Yes, I want to give back to the industry. Yes, I want to have my voice heard on the “big” issues. But probably the biggest reason is that through ASA, I have the opportunity to interact with other distributors, and I get to learn what sets highly successful business owners apart from everyone else.
I recently came across an interesting webinar that caused me to think about the mindset of running your business as if you were preparing to sell it. That’s probably controversial to some readers! Some owners might initially take a defensive posture, “I’m not selling. Why would I think that way?”
Even if you are not in that position, consider the criteria an acquiring company might use to evaluate your business:
Market position and competitive advantage: Being unique and visionary in the industry, offering great value to customers and being driven by a long-term vision/plan.
Strong processes and favorable industry trends: Not being a one-trick pony is attractive to private equity firms. Having a diverse market landscape that offers various avenues for growth and expansion is important. Can they grow the company beyond where it currently is?
Stable, recurring cash flows and a handle on costs: Having access to capital for expansion. Expanding a company needs significant investment, and a good, steady cash flow enables that long-term growth — especially needed in improving processes and technology.
Well-educated teams strategically focused on a well-defined mission: A well-versed management team engrained with a visionary strategic plan with a long history of identifying opportunities, mitigating risk and being nimble to respond to challenges is highly valuable.
If you are well positioned and can check all of these boxes, congratulations. You have a very strong and profitable company capable of either successfully competing well into the future or should you wish, sell your firm at a top price.
If you’re not, there are tools ASA has available to support its members. There are business intelligence tools offered to measure an organization’s strengths and weaknesses. Whether utilizing our annual Operating Performance Report or our Business Valuation Service, ASA has the resources to help members remain relevant and profitable, which is why I believe that ASA members tend to be the dominant market leaders in our industry.
According to Tom Noon, president of Industry Insights, ASA’s long-time business intelligence partner, “What you don’t know about your business has a much, or more, significant impact on your company’s success than what you do know.”
Andy Forrest, accounting manager at ASA-member distributor Robertson Heating Supply, says ASA’s business intelligence reports help the Alliance, Ohio-based company in a variety of ways.
“We use the ASA Operating Performance Report every year to benchmark our company against both our past performance and other similar companies in our industry,” he says. “Scott Robertson, our president, primarily looks at the company performance report. I highlight key areas, and this helps him pinpoint areas where we have room for improvement. We have corporate goals each year and the report can help identify what some of those goals should be.
“It’s also encouraging to see the areas in which our company is excelling. We find it extremely helpful to see measurements against other comparable companies instead of just seeing our own numbers all the time. It gives us a good point of reference.”
Fortunately, the ASA Operating Performance Report provides an invaluable tool for assessing strengths, weaknesses and improvement opportunities by providing key performance benchmarks against which to compare your own company’s results. Such information is available nowhere else. Measuring is the first step to improving.
ASA’s new Vitality Growth Readiness Assessment is yet another program from the association to help members assess their position in the market and their readiness to compete. The confidential survey engages a member in critically thinking how their firm strategically looks at the future and how the firm is positioned to successfully compete. This is something every company should be looking at on an annual basis.
So forget the notion of whether or not you are ready to sell. The more important question is whether it’s the right time to assess whether you are ready to win the future.
Streamlined operations, tight control of costs, highly refined processes, well-educated teams and a strong strategic vision of where they want to go as a company and what markets they want to compete in are all signs of upper-echelon business performance.
It never made sense to me that when a homeowner decides that they want to sell their home, they invest significant dollars to fix up their house just to sell. Fresh paint, new carpet or hardwood floors, updated kitchens and baths — upgraded curb appeal just to sell. Why not invest now and enjoy the home while you are still living in it?
The choice is yours. ASA is well positioned to help you.