Most of the time when you hear about a company being bought out, there is a ripple of panic that goes through the entire company. Layoffs are expected and an entirely new management team is expected to arrive at any moment. Time studies will most likely be done and people who have been doing their jobs correctly for years will start questioning every step the new team will take as they attempt to grow the company.
When it comes to entrepreneurship and commercializing companies, some of these same things should be expected. After all, small businesses are not the same as commercial level businesses, so the methods used are bound to be different. If the current staff wants to be a part of the commercialization, some adjustments may have to be done once the staff is evaluated.
Management on the commercial level is a whole new ball game. Though some managerial skills are the same across the board, the level of those skills need to show some potential for growth. This may mean that the current management team is perfect for the current setting, but may need to seek outside resources in order to meet the needs of a commercial setting. For instance, how are the finances managed? Small businesses cannot buy in bulk as often and they do not have to make decisions concerning large amounts of money and risk management. If the current management team is unable to realize a profit or get the bills paid under the current circumstances, commercialization may be something they cannot handle.
Part of the business valuation process deals with the skills of the management team. If the team is unable to handle the current situation, offering them more weight on their plate is unlikely to be helpful. If the team is flexible and shows a high level of organization and a willingness to build on current skills, they will most likely see a more promising valuation.
Dale S. Richards specializes in management, marketing, operation optimization & business valuation consulting and is a 20+ year turnaround expert. He has implemented success concepts into results in 150+ companies. Dale is a Certified Valuation Analyst (CVA) with NACVA, a Vistage International CEO Board Chair in Utah and a Vistage International approved Speaker. Visit www.successbiznow.com to learn more about Dale and business valuation services.