  • Operational Efficiency — We continually challenge client management teams to control expenses in a way that supports the company’s strategy, shifting resources from unprofitable or weak sectors to those that need additional resources to achieve planned results. Where appropriate, we recommend targeted technology-driven productivity investments. (You’ll seldom hear us say “You need to deploy a new ERP.”) The challenge with being overzealous on cost-cutting is that indiscriminate reductions can actually damage the firm’s ability to produce profits.
  • Capital Efficiency — While concepts such as revenue growth and operational efficiency are familiar to most seasoned executives, capital efficiency is a term not often used by middle-market C-level managers. However, some concepts such as reducing the amount of accounts receivable are well-known. The balance sheet provides an opportunity to refine the distribution or allocation of capital provided by operating, investing, and financing activities (as set forth on the cash flow statement).

In addition, we advise clients on two additional means of increasing their returns: ensuring tax efficiency and reducing the cost of, and increasing access to, capital.

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  1. Use 409A risk & expense to improve the company on October 30, 2009 at 1:13 am

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