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Thinc Strategy helps owners and leaders intentionally create the value they want for themselves, their team, and their business through every life cycle of the business. 

If you own a construction, architectural, or engineering firm and are thinking about an ownership transition, you might be considering selling internally. While internal sales can work, you may find that your firm’s younger professionals are reluctant to buy a portion of your company or become a partner. As you consider an ownership transition, it’s critical you understand current transition trends and why the young professionals in your firm might have reservations about taking on a larger role. By knowing the main reservations young professionals might have, you can better dispel their objections and help them make a more fully informed decision about taking part in an ownership transition or accepting a partnership role.

The Top 5 Reasons Young Professionals Are Resistant to Becoming Partners or Purchasing a Business

First, to be clear, an ownership or partnership role may not be right for everyone. While taking a larger role in a firm is often a great opportunity for many young professionals, some will be content fulfilling their life’s purpose and following their passion without being an owner or partner. As a result, you should expect some key staff members to not want to become partners or owners, which is okay. That being said, you should make sure these young professionals are not cutting short their potential with career decisions based on misunderstandings or misconceptions about ownership. Before you offer an ownership or partnership role to a young professional, take a moment to review the primary objections they might have and learn how you can better explain the benefits of taking an ownership stake:

1. The Financial Cost Is Too Inhibiting

When you offer an ownership stake to a young professional, it can seem financially overwhelming to them. While taking an ownership role is a significant financial commitment, you can explain to them that it is typically done over an extended period with a developed plan to make it feasible. Since the financial commitment can be frightening, it’s important you also give them a finance plan that breaks down the transition and shows how it will actually be financially manageable over time. Besides showcasing how much more manageable the financial aspect of an ownership transition can be, you can also highlight how taking an ownership role can give them greater autonomy in their career and financially reward them. As you explain the benefits, make sure your firm has a third-party consultant to guide them through the process and help them explore what an ownership role would look like financially.

2. The Reward Does Not Offset The Risk

Another common reservation young professionals have is that the rewards of a partnership or ownership role don’t outweigh the financial risk they’ll be taking. It’s important to acknowledge that this concern is valid but also reinforce the point that without any risk, they’ll likely not receive many rewards. If young professionals stay in their current roles, their level of reward will likely be limited. Due to this limited prospect of a high reward, you’ll likely want to highlight that most professionals heighten and further monetize the level of their rewards with continued career development that includes ownership. While an ownership position will take more time and dedication, they’ll be setting themselves up for higher financial awards. Additionally, you might want to share how owning the company has given you a great sense of personal achievement, as the promise of this non-monetary reward can be incredibly attractive to some young professionals.

3. Ownership Will Interfere With My Work-Life Balance and Independence

Balancing life, family, and work is difficult in any profession, and young professionals will likely fear that an ownership role will make it even harder to handle. Though an ownership or partnership role can lead to work-life balance challenges, you’ll likely want to highlight that they’ll be positioned to better control this balance as a partner or owner. Since leadership roles often provide greater autonomy over one’s schedule, you can reassure them that advancement in their career will not interfere with their control over their life. Instead, it can facilitate more control and balance. You can also highlight that leadership positions can enhance independence, as they’ll be in a position to make decisions that affect them, their colleagues, and their family. Alongside playing more of a role in decision-making, they’ll be able to delegate certain responsibilities. This ability to delegate often gives owners a greater sense of independence. Plus, they’ll likely receive more financial rewards in the long run, giving them more independence once they retire.

4. Partnership and Ownership Are Not Transparent

Some young professionals may be hesitant to become an owner if they don’t feel like ownership is being transparent about what’s required or involved to become a partner or owner. Within your practice, you may not have shared these details with members of your team due to expected confidentiality. You may have also avoided talking about ownership responsibilities to not bog them down with concerns about the firm’s operations and ownership when you needed them focused on more pressing responsibilities. After all, younger professionals are often more focused on developing their design, engineering, or construction skills than on ownership concerns that don’t yet involve them. If an employee feels there’s not enough current transparency for them to make a decision, remind them that as they take on more leadership-centered roles, they’ll receive greater transparency. As they start training to become a partner or owner, many operational and financial aspects that do not seem so transparent will be more openly shared.

5. They’re Not Ready for Ownership-Level Responsibilities

Sometimes, young professionals worry that they’re not ready to become owners or partners in a business. If they don’t know the timeline of the transition, they may think that they’ll have to get ready in a short period and won’t have the time to fully prepare without losing all of their free hours. One way to address this worry is to let them know that ownership transitions often take years, meaning that time is on their side. Instead of having to scramble to prepare, they’ll have the time they need to grow their leadership abilities during the planning and financial arrangement stages of the transition. With a well-thought-out ownership transition succession plan, you can also give them a defined training period, so they can feel fully confident they’ll be trained appropriately prior to taking over ownership of the business.

Choose Thinc Strategy for Ownership Transition Planning Services

At Thinc Strategy, we’re proud to provide business ownership transition services to a variety of construction, engineering, and architectural firms. When you turn to us for external or internal ownership transition succession planning, our certified merger and acquisition advisors can help. Alongside assisting with planning, we can also guide you through every step of the transition process. When you’re set on an internal transition, you might also be interested in our leadership coaching services to ensure your internal buyers are fully prepared to take charge. Learn more about our ownership transition services today. If you have any questions or want to schedule a free consultation, please contact us.
Full Charge Bookkeeper Full Time – Remote (Wilmington NC) Reports to:  Chief Operations Officer Clients trust Thinc’s insight and objective perspective when developing a strategy. We deliver trusted, insightful, and analytically driven consulting designed with our client’s specific business in mind.  Thinc is a growing company with clients all over the United States. We are in need of a Full Charge Bookkeeper to provide support for our team in Wilmington, NC. We are seeking an experienced bookkeeper who is a highly organized, detail-oriented, self-motivated professional, capable of managing their workload and prioritizing tasks in a fast-paced corporate environment.  The Bookkeeper will: Provide daily accounting services to include:
  • accounts payable
    • accounts receivable
    • general ledger reconciliation
    • month, quarter, and year-end financial reporting
    • budgeting support
    • administrative accounting
This individual will also provide payroll support as needed for our clients. This is an excellent opportunity to join a growing company with competitive compensation and benefits. Skills required 5+ years of experience in bookkeeping Proficient in Excel Proficient in QuickBooks Highly organized Excellent written and verbal skills Self-motivated Collaborative
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If you’re thinking of selling your business, you may be tempted to sell the business internally. While internal business ownership transitions can sometimes be successful, they often fail based on today’s environment and challenges. As you consider a transition, take a moment to learn more about the various ownership transition options and current trends that might influence your choice. 

Why Do Sellers Often Prefer to Sell Internally? 

Many sellers prefer to sell internally for several reasons. For example, they may have heard horror stories from friends about the difficulties of an external ownership transition or believe that an internal sale will help their brand live on to the next generation. 

Others may simply want to avoid the process of an external sale, as the process can be complicated if they don’t have professional help. Some potential sellers may also believe they haven’t prepared enough for an external sale and won’t be able to complete it successfully in the amount of time they have allocated for transitioning out of the business.

Why Do Many Internal Sales Not Work?

Despite many business owners’ desire to sell their company to an internal buyer, the process comes with many unexpected challenges that cause the internal sale not to work. Some of the main challenges internal sales often face include:

  • Not enough funds to pay fair market value: One of the biggest problems internal sales often face is that internal key stakeholders may not have enough cash to pay fair market value for the company. As a result, the current business owner will have to take a pay cut if they still want to sell internally, which isn’t ideal for most sellers.
  • Age and interest of potential internal buyers: Another challenge of internally selling is that key stakeholders often don’t have an interest in owning the company. At times, this lack of interest can come from the ages of key stakeholders who are nearing retirement and don’t want to take on extra responsibilities. Since owning and operating a business comes with unique challenges and stressors, even your younger internal leadership team may feel content staying in their current roles rather than taking on ownership of the company. 
  • Too fast of a transition timeline: When a current owner is looking to sell, they’re often looking towards transitioning their business within the next three to five years. This short-time frame gives little runway for the next-level leaders to step into an ownership role from a financial perspective, a personal timeline perspective (how long until they are thinking about retirement?), and a professional growth perspective. As a result, many internal transitions end up taking longer than five years, making it so current owners have to spend more time owning their businesses and training their internal staff to take over.

The Current Trends Affecting the Success of Internal Transitions

Besides the reasons above, many next-generation leaders have different priorities than the previous generation. These different priorities can make your younger internal leaders resistant to the opportunity of owning your business. Some of the top trends that cause young leaders not to want to own a business include:

  • More of an emphasis on work/life balance today
  • Families having children later in life
  • People are purchasing homes later in life
  • More of an emphasis on remote work today
  • More of a culture of “job hopping” to the next great thing
  • A nomadic culture with workforces is becoming more common

What Are The Best Current Transition Options for Sellers?

Since internal sales can be challenging for business owners, they may want to look for another option. Employee Stock Ownership Plans (ESOPs) and external sales are two of the best options for a faster, more lucrative ownership transition for a business owner. If you’re interested in exploring other transition models, learn more about both options below:

Employee Stock Ownership Plans

An ESOP is an employee benefit plan that gives workers ownership interest in the company in the form of shares of stock. ESOPs give the sponsoring company—the selling shareholder—and participants various tax benefits, making them qualified plans. These plans are also often used by employers as a corporate finance strategy to align the interests of their employees with those of their shareholders. Essentially, these plans allow business owners to make an internal sale without anyone in the firm writing a check.  

Some of the top features of an ESOP include: 

  • Significant tax benefits to the seller and the firm
  • Allows employees to buy out the owner with funds they wouldn’t have otherwise
  • Heavily regulated 
  • Takes significant planning and a specialized team to execute

External Sales

If an ESOP isn’t the right option for your business, you may want to consider making an external sale. Unlike internal sales and ESOPs, which can be more complex, external sales are often the easiest and simplest way for an owner to exit a business. They also usually allow business owners to receive a fair market value for their firm, ensuring all their years growing their business are compensated fairly. During external sales, key employees are usually typically required to stay for a period of time, with this requirement assisting with stability.

A successful external sale will need detailed ownership transition planning to ensure the buying firm is a good cultural fit. As you look for buyers, you’ll want to have a clear understanding of what your company culture and values are. By identifying your values and culture, you’re more likely to find a transactional partner that aligns with your organization.

Choose Thinc Strategy for Business Ownership Transition Services

At Thinc Strategy, we’re proud to offer mergers and acquisition advisory services to our clients. Whether you want to make an internal or external sale, our merger and acquisition advisors can walk you through your options. We also can assist with creating and implementing ESOPs, ensuring we can personalize our services to whatever ownership transition you’d like to begin. With our ownership planning services in your corner, you can know you’ll receive in-depth insights, customized service, and maximum value for your business and goals.

Learn more about our transition services today. If you have any questions or want to schedule a free consultation, please contact us

Kristen Beckmeyer Joins Advisory/M&A Firm as COO

Thinc Strategy announced the hiring of Kristen Beckmeyer as the new Chief Operations Officer. Beckmeyer joins Thinc with an extensive history of prioritizing company goals in all areas of operations. “It is an exciting time to join such a talented group of people, working to grow, perform and achieve elevated success for our clients”, says Beckmeyer.  “I’m looking forward to helping Thinc scale in a way that allows us to serve more clients while maintaining the company’s mission of providing a customized approach for every client.” Kristen has a long track record for helping companies prioritize operations for maximum efficiency while aligning with the organization’s goals. Most recently, she worked with a Florida law firm to setup their new client management software and the accompanying systems and processes.  She is a 2012 graduate of Leadership Wilmington and was voted “Outstanding Class Member” by her peers.  In July 2013, Kristen began her one-year term as Chairperson of the UNCW Cameron School of Business Alumni Chapter, after serving on the steering committee for the previous three years.  She is a former member of the UNCW Entrepreneurship Advisory Board, the Cameron Executive Advisory Board and the UNCW Alumni Association Board.  Kristen sat on the New Hanover Regional Medical Center Foundation Board from 2014 – 2019. “We are pleased to welcome Kristen to the Thinc team.  Kristen’s focus as COO will be to cultivate and implement processes that will complement the tremendous growth Thinc has seen over the past several years while enabling us to continue offering the customized client experience that we pride ourselves in.” –  Kathy Graham, Director of Culture and Training Thinc Strategy helps mid-market clients grow, perform and transition with advisory and M&A services. Clients in professional services and technology turn to Thinc for strategic planning, buyer and seller representation, feasibility studies, due diligence, and business consulting. Thinc Strategy helps clients intentionally create the success they want for their business and their team, success that is defined on their terms. www.thincstrategy.com

When the topic of ownership transition comes up, one of the most common responses from an owner is, “I really need to do something about that!” All too often, they say this with a tone of urgency, knowing it has already been put off for too long. Even if they know they’ve put it off too long, they may continue to delay ownership transition planning due to uncertainty. If you’re considering a business ownership transition, take a moment to learn more about why business owners often delay ownership transitions, what you’ll need to do to have a successful transition, and how you can ensure a change in business ownership goes as smoothly as possible. 

Why Do Business Owners Often Delay Ownership Transitions?

During the life of your business, ownership transition planning can be one of the most complex and confusing aspects. Due to its complexity, it’s easy to procrastinate on planning the transition. While procrastinating can be appealing, it can lead to disorganized transitions that don’t provide enough financial value to the current owner.

When an owner finally decides they might be ready to plan a transition, a frequent comment they make is, “I should have done something about that years ago!” This statement makes a veiled admission that they believe it may be too late to perform the transition in an orderly manner. It also gives the impression that the owner believes the financial value of transition won’t provide them with the compensation they deserve for a lifetime of creating and growing a business.

Often this tendency to wait is due to not knowing where to start. For example, an owner may put off a transition due to them not knowing how to go about ownership transition planning and complete any of the required transactions. As a result, any owner thinking about a business ownership transition should know some basic facts about the transition process and have expert strategic business planning consultants in their corner. 

What to Focus on During an Ownership Transition

Ownership transitions, whether internal or external, take years to plan, implement, and execute. The “rule of thumb” timeframe to complete this process can be up to 10 years or more, especially for internal transitions. Part of the reason for this long duration is that ownership transitions are also about leadership transitions within your business. 

Due to the importance of the leadership transition process, it’s essential you take time to identify potential leaders. Once you’ve selected key team members who you believe will lead your company to further success, you’ll want to allow them to grow into those vital roles of leadership.

Since transitions can take time, identifying future leaders and implementing leadership training at the beginning of the process will give your potential leaders enough time to gain key experience, as the transactional steps of the transition process usually require a considerable amount of time to complete.

In addition to leadership development and training, you’ll want to prioritize building the value of your business during the years leading up to the completion of the transaction. By focusing on increasing your business’s value, you and the receiving party will benefit.

For those on the receiving side, an increase in value will make them feel certain they’re acquiring a business of proven worth. Besides helping the buyer feel confident in their investment, focusing on increasing your business value can help you receive greater compensation in the sale and heighten your sense of accomplishment for your lifetime efforts of creating and growing your business.

Why Any Ownership Transitions Can Benefit From Strategic Business Development Consultants

As you aim to raise your business’s value and develop your future leadership team, it’s also important to know that ownership transitions require multiple transactions that are usually tedious and challenging. Since most business owners won’t know how to complete these transactions correctly or quickly, having an experienced professional working with you to negotiate all the complex terms and conditions fairly and satisfactorily is invaluable. 

How Thinc Strategy Can Help You During the Ownership Transition Process

At Thinc Strategy, we have the experience and understanding to assist with leadership team development, business valuations, negotiations, and transactions. Since we know trying to handle an ownership transition on your own can be overwhelming, we strive to make it easy for all our clients. 

Once you contact us to discuss an ownership transition and begin the process, our experienced business development consultants will sensitively guide you through every step. Even better, we will customize the entire transition process based on your firm or business’s culture, size, and organizational structure. Due to our personalized approach, you can trust that we’ll put you on a course of action that will maximize the value of your lifelong work and prepare future leaders for success.Learn more about our ownership transition planning services today. If you have any questions or want to schedule a free consultation, please contact us.

Recently, the American Council of Engineering Companies (ACEC) of North Carolina hosted a member reception with the NC congressional delegation at the ACEC townhouse. This delegation included NC representatives like Dan Bishop, Patrick McHenry, Richard Hudson, Deborah Ross, Kathy Manning, Virginia Foxx, and Senator Tom Tillis. Due to the importance of staying on top of the most pressing trends in the engineering industry, Thinc Strategy also attended the reception. Here are the top three priorities the ACEC highlighted as crucial for the engineering industry’s success going forward.

1. Successfully Implementing the Bipartisan Infrastructure Law

The recent enactment of the bipartisan Infrastructure Investment and Jobs Act (IIJA) gives engineering, construction, and architectural firms the opportunity to play a major role in upgrading our nation’s infrastructure. To ensure the bipartisan infrastructure law is successfully implemented and engineering firms thrive, the conference highlighted the following priorities:
  • Strengthening domestic manufacturing and supporting flexible procurement policies: Currently, the engineering industry is united in supporting the growth of the domestic manufacturing base. However, the conference also underscored the need for flexible procurement policies for materials or technologies necessary for infrastructure projects that aren’t available in the U.S.
  • Tackling inflation and workforce issues: Due to the current shortage of engineers, the conference made it clear that engineering companies should consider increasing benefits and salaries to attract more talent. Besides attracting new talent, they also stated these incentives should be offered to currently employed engineers who are vital to completing infrastructure projects funded through the IIJA. The ACEC also promoted fixed-fee contracts to give firms flexibility and the Federal Acquisition Regulation (FAR) based regulations designed to ensure salaries reflect current economic conditions.
  • Meeting infrastructure and environmental goals: The ACEC is strongly supportive of the One Federal Decision provisions in the IIJA, as they reform the NEPA process to coordinate between agencies. They also support this reformation by advancing public interest protections that deal with environmental and social equity justice concerns, as well as promoting environmental performance.
  • Funding supporting revenues and commitments: Due to the IIJA providing long-term funding to state and local agencies, the ACEC noted that these agencies now have the stability they need to plan and deliver on complex infrastructure projects. The ACEC also stated that they strongly oppose reducing or suspending motor fuel taxes and fees, as they could undermine long-term financial assistance for infrastructure programs and don’t sufficiently lower consumer prices.
As the industry attempts to address these priorities, the ACEC advocated the following actions:
  • Facilitate more efficient regulatory reviews and reduce obstacles by protecting the new law’s project delivery reforms.
  • Reject user fee reductions and keep strong funding commitments in the law.
  • Follow reasonable Buy America policies with accommodations for accessing vital materials.
  • Comply with federal procurement rules to promote value-based contracting adoption and ensure contract rates and terms represent actual costs.

2. Prioritizing the Growth of the Engineering Workforce

Recent Bureau of Labor Statistics data shows that engineering and architecture occupations are projected to grow six percent between 2020 and 2030, with this rise meeting demand. However, the ACEC’s analysis of the IIJA found that the new program will require an additional 82,000 engineers and other professionals to complete the IIJA’s newly funded programs. Due to the rising demand for engineers and the aging workforce of the engineering industry, prioritizing the growth of the engineering workforce is crucial. Some ways the ACEC suggests the industry and lawmakers grow the engineering workforce include:
  • Recapturing unused employment-based green cards:  Approximately 140,000 employment-based green cards are available each fiscal year, as well as other green cards for countries with low U.S. immigration and families. Despite this number of green cards, the ACEC highlighted the fact that many have gone unused over the past 20 years due to processing issues. The ACEC conference championed legislation like H.R. 7374, as it addresses the engineering industry’s workforce needs by focusing on people who are still waiting for work authorization.
  • Greater investments in STEM Education: Another way the ACEC hopes to increase the number of engineers in the workforce is to prioritize STEM education. The conference also discussed how various House and Senate-passed competitiveness legislation aims to better align workforce needs with undergraduate and graduate education demands.
  • Lifting the cap on H-1B visas: According to the American Society for Engineering Education, international students earned over half of U.S. universities’ engineering master’s and doctoral degrees in 2019. Due to the high amount of international talent, ACEC supports lifting the cap on H-1B visas available via a lottery system. For the fiscal year 2023, there were approximately 483,000 registrations but only 85,000 H-1B visas available, underscoring the need to make more visas available to drive international talent acquisition.
To make sure these priorities are addressed, the ACEC suggests the following actions be taken:
  • Increase the number of H-1B vias
  • Pass legislation designed to recapture any unused employment-based green cards
  • Enact stem provisions in America COMPETES Act/USICA by passing HR 4521/S 1260

3. Ensuring Fairness for Paycheck Protection Recipients

While the Paycheck Protection Program (PPP) was crucial to the survival of many small engineering firms during the pandemic, a regulatory change made months after these loans were received may force some businesses to give some of that assistance back. This threat to engineering firms centers around the “credits” clause under FAR 31.201-5, which has been applied to emergency PPP loans. The credit could mean engineering firms have to reduce billing rates or provide a refund to the federal government based on their forgiven PPP loans allocable to contract expenses. As a result of this clause, some engineering firms could even lose more money than the original amount of their PPP loan. The main points the ACEC highlighted in criticizing this regulatory change included:
  • The unfairness of the policy: Since other businesses conducting public agency or STATE DOT work aren’t impacted by these changes and can keep all their forgiven loans, the regulatory change unfairly punishes engineering firms. Besides the unfair impact on engineering firms, businesses weren’t told about this requirement when applying for PPP loans, with clarification on the FAR credits clause coming months after the program’s launch.
  • Its disproportionate impact on small firms: The ACEC believes this regulatory change will impact small firms and women and minority-owned firms the most. Since these firms tend to need this assistance more than others, it will make it harder for these firms to compete with larger firms.
  • The lack of future incentives for engineering firms: The FAR credits clause disincentivizes engineering companies from competing for public agency work. This disincentive will have ripple effects on the DOT efforts to expand contracting opportunities to WDBE and small businesses as the infrastructure investment law gets into full swing.
Due to all these points, the ACEC supports passing legislation that waives the FAR credits clause for forgiven PPP loans on transit and State DOT transit projects. By waiving this clause, the government can ensure fairness for PPP recipients.

Choose Thinc Strategy for Professional Business Services

If you’re a construction, architecture, or engineering firm looking to stay on top of the issues highlighted by the ACEC NC reception, turn to Thinc Strategy. Our strategic business planning consultants can help you evaluate the current market and public-policy trends before gearing your strategy to manage change for better performance. Our performance services include feasibility studies, financial assessments, organizational performance reviews, and leadership training, ensuring you can rise to meet any challenge. Learn more about our performance services today. If you have any questions or want to schedule a free consultation, please contact us. We’d also like to thank the ACEC of NC for providing us with information and guidance on their main priorities for the engineering sector.
Many important issues of today’s design industry were explored during The Aspire Experience recently held in Asheville September 11-13, 2022. This unconventional design conference, for which Thinc Strategy was a partner, gave participants tremendous insight into the main issues and challenges facing all design professions and society in general. These unique challenges are wide-ranging and critical to the present moment, with the conference highlighting issues such as sustainability, work-life balance, diversity, and community engagement. Due to the importance of these issues, a design business operating in professions like architecture, engineering, and landscape architecture needs to acknowledge them and devote preparation time to properly address them. The design professionals and leaders within these fields can implement specific business strategic planning to effectively and efficiently address many of these issues. As you prepare your design firm to meet today’s most important and trending issues, learn more about the top focus points and challenges highlighted during Aspire.

1. Sustainability and Resilience

With the adopted AIA Climate Action Plan, addressing sustainability and resilience in design is imperative for design professionals. While climate-conscious design isn’t new, the need for design firms to achieve net zero emissions with their work is crucial. The conference highlighted the importance of using more sustainable design solutions and being more proactive with clients to achieve net-zero goals. The conference also noted that design practices must be tactical to achieve this mission, making strategic planning of any design firm integral to its success.

2. Equity, Diversity, and Inclusion

In recent years, the goal of addressing systematic issues within society is more recognized and accepted. To achieve equity, diversity, and inclusion goals, companies must place greater attention and take more action at all levels, including their recruitment, hiring, design, and construction practices, as well as their sensitivity to the places within their plans and designs. As a design business works toward addressing systemic injustices, it can benefit from strategic prioritization that aims to properly and fairly address past deficiencies.

3. The Future of the Professions

All design professions are experiencing a revolution in how their work is produced, with recent pandemics accelerating how people work and what technology they use. While great technological advancement has already occurred in the design industry, technology and the advent of Artificial Intelligence crafted to assist design professions will bring about unprecedented change in design practices in the future. Constantly evolving tech and new breakthroughs will require new business strategies to prepare, integrate, and work within the new advancing work parameters.

4. Emerging Leadership

Most design firms are now coping with finding and retaining top talent, as more young architects, engineers, landscape architects and other design professionals are needed to keep up with demand. The successful development of these young professionals is more important than ever to meet the design needs of these professions. Since attention to these needs must be intentional, companies can benefit from strategic planning focused on recruiting, retaining, and professionally developing young talent expected to eventually attain leadership positions.

5. Work and Life Balance

As you attempt to retain and develop emerging leadership, sometimes referred to as Emerging Professionals, it’s important to understand that many young professionals have differing priorities. Alongside their focus on professional development and achievements, they often value a job that feels meaningful and allows for a balance of work, family, and quality of life. Creative changes are taking place in these professions to meet the desires and demands of these young professionals. Firms need to be open to the strategic responsiveness to these cultural business practices.

6. Designing for Health

Past and anticipated pandemics, as well as their impact on mental health, have heightened concerns for addressing health concerns within society. An aging population further intensifies the necessity for good design for promoting wellness and addressing these needs. As design firms rise to meet the challenges of pandemics and an aging population, they’ll need to pay greater attention to how their designs can create or enhance healthy environments and aid healthcare delivery. Specific strategic decisions and plans can ensure that a design firm prioritizes health throughout the design process.

7. Community and Public Engagement

As more people engage with their communities, design companies can see heightened benefits from engaging with the public and clients. Also, there is a greater sensitivity to equitably serving communities that are less served. Many design firms are systematically and intentionally addressing these issues with intentional strategic planning.

8. Future Building Types

The conference also highlighted the trend of increased needs for specific building types, including education, affordable housing, healthcare, and senior care. All design professionals need to prepare to be relevant for the future needs of society. This requirement may require re-focusing the resources of a firm to develop the expertise needed to effectively address these design needs. Strategic planning is necessary to establish and update these priorities and adopt tactics to meet those challenges.

The Importance of Strategic Planning

These wide-ranging topics all have one thing in common. Within the design professions, addressing current and future challenges begins with strategic planning. So, how does strategic planning for your design businesses relate to these and other future trends? Strategic planning is all about forward thinking and future planning for your business. What are your goals for the future, and how do you plan to accomplish them? All these trending issues and challenges are among many that will likely impact you and how your design business operates in the future. Any of the challenges described previously and at the conference could positively or negatively impact your firm in the coming years. As a result, it’s essential to take time to consider your business’s future and be very strategic about how to accomplish your goals.

Choose Thinc Strategy for Strategic Planning Assistance

At Thinc Strategy, our strategic business planning consultants can help you prepare for the future and achieve your goals. As experienced and knowledgeable professionals, we will provide confidential, sensitive, and necessary guidance through the creation of a living strategic plan to take your design practice to where you aspire to be in the future. Our strategic planning for design businesses services ensures your business growth strategies meet the new challenges and issues facing the design industry head-on. Learn more about our strategic planning and growth services today. If you have any questions or want to schedule a free consultation, please contact us.

When it comes to ownership transitions, there is so much planning and so many transactions that go into them that people often don’t consider one of the most important underlying factors—the wide-ranging positive and negative emotions wrapped in the entire ownership transition process. An ownership transition can be a roller coaster of emotions that can be joyfully exhilarating, infused with unexpected disappointment, and even charged with anger before it’s complete. 

The difficulties of all these emotions can potentially derail the process of transition, particularly in the final stages with final negotiations and executing transactional documents. The best prevention of this risk is knowing the warning signs of those emotions and not allowing them to overcome the process. When you know how to manage the five main types of emotions that come with an ownership transition, you can ensure they don’t threaten the planning and work required for a successful ownership transition.

How to Manage the 5 Types of Emotions of an Ownership Transition

So, here is the key, to borrow a phrase now a bit cliche: “Stay calm and carry on.”

During an ownership transition, maintain your professional composure, and don’t allow the array of emotions to overtake you and the process. The main types of emotions you’ll want to be watchful of include: confusion and bewilderment, anxiety and fear, anger and animosity, loss and grief, as well as happiness and joy. If you want to better manage these emotions for a successful business ownership transition, learn more about how each of these emotions may apply and surface below:

1. Confusion and Bewilderment

At the beginning of the process, confusion and bewilderment are to be expected. There are so many questions with multiple decisions to come that it’s easy to lose your way and abandon your goals before the process even begins. The best way to overcome these emotions is by taking the time in the beginning to obtain relevant information and receive good answers to your questions. 

Instead of planning your ownership transition strategy on your own and feeling overwhelmed, it’s a good idea to bring in strategic business planning consultants to demystify the process and keep you on track. At Thinc Strategy, our consultants regularly assist clients with ownership transition planning. Due to their wide-ranging experience and depth of knowledge, our strategists know the ins and outs of an ownership transition. Our team can walk you through the due diligence requirements and collaborate with you to draw out the right answers that uniquely apply to you and your business. 

2. Anxiety and Fear

Anxiety and fear can and will surface at any time during the transition process. Nothing is absolute and final until the end, when all transactional documents are signed. Thus, there may be underlying constant anxiety throughout and fear that something will unexpectedly derail the entire process. You might also experience disagreements or difficult negotiations that heighten your anxiety and fear. Thinc Strategy’s guidance and experience handling the process will help to keep these emotions in check.

3. Anger and Animosity

It is important to realize that the steps of the transition include intense negotiations and compromise. With such intensity and numerous details to work out, some situations may cause disagreement, anger, and animosity among those involved. Surprisingly, the least anticipated detail of a negotiation can sometimes be an emotional time bomb waiting to explode. Due to the sensitive nature of selling a company, anger might run high. Having Thinc Strategy to guide the process and manage potentially controversial topics is critical to successfully completing the process without remnants of animosity.

4. Loss and Grief

As much as one may look forward to the day of selling, merging, or retiring, there will be a sense of loss and consequent grief. The business is your baby, something you created and nurtured to maturity. Thus, even with a successful transition, it may be difficult to give up regardless of how fair the sale or merger might be.

Since grief may sneak up on you, it’s a good idea to cope with this sense of loss through preparatory anticipation and post-transition coaching and counseling. With post-transition coaching, you may want to identify what is next for you or find ways to celebrate the completion of the process. 

5. Happiness and Joy

Happiness and joy are the ultimate rewards of a successful transition. These emotions are often experienced at the beginning and again at the end of the transition process. At the beginning of the process, the directional decision to transition often brings about a sense of happiness, as the difficult decision of what to do and how to do it is behind you. 

However, happiness is often short-lived at the beginning of the process, as the other emotions surface and you begin working through the entire tedious transition process. Fortunately, happiness can turn to joy once the transition is finally successfully completed. With a successful ownership transition, you’ll leave a legacy for all that you’ve built, leading to feelings of joy.

Choose Thinc Strategy for Ownership Transition Planning

The only way to effectively manage these emotions and use them to your advantage is to be aware of them and how they may affect your decision-making. With the expertise of Thinc Strategy, you will have the valuable counsel needed to manage expectations and, therefore, emotions. Our transition advisors can provide feasibility studies, valuations, leadership transition services, and employee stock ownership plans to ensure the transition process is focused, meets your goals, and is as stress-free as possible. Learn more about Thinc Strategy’s ownership transition services. If you have any questions or want to find out how Thinc Strategy will help manage ownership transition emotions, please contact us to schedule a free consultation.

Onboarding employees in a remote work environment can have challenges, especially if you don’t have a plan to ensure the remote employee has the equipment and guidance needed for success. However, with a well-organized remote employee onboarding checklist, you can avoid these challenges and successfully onboard, integrate, and retain new remote employees. Learn more about the top seven tips for building a remote employee onboarding checklist.

1. Start Early 

When you’re in the process of remote employee onboarding, it’s best practice to get started on any paperwork or plans early. Besides saving you the stress of leaving everything to the last minute on day one of onboarding, starting early can help the employee feel welcomed and valued as soon as they begin their new position with you. 

A disorganized hiring process can make new employees feel like they aren’t important to the company and will only leave them feeling more overwhelmed at the new position. In contrast, if you give the new employee a well-outlined plan, have any necessary equipment delivered to them in advance, and provide them with someone who can guide them through their first days, they’ll likely feel more at ease and like they’re doing something valuable from the moment they start work.

2. Have a Well Outlined Plan

During your new-hire prep, take a moment to create a custom plan to onboard remote employees for your company. In this plan, include information that illustrates the culture and expectations you want to define your organization. You might also include a timetable for their onboarding and training process, as well as any other information you think is relevant to them.

3. Prepare Remote Employees for Success

With your plan created, it’s time to set up your new remote employee for success. Unlike in-person work at an office, new employees often don’t have the equipment necessary to do their jobs. If that equipment doesn’t arrive before the new employee’s first day, you’ll likely lose out on productivity and slow the training process down. To prepare your new employee for early success, consider the tips below:

  • Order all necessary equipment ahead of time.
    • Set a company standard for the employee’s computer and preload it with the appropriate ID, software, and APPS. You can also have someone bookmark frequently used sites beforehand.
    • Send other accessories, such as a monitor, keyboard, and mouse, directly to the employee.
    • If possible, schedule an in-person first-day visit with an onboarding liaison to deliver the computer and go over best practices for use and general operations.
      • If an in-person visit is not an option, send the preloaded computer to arrive in advance of the first day and set aside day one for virtual discussion with the liaison and new team member.
      • Provide a welcome gift of company swag or something similar.
  • Schedule a one-on-one with a direct supervisor and/or other department members on day two.
  • Provide a copy of the employee handbook and team bios to help illustrate the culture and team environment.
  • Complete any onboarding paperwork required for payroll.

4. Assign a New Hire Buddy

Another way you can raise the chances of a smooth onboarding process is to assign a “new hire buddy” to your freshly hired employee. Essentially, a hiring buddy is someone currently at your company who can answer any questions the new hire might have and give them advice on how to excel at their role. This new-hire buddy can also give the new employee a mentor to turn to for additional help or advice. Some of our tips for assigning a new hire buddy include:

  • Create a consistent new hire buddy plan that can be used with all new hires.
  • If possible, select a new hire buddy with one to two years of experience within the company.
  • Schedule meetings that align with the plan up until a minimum of 90 days. After 90 days, the new hire should be acclimated enough to the company that they don’t need as many meetings with their buddy. However, you might still schedule intermittent check-in sessions if you believe it would be valuable for your new hire.

5. Set Calendar Invites to Meet the Staff

A great method to make a new hire feel included and immediately a part of the team is to have them meet various staff members virtually. While an in-person employee would naturally meet other people, a remote employee won’t have that luxury. Some tips for these virtual meetings include:

  • Schedule weekly virtual lunch or coffee meetings with other staff members until the new employee has met the entire team.
  • Generate a fun list of Q&A to use during this meeting time as a “get to know your coworker” experience.

6. Implement Role-Specific Training Calendar

While much of onboarding is getting a new employee familiar with your company as a whole, you’ll also want to prepare them for success in their specific role. A role-specific calendar will ensure the employee has all the information they need to succeed in their position. Some training sessions or teaching resources you might add to this calendar include:

  • Webinars
  • Written processes
  • Custom videos describing the services offered by the company

7. Plan for the Future

Alongside preparing for day one, it’s important to plan for the future. By planning for the future, you can ensure the employee doesn’t start to fall behind after a great start. To prepare for the future and ensure the employee has what they need to succeed, determine check-in goals and schedule follow-up meetings. Staying in touch with a new hire can also boost remote employee retention, as they’ll continue to feel valued, even by those they don’t normally interact with.

Choose Thinc Strategy for Professional Business Services 

At Thinc Strategy, we’re proud to provide our clients with professional business services that cover everything from developing a remote worker onboarding checklist to assisting with ownership transitions. When you turn to us for strategy assistance, our business development consultants will work with you to understand your company inside and out. Once we understand your needs, we can provide a number of performance-based services, including business assessments, financial reviews, leadership development training, and feasibility studies. 

Learn more about our performance services today. If you have any questions or want to schedule a consultation, please contact us.

If you’re an executive or manager looking to improve your personal efficiency, Thinc Strategy’’s Chief Technical Officer, Kelli Snider, has you covered. Over her time at Thinc, she’s learned a few tips and tricks that anyone can use to increase their overall performance and save time. Check out her top four efficiency tips:

1. Excel Formatting

Developing your fluency in Excel is critical for anyone working in the C-suite at a company. One of the best skills to learn is how to mirror the formatting of one column to another with the “paint” feature. To use the “paint” feature, follow these steps below:
  • Click the column header of the column that has the formatting you want to mirror
  • Click the paintbrush icon on your home tab
  • Click the column you want to apply the formatting to, and you’re done!
Besides using the paint feature to easily transfer formatting from one column to another, you can also format the sheets the end-users may want to print by going into “page set-up” and selecting the appropriate options.

2. Excel Saving Best Practices

If you want an end-user to see a certain sheet after they open an Excel workbook, start by placing your cursor on cell A1 (far top left cell). Next, hit the save button while you have the sheet you want the end-user to see pulled up on your screen. By saving your Excel workbook this way, the Excel book will open on the correct sheet. This saving method is a small way to improve the client experience (or internal experience) when sending excel files. Opening an excel workbook in the middle of the book and halfway down the sheet creates confusion and wastes time.

3. Time Tracking for Direct and Indirect Labor

Professional service firms (even Thinc) track labor costs under two buckets: direct labor and indirect labor. Direct labor is all your employees’ time entered for project hours, whereas indirect labor is time entered for non-project-related activities, such as marketing, administration, and PTO. Did you know direct labor for one company is considered indirect labor for another, depending on the client type? For example, in an accounting firm, time tracked for accounting is typically direct labor, whereas, in an engineering firm, time tracked for accounting would be indirect labor. When clients talk about direct labor, they are referring to the time team members spend on client or project-based work.

4. Confidentiality

With so many offices becoming remote or hybrid, it’s important to always remember that confidentiality should be a non-negotiable priority. If you work in open spaces or travel for work, be mindful of information being overheard or seen. These are some privacy tips to keep in mind:
  • When in a co-working space, never talk about a particular client in the open space. Instead, use a private office or conference room.
  • When traveling, be mindful of talking about work/clients with co-workers or taking calls where others can overhear. You should also be mindful of wandering eyes when traveling on a plane.
  • Plane travel is an excellent time to break out the laptop and get some work done, but be mindful of those around you being able to see client-specific information. Since you never know who might be sitting next to you, it’s best to play it safe.

Turn to Thinc Strategy for All Your Business Productivity  Needs

If you want to boost your entire team’s efficiency and performance, Thinc Strategy can help. Our business development consultants can evaluate your business and create a performance improvement strategy. With our team in your corner, you can receive business needs assessments, financial reviews, feasibility studies, and organizational performance recommendations. We also offer leadership team development services to help your C-suite and other key staff members hone their leadership skills. Learn more about our performance services today. If you have any questions or want to schedule a free consultation, please contact us.

Talk of mergers and acquisitions is everywhere, and we know it can be a daunting transition option for your company to consider. Although an external transition, sometimes called a third-party transition, is not right for everyone, it can offer several benefits when you’re ready to step away from your business. Learn more about how to decide if an external transition is a good option and the main benefits of this kind of transition. 

How to Decide If an External Transition Is the Right Decision

Internal transitions, where a business owner hands their business off to their next-generation leadership team, usually take longer and don’t provide as much financial value to the current owner. Due to these potential downsides, many business owners look to an external ownership transition instead.

When considering a third-party transition, it’s important to fully understand the capability and capacity of your firm to make the best decision for all involved. Some key considerations include your timetable for retirement, the capability of your next-generation leadership, the financial ability of your employees to buy your shares on a realistic timeline, and stagnant growth due to the inability to hire/retain employees.

Below are some questions you can ask to assess if an external merger or acquisition is the right path for your organization:

  • How long until you want to retire?
    • Does your next-generation leadership team have the skills necessary to successfully perform an internal transition?
  • Can your next-generation leadership team afford to buy your company?
  • What is your current ownership structure?
  • What is your ideal situation in exiting the business?
  • Do you have a clear path for growth?
  • What is the value you want to get out of your company?

Factors Contributing to the Viability of a Third Party Transition

As you consider a third-party transition, you’ll want to look for a few tell-tale factors that often indicate an external transition is right for your business. These factors include:

  • You’re looking to retire in the next three to five years
  • Problems recruiting/retaining employees
  • Reached maximum capacity/turning down work
    • In danger of burnout of leadership and employees
  • Current economy, economic forecast
  • Employees’ unwillingness or inability to purchase the business

Benefits of an External Sale 

Although there are horror stories about failed acquisitions, an external acquisition can offer owners and employees financial and quality of life success when planned and integrated correctly. A third-party transition can also alleviate many of the struggles that currently plague many businesses, such as reaching maximum workload capacity, inability to hire in a competitive job market, and lack of infrastructure to grow your business. Additionally, giving your employees the chance to join a larger firm can provide them with new opportunities and the chance to work on exciting projects.

Check out some more of the most common benefits of an external transition below:

  • Getting the true value of your business
  • Larger infrastructure
    • Recruitment tools
    • Improved employee benefits
    • HR and administrative support
  • Opportunities for employees’ professional development
  • Ability to go after larger projects 

How to Find the Right Partner

Not unlike the dating process, you’re going to meet some firms that aren’t right for your organization. In this process, knowing what you don’t want is as important as understanding what you do want. Start with an internal assessment of your business to understand your culture, values, and the type of organization that best fits you, your business, and your employees.

Review some of the top questions to ask when evaluating whether a potential buyer is the right partner for you and your team:

  • What firms do you admire? What firms are not a culture fit?
  • How long will you be willing to stay after the transition?
  • Would being part of a larger organization offer your employees opportunities they do not currently have? 
    • Are there opportunities for key employees in the new organization?
    • What support can this company provide to your employees?
    • Do they have organizational training programs?
  • How could being part of a larger entity benefit your business?
  • Do your services align?
  • Does the leadership style of the new organization match yours?

How Thinc Strategy Can Help You Through a Third Party Transition

Now that you have asked the important questions to confirm if an external transition is the best option for your business, let Thinc serve as your trusted merger and acquisition advisor through this emotional ownership transition. Thinc guides you through the acquisition process with the experience and knowledge of industry professionals.

You can trust us to help you understand your culture and acquisition goals, vet prospective buyers, and negotiate deal terms. We can also walk you through the due diligence and integration phases and continue as an advisor long after the transaction closes.

Learn more about our M&A services today! If you have any questions or want to schedule a free consultation, please contact us.

When you want your business to be as productive as possible, you need effective managers to guide the rest of your employees. Unfortunately, managers often get stuck in habits that lead to missed deadlines, poor communication, and lost time. However, by implementing a few good practices, any manager can become more effective and successful. Whether you’re a CEO trying to find ways to help your managers succeed or a manager who wants to grow this year, you should know the following five main habits of effective managers.

1. They Keep an Organized Filing and Tracking System

According to Cyril Peupion, people spend, on average, six weeks per year searching for information they already have. As a result, a manager who uses an effective filing system saves time and money. Besides keeping a manager on track and helping them avoid wasted time, an organized filing system assists with maintaining focused and productive team training sessions. Below are some tips for the most efficient filing system:
  • Keep it simple and logical. Create subfolders and sort in a way consistent with the logical workflow when working on multiple projects.
  • Avoid information overload by being selective and strict about the information you keep. Remember that:
    • 85% of documents that are kept will never be read again.
    • 15% of the worthwhile information really needed is hidden among the 85%.
  • Label your files with a consistent naming convention.

2. They Are Proactive

Another key habit highly effective managers have is that they’re proactive. Whenever a manager opens an email, touches a hard document, or thinks of an idea, they need to decide what to do with it. However, the need to decide doesn’t mean you have to complete the task right at that moment. Instead, you just need to decide what you will do and when. Being proactive is probably the most important principle regarding efficiency, as it separates the real doers and the procrastinators. As soon as you read an email or document, decide if it’s a task you can do now or reassign to someone else with a tracker of when you may need to follow up. If neither option works, schedule a time to come back to complete it.

3. They Prioritize AND Manage Their Time

If you’re a manager working on something important and one of your colleagues interrupts you, ask the person to explain what they want to talk about in 20 seconds. After they tell you, decide if what they want to focus on is worth stopping what you’re doing. If it’s not, you could, for example, set up a time with your colleague to take care of the task later.
  • Rather than interrupt colleagues, or being interrupted by them, batch communications by setting up regular check-ins. For example, if you have an employee named David, create a document titled “Topic to be discussed with David.” Whenever you think of something to mention or discuss with David, simply write it down in this document, as long as it can wait till the next check-in. Ask your colleague to do the same.
  • If you’re focused on a key activity for 2 hours, put the phone on silent and stop checking email. If you work in an open space environment, agree on a signal to let your colleagues know you don’t want to be interrupted (e.g., wear headphones, red flag on the computer, etc.). You can also book a room for yourself or, if it’s in the culture of your company, you can work one day per week from home.
  • We have hundreds of thoughts going through our minds on any given day. To avoid feeling overwhelmed and stressed, just capture any important thoughts by writing them down on your “Work to-do list” or “Home to-do.” If required, create a reminder. By doing that, your subconscious will feel you’re in control and will not distract you again with overwhelming thoughts.
  • Having a clean desk will have a huge impact on your concentration and productivity.
  • Here’s an example that happens to most of us: You are working on an important project when suddenly you see a post-it on your computer that says something like “email John.” You realize you are supposed to email John but had completely forgotten. You either write the email immediately and break your concentration on your important project, or you decide to do it later but have it in the back of your mind. Just as you get back to your important project, you notice another document on the “to-do” pile. Keeping your workspace clean and clear will help prevent these distractions.

4. They Conduct Effective Meetings

Meetings should be started on time and kept on track with an agenda. If required, ask if someone wants to facilitate the meeting and ensure everyone stays on track. Some top practices for effective meetings that managers should keep in mind include:
  • Important topics should be covered first before the secondary topics.
  • During your meetings, make sure you note all the actions you are supposed to take.
  • After your meetings, take five minutes to plan when you’ll take care of your actions. If you don’t have time to plan your listed actions, at least plan a “Debrief meeting” action later in the day.
  • Be proactive in suggesting changes for regular meetings such as weekly team meetings or monthly committees. Don’t hesitate to suggest ideas to make the meeting more effective (duration, frequency, agenda, etc.).

5. They Leverage Their Resources

Many people tend to jump into a task without taking a couple of minutes to step back and identify what could be leveraged. Some questions to make sure you’re fully leveraging all the resources available to you include:
  • Is there someone that could potentially help?
  • Am I robbing someone of an opportunity to learn if I do not delegate this task?
  • Is there a document already created? Templates are a manager’s best tool for quick, professional documents that do not require starting over.

Turn to Thinc Strategy for Business Development Consultations

Now that you know more about what it takes to be the most effective manager possible, it’s time to take your business to the next level with Thinc Strategy’s professional business services. Our team of business development consultants is ready to optimize your company’s performance, taking time to understand your business’s goals and current capabilities. Once we understand your needs, we can assist with feasibility studies, financial assessments, organizational performance, and leadership development. Learn more about our performance services today. If you have any questions or want to schedule a business development consultation, please contact us.

When your business is in the process of a transition, such as a leadership or ownership transition, you’ll likely be taking on risk. One of the best ways you can evaluate whether the potential benefits of a transition outweigh the risks is with a feasibility study. Before you begin a transition, make sure you know what a feasibility study is, why these studies are so important, and how you can perform one.

What Is a Feasibility Study?

A feasibility study is a detailed analysis that outlines the risk and return of pursuing a plan of action. In a transition, a feasibility study can allow you to determine how much risk a potential transition would entail. A transition feasibility study can also give you the information you need to better predict the likely success of a transition and the potential return on investment.

Why Do a Feasibility Study?

A business feasibility study is essential in evaluating whether or not a transition is likely to succeed. When you conduct a feasibility study for an ownership transition, leadership transition, generational transition, or any other business transition, you’ll need to ask yourself five main feasibility study questions. These questions include:

  1. What are the viable options? Each plan has multiple courses of action. What is the best option for the company and its key stakeholders? The study will sort through all the options and may even help you identify a hybrid approach.
  2. What resources are required? The study identifies the resources required of the firm and its shareholders. These resources typically include:
    1. Time
    2. Money
    3. Expertise
    4. Intellectual Property
    5. Technology
    6. Other
    7. Responsible stakeholders – Identify who has accountability and for what part of the plan
    8. Special considerations
  3. What is the expected shareholder return for each viable option? 
  4. What is the viability of success? 
  5. What are the risks?

Once you’ve asked yourself the above feasibility study questions and completed the study, you’ll be prepared to decide on the path forward. The decisions will be aligned because the study will give your entire team the data, analysis, and forecasts to help see all your options clearly. The study also allows you to plan for alternatives.

How to Conduct a Feasibility Study

Conducting a feasibility study involves rigor and brutal honesty about where your business is today. To conduct a comprehensive study:

  1. Gather information:  Various types of information should be gathered based on the purpose of the planned transition. This information gathering should include the collection of financial, operational, and market data. 
  2. Assess the business: During your business assessment, be brutally honest about your company. Some key areas you’ll want to focus on in your assessment include:
    1. Stock value 
    2. Brand
    3. Culture 
    4. Risks
    5. Strengths
    6. Weaknesses – define and then develop a plan to overcome
    7. Opportunities – define and develop a plan of action to take advantage of opportunities
    8. Threats – define who, what, why, and when. Define how to turn threats into opportunities.
    9. Are we (am I) willing to do what it takes to achieve the end goal?
  3. Align with key stakeholders: Once you’ve gathered and analyzed the information, the key stakeholders should meet to align on the next steps and final decisions. In this meeting, make sure everyone understands expectations and the role they play. A team that is aligned will eliminate unwanted surprises down the road and experience a smoother ownership transition process.

Choose Thinc Strategy for Advisory Services

If you’re looking for help conducting a feasibility study, Thinc Strategy’s certified advisors can help. Our team will work with you to create, implement and evaluate a feasibility study that helps you determine whether a transition meets your company’s overall goals and capabilities. Alongside assisting with feasibility studies, our transitional services include external transitions, internal transitions, employee stock ownership plans, and valuations. 

Find out more about our feasibility studies and ownership transition planning services today. If you have any questions or want to schedule a free consultation, please contact us.

As you proceed through the due diligence stage of an acquisition, you’ll want to ensure you’ve thoroughly evaluated the target company’s organization and talent. This talent and staff review is key to any human resources due diligence checklist for acquisitions, as it allows you to learn more about the employees at the target company and their expectations. Before you make any offers or promises to the target company’s employees, make sure you request critical talent documents first and correctly evaluate them.

What Organization and Talent Related Information Should the Acquirer Request?

Part of any HR due diligence checklist should include a thorough review of a target company’s documentation about their organization and talent. Some of the primary documents you should request to properly evaluate their talent include:
  • Full census of all employees
  • Copies of any bonus plans
  • Active employee performance improvement plans or disciplinary actions
  • Any exit interview information if available
  • Bios and resumes for key talent
  • Description of any human resource systems used
  • Employee benefit plan descriptions and cost
  • Copy of current employee handbook and/or safety policies
After you receive these documents, you can use the information to assess the overall organization and talent of the company. The documents can also help you identify any potential areas of concern you’ll need more information about and see where you might have talent overlap between your companies. If you do find talent overlap, knowing about it early can give you time to decide whether to integrate teams or pair them down when there’s unnecessary duplication.

What to Evaluate When Reviewing a Target Company’s Organization Related Information

When evaluating the above documents, there are some key focus areas acquirers typically inspect when evaluating the potential acquisition’s organization and talent. One of the most important documents to receive and evaluate is a full census of all employees, as it can help your team work on competitive offer letters and employment structures for the acquisition’s team. As part of your review of the existing census, a thorough analysis should be performed to see how the target company’s existing salaries, benefits, and other employee programs compare to your plans. In today’s market, this area of due diligence should not be taken lightly, as most acquisitions are occurring for talent acquisition more than anything else. If an acquirer does not fully understand the current offerings of the target company and their offers don’t at least meet or exceed the employees’ current pay, benefits, and opportunities, the employees might look to leave the company once the acquisition is announced. The irony of doing an acquisition primarily for the talent and then not taking the adequate time to understand the talent is all too familiar with unsuccessful acquisitions. Another key area of inspection within the organizational arena of a company is a thorough inspection of the company handbook. The handbook provides a wealth of knowledge regarding policies and procedures employees are used to and the expectations they might have for a company. The handbook will also often have documentation about any safety or health-related policies and legal compliance matters that you’ll need to understand through a transaction. Additionally, any type of employee surveys, exit interviews, or onboarding documents provided by the acquiree can offer great insight into the overall culture and management of a company. What acquirers hear during the conversations with leadership and what employees tend to tell can sometimes be very different stories. The ability to see “behind the curtain” with this type of information can be very eye-opening and critical for a successful transaction.

How to Benefit the Most From an Organizational and Talent Evaluation

As you work your way through various organizational documents and your HR due diligence checklist, you can ensure the process is efficient by clearly defining your areas of importance. With the most important aspects defined, you can more easily identify the most important talent and organization information you need from the target company to make your decision. By identifying the most important information, you’ll put yourself in the best position to keep the due diligence process on task and focused. If your evaluation reveals any areas of concern, you’ll want to quickly document and share the concerns with relevant team members or leadership. You may also want to request supplemental information to give your leadership the details they need to make a fully informed decision about whether to continue, stop, or change the acquisition. Throughout this entire process, you’ll want to quickly receive any primary or supplemental documents to ensure you have enough time to thoroughly review the information.

Choose Thinc Strategy for Organization and Talent Evaluation Assistance

When you need organization and talent evaluation assistance during an acquisition, turn to the certified merger and acquisition advisors at Thinc Strategy. No matter where you are in the expansion through acquisition process, our advisors have the expertise needed to ensure a potential acquisition meets your acquisition goals and stays on track. Our team can also help you create a comprehensive mergers and acquisitions HR due diligence checklist, ensuring you have all the information you need to make a well-informed decision. Learn more about our M&A advisory services today. If you have any questions or want to schedule a free acquisition consultation, please contact us.
During the due diligence stage of a business acquisition, the acquirer must analyze the acquisition target’s quantitative and qualitative data to decide if the transaction is likely to fail or succeed. One low-risk area of focus you should evaluate as an acquirer before completing due diligence is the target company’s marketing-related information. To ensure your expansion through acquisition strategy is as thorough as possible, learn more about the main marketing due diligence documents an acquirer should request and how to evaluate them.

What Marketing Documents Should the Acquirer Request?

When an acquirer reaches the point of due diligence and starts to evaluate a target company’s marketing information, the first thing to address on their marketing due diligence checklist should be to request a few documents. These marketing-related documents include:
  • Copies of printed and digital marketing materials
  • Copies of pending proposals
  • Revenue by customer and market segment
  • Prequalifications held
  • CRM database used
Once you receive these documents, you’ll be better equipped to properly analyze the company’s marketing efforts and identify any potential areas of concern. These documents also allow you to identify key areas where you might have a talent overlap with existing staff. Additionally, you can see how their marketing standards differ from yours and get them up to speed on the standards you’ll expect them to follow.

What to Evaluate When Reviewing a Target Company’s Marketing Information

As you evaluate the above documents, you’ll want to inspect the target’s current physical and digital marketing efforts as soon as possible. Doing so can help you begin planning for your future marketing efforts and needs once you combine your organizations. While marketing is a relatively low area of concern during due diligence, it is still an area that should be covered so the acquirer has a complete understanding of the marketing function at the acquisition target.

The Questions to Ask When Evaluating a Company’s Marketing Information

The due diligence inspection of marketing matters also gives you an opportunity to better understand the company’s various marketing processes through a “walkthrough” of their marketing processes. As the target company shows you how their marketing processes work, you should ask a few questions to see how their processes compare to yours and if they aid your acquisition goals. Some of the primary questions to ask include:
  • Who is responsible for marketing efforts?
  • How are proposals tracked?
  • How are marketing efforts tracked?
  • Is there a dedicated CRM system in use?
Typically, a staff member responsible for handling marketing efforts or a member of the target’s marketing team can conduct a walkthrough and answer these questions.

How to Benefit the Most From a Marketing Evaluation

If you want to get the most value out of your marketing evaluation, keep key areas of importance front and center to ensure the evaluation stays on task. However, when your evaluation reveals areas of concern or information that knocks you off track, it’s best practice to quickly document and share it. You may also want to request supplemental information about troubling information to ensure you can make a fully informed decision about whether you should stop, continue, or alter the M&A transaction.

Choose Thinc Strategy for Marketing Evaluation Assistance

Since due diligence can be a long process with lots of information to evaluate, turn to the experts at Thinc Strategy for merger and acquisition advisory services. Our certified merger and acquisition advisors can ensure your team has the expertise needed for a successful ownership transition. Whether you’re crafting your acquisition goals, conducting digital marketing due diligence, or at the sign and close stage, our team is here to serve your particular needs. Learn more about our transition and M&A advisory services today. If you have any questions or want to schedule a free consultation, please contact us.
During the due diligence stage of an acquisition, it is important for the acquirer to thoroughly analyze both the qualitative and quantitative data of the potential acquisition target. This evaluation can help reveal whether the transaction will succeed or fail, and one capital-intensive area to focus on is IT and fixed assets. The acquirer can use various methodologies to understand the target company’s IT and fixed assets, including inquiry, inspection of documents, and observation of equipment. If you’re interested in ensuring you have all the information you need before acquiring another company, take a moment to learn more about how to evaluate a target company’s IT and fixed assets.

IT and Fixed Asset Information Acquirers Should Request 

When an acquirer begins evaluating a company’s IT and fixed assets, there are a few pieces of information they’ll want to request from the acquisition target. These pieces of information include:
  • Inventory list of computer hardware
  • Current listing of fixed assets, including depreciable basis
  • IT structure
  • Leased or rented hardware items
  • Major IT initiatives recently completed or planned
  • IT-related agreements, such as IT consultants, service level agreements, etc.
  • Software listing and terms
With the requested information, an acquirer can assess the technological state of the company and identify areas of concern to further inquire about if necessary. This information also allows them to identify key areas that could be a heavy capital expenditure to acquire the target company.

How to Evaluate Key IT and Fixed Asset Information

When evaluating the above IT and fixed asset documents, there are some key areas of focus or concern acquirers typically inspect, such as the target company’s key systems, technologies, and current fixed assets. By identifying and evaluating these areas, the acquirer can more quickly understand the capital outlay required to bring the acquisition into the same systems they prefer. During the evaluation stage, the acquirer should also look for software contracts used by the acquisition company that the acquirer will not need. If the acquirer finds any software contracts, they’ll need to decide whether these contracts can be canceled early, bought out, or be a non-necessary recurring cost. If these contracts cannot be canceled, do they stay with the seller as their obligation? All of these considerations must be sorted out early on during due diligence.

The Questions to Ask When Evaluating a Target Company’s IT Processes 

During the due diligence inspection of IT matters, the acquirer will have an opportunity to gain an understanding of the company’s various IT processes through inquiry and a “walkthrough” of each process. Some questions to ask when evaluating a target company’s IT processes include:
  • Who is responsible for IT oversight?
  • How is cyber security handled?
  • Is there a dedicated help desk?
  • How are software renewals handled?
  • Is there a requisition process for new software or fixed assets?
All of these questions can be addressed and easily understood by a walkthrough with the IT team, staff member, or contractor who handles the IT of the acquisition company.

How to Make IT and Fixed Asset Evaluation As Useful as Possible

When performing due diligence over an acquisition target’s IT and fixed assets, you can keep the process focused by identifying key areas of importance that match your acquisition goals. As areas of concern are identified, quickly documenting, sharing, and in some cases, requesting supplemental information allows for the leadership of the acquirer to make informed decisions. For example, a target company can use its identified concerns to decide whether to continue the transaction, stop the transaction, or change the terms of the deal to accommodate the identified concerns. The key here is having accurate information timely!

Choose Thinc Strategy for IT and Fixed Asset Evaluation Assistance

If you’re engaged in a potential merger and looking for assistance with IT and fixed asset evaluation, Thinc Strategy’s certified merger and acquisition advisors can help. With our merger and acquisition advisory services in your corner, we can assist with every step of the acquisition process. Whether you need help evaluating a target company’s fixed assets or are just starting to create your acquisition goals, our team is ready to provide highly-personalized, expert service to you. Learn more about our advisory services for mergers and acquisitions today. If you have any questions or want to schedule a free consultation, please contact us.

During the due diligence stage of a business merger or acquisition, it is important to thoroughly analyze the qualitative and quantitative data of the potential acquisition target to help determine if the transaction will succeed or fail. One key area to delve into is information about the target acquisition’s finances, insurance, and taxes. Various methodologies can be used to understand these areas, including inquiry and inspection of documents.

Learn more about this stage of due diligence to ensure you’ve reviewed all necessary documents prior to moving forward with an acquisition.

Key Finance, Insurance, and Tax Documents to Request and Analyze During Due Diligence

Before you move past the due diligence stage of an acquisition, you’ll want to see if the company’s financial, insurance, and tax documents match your acquisition goals. Since these documents can help you assess the financial state of the company and identify areas of concern, they’re incredibly useful for better understanding the target company and identifying areas that need further inquiry. Review the primary documents you’ll want to request and analyze below:

  • Financial statements 
  • Breakdown of revenue by client 
  • Accounts Receivable and Accounts Payable Aging Reports
  • Bank Reconciliation(s)
  • Listing of top vendors 
  • Debt analysis and listing of credit lines, notes, bonds, etc.
  • Payroll reports 
  • Project Reports
  • Tax Returns
  • Copies of any documents pertaining to the tax status of the company, including:
    • Pending audits 
    • Refunds
    • Litigation 
    • Special filing arrangements 
    • Other matters involving federal, foreign, state, or local taxing authorities

What to Focus on When Analyzing Key Financial, Insurance, and Tax Documents

When evaluating the above documents, you’ll want to evaluate some key areas of focus or concern acquirers typically inspect. For example, while you look at the above documents, it is important to note if the financial statement key metrics are in line with industry standards and with the acquirer’s standards. 

If you find that the documents don’t support your acquisition goals or standards, you’ll need to ask yourself a couple of questions:

  • Do your findings mean that the deal can no longer continue unless the target company makes changes to meet your standards?
  • Or, could the areas of contention be adjusted post transaction through efficiencies or cross-functional service offerings?

When choosing between either option during analysis, remember that the findings don’t have to be perfect. Rather, you’ll want to decide if they’re acceptable enough for the deal to continue.

What to Look for During a Financial Walkthrough

Through the due diligence inspection of financial matters, it is also an opportunity to gain an understanding of the company’s various financial processes through inquiry and a “walkthrough” of each process. Some areas that should be understood during this process include but are not limited to timekeeping policies, billing processes, employee expense processes, payroll processes, project reporting processes, and financial statement processes. 

Why You Should Request an Insurance Loss Report

When evaluating potential insurance issues within the transaction, requesting the insurance loss run report for the previous five years is critical. This report will give significant insight into any potential litigation or quality control issues the acquiree could have. If the report finds pending litigation or an excess of claims in the past few years, you should take the information as a red flag. Keep in mind that information about excess claims or pending litigation is typically very hard to get past to make the deal happen. 

Even when you find concerning information, it’s better than having it take you by surprise later in the process. Understanding information that can derail the deal during the due diligence phase saves time and money if the transaction does not continue. The earlier these concerns are identified, the earlier they can be addressed!

How to Make the Finance, Insurance, and Tax Analysis Stage as Successful as Possible

When performing due diligence over matters pertaining to the finance, insurance, and tax areas of an acquisition target, you’ll want to have a clear plan of areas of importance to keep the due diligence process on task and focused. As areas of concern are identified, staff should quickly document, share, and, in some cases, request supplemental information.

By quickly handling concerning information, you’ll allow your acquisition leadership team to make informed decisions regarding continuing the transaction, stopping the transaction, or potentially changing the terms of the deal to accommodate concerns identified. The key here is making sure your key team members and decision makers quickly receive accurate information!

Turn to Thinc Strategy for Merger and Acquisition Advisory Services

Whether you’re in the middle of due diligence or are just beginning to think about developing an expansion through acquisition strategy, Thinc Strategy can help. Our team of certified merger & acquisition (M&A) advisors has performed due diligence for many companies in the past, and can personalize the process for your unique needs. Our M&A advisory services also include feasibility studies, valuations, and leadership transition plans, ensuring we can walk you through every step of the process.

Learn more about our advisory services for mergers and acquisitions today. If you’re interested in our M&A services or have any questions, please contact us.

If you’re interested in acquiring another company, you’ll want to ensure you’ve carefully reviewed the target company’s contracts during the due diligence stage of a merger or acquisition after fully understanding what due diligence entails. While conducting due diligence, you’ll thoroughly analyze the qualitative and quantitative data of the potential acquisition target to help determine if the transaction will succeed or fail. Since a target company’s contracts can tell you if they’ll meet your financial and acquisition goals, evaluating contract documents is critical to a successful business purchase transaction.

Take a moment to learn more about how to conduct a due diligence contract review and the main elements to focus on when evaluating a potential purchase. 

The Main Types of Contract Documents You Should Request From an Acquisition Target

During due diligence, it’s critical you request various documents, and then assess any contract issues that may arise and identify areas of concern you can further inquire about if necessary. Below you can find examples of the most pertinent contract-related documents you should ask for:

  • Listing of all states or jurisdictions in which the seller company has any offices, employees, or business activities
  • Listing of all states or jurisdictions in which the seller company is qualified to do business
  • Certificates of incorporation, by-laws, operating agreements, and any other corporate governance
  • Listing of any warranty issues, current or pending litigation, governmental investigations, etc.
  • Copies of standard contracts used for clients and vendors
  • Copies of current contracts with top clients
  • Copies of active vendor agreements
  • Copies of active lease agreements

How to Analyze Contract Documents

When evaluating the above documents, there are some key areas of focus or concern acquirers typically inspect. For example, when looking at the above documents, it is important to confirm corporate documents state the owners of the company are who you think they are.

Though checking who the owners are might seem like a basic “check the box” type of task, it is something that could easily hold up a transaction. What if one of the owners has passed away and the corporate legal documents have not been updated to reflect the change in ownership? This fact alone could cause major delays and even “kill the deal” if attorneys need to get an estate or heir to agree or sign off on the transaction.

Analyzing contract documents during due diligence is also an opportunity to gain an understanding of whether the company has any pending legal matters, warranty matters, or governmental inquiries. For some, even the thought of pending legal matters screams “red flag, red flag!” However, it doesn’t have to be that way.

When the acquirer knows what’s pending, they’ll have the opportunity to gain a fair and thorough understanding of the pending matters. With this understanding, the acquirer can make an informed decision as to whether it impacts the transaction proceeding. 

If the pending legal matters are pervasive and related to the quality of work or employment practices, it could very well be a red flag that a cultural problem exists in the company that could steer an acquirer away. If the pending legal matters do not appear to be pervasive and/or are explainable, they may not be an issue, especially if the pending transaction is structured as an asset purchase with the buyer assuming no liabilities.

This contract evaluation section of due diligence also opens the door for the post-close need for tail insurance coverage if required by the acquirer.

What to Look for in Active Contracts during Due Diligence

When evaluating active contracts the acquiree is currently under, the acquiring company should note a few items in particular. These items include:

Are the contracts assignable?

Most client contracts are assignable at some level and with some effort. Understanding on the front end what effort is needed to get the contracts assigned to the acquirer is imperative to a smooth transaction. After all, the acquirer is primarily purchasing the acquiree’s book of work and, with that, their current contracts. These existing contracts are the positive cash flow the purchaser is expecting to be able to utilize in the near future post-close stage.

Are there any contracts the acquiree thinks will not be easily assigned? 

Any contracts the acquiree thinks will not be easily assigned should be clearly communicated to the acquirer during the due diligence contract review phase.

Is the contract fulfilling a “set aside” requirement? 

Oftentimes, government-based contracts will have provisions that a certain percentage of the contract must be awarded to a company with a small business set-aside. This set-aside requirement means a portion of the contract can only be awarded to companies that qualify, per the government, as a small business, minority-owned business, woman-owned business, or another disadvantaged business enterprise (DBE) classification.

Again, this requirement is not a deal killer. Rather, it’s a key point of understanding for the buyer as to what contracts might not be able to be renewed under the new ownership umbrella.

Why the Due Diligence Contract Review Stage Is So Important

As areas of concern are identified during the contract phase of due diligence, quickly documenting, sharing, and in some cases requesting supplemental information, plays a critical role in a successful acquisition. By thoroughly reviewing contracts and prioritizing important information, the leadership of the acquirer can make more informed decisions. For example, the contract phase can help leadership know if they should continue the transaction, stop the transaction, or change the M&A deal’s terms to accommodate identified concerns.

Turn to Thinc Strategy for Due Diligence and Contract Evaluation Assistance

At Thinc Strategy, we’re ready to help you acquire another business and meet your acquisition goals. Due to our experience assisting with many ownership transitions, you can trust our certified merger and acquisition advisors to help you create a contract evaluation plan and thoroughly review contract documents during the due diligence stage. Since we offer comprehensive M&A advisory services, we can also walk you through every stage of the expansion through acquisition process.

Learn more about our advisory services today. If you have any questions or want to schedule a complimentary consultation, please contact us.

When considering a merger or acquisition of another business, an inevitable part of getting to the closing table is going through due diligence. Due diligence is the part of the process where the acquiring firm can analyze all the qualitative data that makes up a firm, and assess the non-qualitative information that could cause a transaction to easily succeed or fail upon closing. If you want to ensure any business you’re interested in acquiring matches your company’s acquisition goals, it’s the perfect time to learn more about the ins and outs of due diligence. 

The Importance of Due Diligence

The due diligence stage of a business acquisition is typically the make-it or break-it point of a transaction. For example, a recent study by the Harvard Business Review determined between 70-90% of all acquisition transactions fail before they get to the closing table, with insufficient due diligence process efforts being a top reason for this failure. 

To avoid passing the due diligence stage only to later realize the company you want to acquire doesn’t match your goals, use the due diligence stage to identify red and yellow flags that could close or possibly kill the M&A deal. Since due diligence can allow you to dig into the target firm and find areas of concern before you fully commit to the purchase, it’s an incredibly important part of any acquisition.

Questions to Ask Before You Begin the M&A Due Diligence Process

Due diligence is a time-consuming process, but you can cut down on wasted time by knowing what questions to ask before you start. As you consider leading a due diligence effort, it’s crucial to decide the following before you begin the due diligence process in any merger or acquisition:

  • Do we have all the required expertise? If so, do they have the capacity needed?
  • Who is responsible for the overall process? Who should be tasked with overseeing each component?
  • What areas of due diligence are of key concern for leadership and C-suite executives?
  • What type of deliverable do we need to produce from the due diligence process to present to the Board of Directors or others?
  • What are the timing expectations?
  • How will you and your team handle non-responsiveness or lack of data?
  • Are there any direct or indirect “deal breakers” to be on the lookout for?

These questions will help your team focus their efforts purposefully during due diligence, and will ensure the target firm both matches your values/goals and fits your overarching business growth strategy.

What Does a Due Diligence Structure Look Like?

Before you begin due diligence, familiarize yourself with the standard M&A due diligence structure listed below:

Due Diligence Chart

While you can use a standard due diligence structure to get started, it’s important to know that the structure will likely need to be customized to meet the acquirer’s requirements and leadership’s key areas of interest. This need for a personalized structure could mean due diligence begins with the standard structure, and some items are removed as they are deemed insignificant to the acquirer. Alternatively, it could also become apparent that some items need to be added once deemed significant to the transaction. 

What to Expect During the Due Diligence Process

Throughout due diligence, key documents and information will be shared to help gain comfort around each area of key concern for the acquiring firm. Due diligence is typically performed through various methodologies, such as inquiry of key leadership, observation of various processes, and inspection of key documents provided by the acquiree. 

It is important to note that performing due diligence is not the same as conducting an audit, regardless of who you engage to perform the due diligence. While similar procedures are used to gain comfort around key areas in both due diligence and during an audit, an audit is governed by various standards boards, and is fundamentally different than due diligence review. 

As the key areas are reviewed during due diligence, it is not uncommon to come across items that can be considered a concern to the buyer. These concerns can range from client concentration issues, key employee retention concerns, concerns around the validity of financials, and everything in between. 

Due diligence during a potential M&A transaction is very specific to the acquisition itself. For example, concern for one potential buyer might not be the same concern for another potential buyer, depending on the buyer firm and their end acquisition goals. The purpose of due diligence is to identify any areas of concern so leadership can determine if possible acquisition problems are legitimate, and identify how those concerns should be handled more effectively. 

Choose Thinc Strategy for Merger and Acquisition Advisory Services

At Thinc Strategy, we’re happy to guide you through due diligence and the entire M&A transaction process. Our team of certified merger and acquisition advisors can help you craft your acquisition goals, identify key areas of concern for due diligence, and serve as your company’s personal development consultant. Throughout the entire time working with us, we’ll focus on maximizing your value for a successful transition.

Learn more about our transition planning services today. If you have any questions or want to schedule a free consultation, please contact us.

You have heard the old adage, “An Organization is Only as Good as its People.” That has never been truer with an organization than with a professional services firm. This statement is so true that the opportunity to gain skilled talent is one of the top reasons for a merger or acquisition in today’s market. The great irony in this statement is that while a successful deal creates an opportunity to gain talent across the organization quickly, mismanagement of talent through a transaction could be detrimental to the most straightforward transaction.

A survey by the Society for Human Resource Management (SHRM) found that fewer than half of survey respondents reported they were successful at retaining employees through a transaction. SHRM further notes that their previous studies and surveys have shown executives preparing to acquire a company focus more on the other company’s financials than on how to blend the values and cultures of the two organizations. 

While focusing on a company’s financials is important, you’ll also want a strategy in place for employee retention to keep employees from leaving if one of your acquisition goals is to quickly gain (or retain) skilled staff.

Why Culture Matters When Acquiring a Company and Retaining Talent

When should you start thinking about talent retention during a transaction? Day 1 Step 1: When looking at the merger and acquisition process, you can get it right from the beginning by identifying the correct buyers and sellers.

Whether you are the buyer or seller, you must have a clear understanding of what your company culture and values are in order to seek a transactional partner that aligns with your organization. As you think about a cultural match, does it have to be perfect? Cultural alignment is not necessary for all aspects of your company culture, but there can’t be a cultural mismatch in your non-negotiable values.

buyer seller graphic

How to Identify Key Talent During an Ownership Transition

Once you have a good cultural match identified and the transaction has moved into the Due Diligence phase, it is time to identify the key talent. Whether you are the buyer or the seller, accurately identifying the talent is an important step in the process. The seller is responsible for accurately representing the team, their roles, and their importance in the organization. In turn, the buyer is responsible for being open and transparent with the seller about where the team fits into the larger picture.

During the due diligence stage of an ownership transition, the seller will need answers to the following questions:

  • Does the buyer plan to retain all talent?
  • Does the buyer plan to eliminate redundant roles such as C-suite, HR, IT, etc. positions? 
  • If so, how will staffing cuts be determined?

Answers to these key questions need to be transparently communicated by the buyer to the seller during the due diligence process. The seller is typically identifying talent through a top-down approach, where senior leadership informs the buyer of the key talent and their importance in the organization. 

If you’re the seller, you’ll want to steer clear of the following challenges to give the buyer more accurate information and make talent retention as smooth as possible:

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How to Keep Employees from Leaving After Identifying Them

Now that the talent has been identified, how do we retain them? The path to employee retention is paved with….dollar bills? Not at all! Financial incentives are often the first lever companies consider when thinking about keeping existing talent secure. This approach can be expensive on top of the purchase price, and less effective for long-term retention. 

Due to the potential expense and lack of long-term success, the financial incentive strategy is best suited for addressing short-term needs. For example, you might use this approach when you need an IT Manager to stay on for six months to assist with the transition to the new IT platform.

Since we know financial incentives are not the most effective, let’s try this again. Is the path to retention paved with clear communication and expectations?

In fact, key employees identified during the due diligence process are oftentimes aware of the merger or acquisition ahead of the rest of the employees. Sometimes they’re even identified in the Asset Purchase Agreement/Stock Purchase Agreement (APA/SPA) as “key” to the M&A deal. Key employees could be offered stock in the acquiring company as a method to keep them from leaving.  A buyer should also always clearly identify the importance of the talent’s role, and communicate that importance to the talent during the business ownership transition.

Clear Communication: Tips for the Seller and Acquirer Sides

When communicating to the rest of the organization, each “side” of the transaction has clear communication guides they need to establish and follow as a united team.

On the seller side, leadership needs to have a well-thought-out communication plan ready to deliver during the internal communication of the transaction. This plan should quickly address some of the key questions employees are thinking immediately after hearing the words “we are merging with….”. The number one question employees have after hearing these words is often, “Will I still have a job?” It is critical to address this reasonable concern immediately with as much information as you can share in the group setting.

Other key questions to quickly address with the communication plan include: 

  • Why is this transaction occurring?
  • When is it occurring?
  • What is the new company like? 

After the initial communication to the seller-side employees is complete, it is advised the acquirer’s leadership team create an opportunity to speak to the seller’s team, both as a group and one-on-one when needed or requested by the seller’s employees. Some key questions to address in this initial communication include: 

  • Why are you excited about this transaction?
  • What was it about the seller company that was so attractive to you?
  • Where do we go from here from the employee retainment perspective?
    • Will we have jobs?
    • What will I be paid?
    • Will I lose benefits? (health, paid time off, flexibility, seniority, etc.)

When thinking about a merger or acquisition and whether you are on the buyer or seller side of the deal, talent retention can quickly derail a deal and cause a transaction to be deemed unsuccessful in the eyes of employees. Having a clear plan and proactive strategy from the beginning on how to keep employees from leaving helps structure a deal that is successful for both the company and its staff members.

Choose Thinc Strategy for Merger and Acquisition Advisory Services

Now that you know more about how to retain employees during a business ownership transition it’s time to turn to Thinc Strategy for additional assistance. At Thinc Strategy, we’ve helped many companies reach their acquisition goals and retain top talent during an acquisition. As an M&A advisory firm, we’re here to help you through every step of the expansion through the acquisition process.

If you’re currently involved in or planning an acquisition, learn more about our business ownership transition services. You can also contact us to speak with a certified merger and acquisition advisor!

Once you’ve completed the sign and close stage of acquiring another company, you’ll only have one step left—post-close integration. During this stage, you’ve already spent months talking with a seller and have finally closed the transaction, but you’ll want to avoid the trap of letting the acquisition lose steam. The acquisition team may need a break to focus on other work priorities, or they may be on to the next transaction. 

If you need a refresher on all seven steps, you can review them below: 

  1. Define your acquisition strategy 
  2. Identify target companies
  3. Build a business case and develop financial modeling 
  4. Due Diligence
  5. Deal Structure negotiation
  6. Sign and close
  7. Post-close integration

With some of your team redirected to other transactions or on a break, you’ll face a couple of important questions that will affect how well the acquired company blends into your overarching organization. For example, who will stay involved through the integration stage? What staff can be added to the integration team? To ensure you can answer these questions and meet all your acquisition goals, take a moment to review some of the best practices for post-close integration planning.

Tips for Post-Close Integration Success

When you hire a new employee, you have an onboarding process. Acquiring a company requires an onboarding process that’s just as rigorous (if not more!) at a much larger scale. The company has a culture, systems, and processes that will change once fully integrated. If you want to capture the momentum by engaging the people and building systems in a thoughtful and purposeful way, follow these tips below:

  • Talk about post-close integration before closing:
    • Align during due diligence – use the time spent talking with the seller to confirm the data and talk about integration before the M&A transaction is complete.
    • If we all assume we will be one team in the future, we should plan for that day proactively. Without a plan, most acquisitions start out doing things exactly like the previous day, and before you know it, a year has gone by, and the two firms are still working separately.
    • With a clear integration plan, the staff will know what is coming and when. This plan directly connects to the retention of the new staff. Being acquired by another company is a time in a staff member’s professional life when they can choose to stay with the group they have worked with under a new brand or leave to work for a competitor.
    • When the staff leaves, it depletes the value of your long-discussed business purchase in a people-intensive industry, so try to connect with the acquired company’s staff and make a plan that promotes open communication and an empathetic retention strategy.
  • Map out a timeline of activities and goals:
    • Who is responsible for each task?
    • When is the task due?
    • When is a given task considered complete?
    • What is the purpose of the task?
    • Who, what, how, and when do we communicate information?
    • How will we share integration files?
  • Celebrate milestones:
    • Simple, informal celebrations throughout the first year can be good for morale and remind everyone that they may not hear all that is going on each day, but progress is being made.
    • Let different staff communicate the milestones – staff from both the existing organization and the newly acquired company.
  • Changing the name:
    • For many, letting go of the company name and brand is difficult. It is in the best interest of all parties to be involved in changing the name if it is going to be changed. Why?
      • It is difficult to have one foot in the door for each brand and also be a cohesive, single team.
      • Clients care about who they work with, don’t confuse them by using different legal names.
      • Staff integrations generally happen faster if they become part of the new company in every way possible.
    • Allow the seller to use their brand with a tagline for a few weeks. Though, even the seller will celebrate when the company is under one identity not long after the acquisition transaction, as it is tiresome to continue explaining the merger story.
  • Reevaluate the team, roles, and structure at a certain point in the integration process:
    • Don’t assume you know the staff until you work with them. Some team members are rock stars in smaller firms but do not perform as well in larger firms. Other team members may be sleepers until they have a larger infrastructure to support their professional career development. The point is, there may be a place for everyone, but it might not look like it did in the past.

Turn to Thinc Strategy for Post-Close Integration Assistance

Alongside following the tips above, you can ensure the post-close integration stage of an ownership transition is successful by working with a mergers and acquisitions advisory firm. At Thinc Strategy, our certified merger and acquisition advisors are ready to help you tackle every step of acquiring another company and improve your market growth strategy. With our many available transition services, we’re sure we can help you meet all your acquisition goals in the most efficient manner possible.

If you need any help during any stage of the expansion through acquisition process, please contact us to schedule a complimentary consultation.

After completing deal structure negotiation and due diligence, your firm is almost done with all the steps required to acquire another business. Though you’re close to finished, it’s not time to lose focus. With due diligence completed, your firm is ready to begin the second to last stage in the expansion through acquisition process: sign and closing. If you want to ensure you’ve covered every base in the sign and closing stage, learn more about how it works and its main elements.

If you need a refresher on all seven steps, you can review them below: 

  1. Define your acquisition strategy 
  2. Identify target companies
  3. Build a business case and develop financial modeling 
  4. Due Diligence
  5. Deal Structure negotiation
  6. Sign and close
  7. Post-close integration

How Does the Sign and Closing Process Work?

At the beginning of the sign and close stage, due diligence is complete, and the legal team is underway with reviewing legal documents. These documents will include the purchase agreement, employment agreement(s), and other required legal documents based on the transaction type.

Usually, most buyers and sellers sign the legal documents and close the transaction on the same day. One decision you may consider instead is closing after signing the legal documents. Many buyers prefer this process because it gives them time between signing and closing to meet with clients and articulate transition both externally and internally. It also allows time to onboard employees, data, systems, and so on. Many sellers like the process for similar reasons. 

During this time between signing and closing, you might also want to consider spending time speaking with the seller’s staff. By explaining your vision and culture to the seller’s staff, you’ll be more likely to retain them. Besides attempting to retain staff, you’ll want to rely on your attorneys, as they can offer solutions for each party to consider if there are financial concerns with signing and receiving payment at closing. 

Details Required for Closing Documents

Many schedules and details are required for closing documents. Most of these will be provided by the seller, so be sure to include time for your review of schedules. Many sellers have never done this before, and if they do not have an advisor to assist with preparing the schedules, they may not have the know-how or resources. 

While you cannot prepare these schedules for your seller, you can offer feedback or require certain formats and information. Below are a few examples of schedules and details that may be required:

  • Fixed assets
  • Contracts
  • Prepaid expenses
  • Excluded assets
  • Accounts receivable aging
  • Work-in-process aging
  • Seller employees 
  • Key employee retention agreements
  • Pending litigation
  • Financial statements
  • Encumbrances
  • Insurance
  • Intellectual property
  • Allocation of purchase price

Since there are various types of schedules in the exhibit section of the purchase agreement, communicate the list of schedules required during the final days of the due diligence process. The seller will have more time to prepare, and it will give you the bandwidth needed to review the schedules before closing. Some schedules are updated just before closing, so having the format approved beforehand can be especially helpful. 

Legal Language Negotiation

Once the documents are drafted and distributed for everyone’s review, you’ll move on to legal language negotiation, in addition to other deal points. The attorneys will discuss issues, and if they are unable to conclude, the buyer and seller may need to meet with the legal team to align with open issues.

Post Closing Celebration

The closing can feel like a non-event after all the hours, discussions, and resources put into this process. Schedule a short celebration even if you can’t hold one in person. We have been a part of several virtual toasts in the past few years, and while they’re not the same as those in-person, virtual celebrations are better than not celebrating such an eventful milestone. 

Need Help Signing and Closing a Deal? Choose Thinc Strategy

When you need assistance closing a deal or want expert guidance through every step of the expansion through acquisition process, Thinc Strategy’s certified merger and acquisition advisors are ready to help. With our extensive history of assisting with market expansion strategy and business ownership transitions, we can help you define your acquisition goals, identify your top prospects, and ensure the entire acquisition process runs as smoothly as possible. If you want to schedule a complimentary merger and acquisition advisory service consultation, please contact us today.

Now that Due Diligence has been completed and you are ready to move forward with a deal, we will begin the fifth step in this series.

If you need a refresher on all seven steps, you can review them below: 

  1. Define your acquisition strategy 
  2. Identify target companies
  3. Build a business case and develop financial modeling 
  4. Due Diligence
  5. Deal Structure negotiation
  6. Sign and close
  7. Post-close integration

One of the essential stages in the expansion through acquisition process is deal structure and negotiation. In this stage, you’ll want to first define your general deal structure before you begin serious discussions with sellers. Since the purchase structure can have legal and tax implications for the buyer and seller, it’s important you have a clear understanding of what you can negotiate and what is imperative to a successful deal. 

We recommend seeking legal and tax counsel when preparing a non-binding offer. The legal document containing your non-binding offer will address key points that need to be agreed upon before due diligence can begin. If you want to create a deal structure that fits your business acquisition goals, find out more about the most common purchase structures, the main components of any deal structure, and what to do after you send your offer.  

The Two Most Common Purchase Structures

As you put together an offer to acquire another company, you should be aware of the two most common purchase structures to see if either align with your goals. Learn more about the two main deal structures for operating and professional businesses below:

1. Stock Purchase 

Just as the name implies, a stock purchase involves a buyer purchasing the stock of the existing shareholders either in part or in full. A significant downside to the buyer is that they are buying all the risks associated with prior client contracts, suppliers, subconsultants, employees, terminated employees, and the list goes on. The buyer may not deduct the cost of the stock for tax purposes in most cases.

2. Asset Purchase 

An asset purchase is very common with operating and professional services businesses. The buyer buys the assets of the business and hires the employees. The buyer does not assume non-operating liabilities typically, and can deduct the cost of the purchase over time for tax purposes.

The Main Components of An Acquisition Deal Structure

Regardless of whether you choose to go with a stock purchase, asset purchase, or another type of deal structure, there are a few main components of any purchase structure you’ll want to include in your offer. These key components include:

  • Date of offer
  • Purchase price and expected payout timeframe
    • Cash
    • Stock
    • Cash/Stock
    • Earn-out
    • Commission
  • Roles and compensation for key-stakeholders
    • Restrictive covenant requirements
    • Employment agreements required
  • Definition of what is being conveyed by the seller for the value the buyer is paying
  • Tail insurance requirement
  • Date offer expires
  • Expected closing date

There are many other details you can include, and we encourage you to add anything that would be a dealbreaker for you if the seller does not agree. For most other details, stay broadly focused to allow due diligence to provide the data needed for final decisions. It is much harder to walk things back once time, energy, and money have gone into this process. 

What to Do After You Send Your Offer

Once the seller receives the offer, follow up to schedule a check-in call to answer any questions and receive feedback. It is common for the seller to negotiate a non-binding offer. Before answering the seller, it is important to prepare your internal team and discuss what is negotiable and what is not. Do not immediately react to the feedback. Ask questions to gain an understanding of the terms, and then meet with your team to discuss. 

Many times, what might have been a “no” could turn into a yes by thinking through the response. Consider what you can do and focus on how to communicate that message clearly. If the seller has asked for something unreasonable or not within your ability to see a clear return on investment and there is no way forward, “no” is the best answer. 

Once the non-binding agreement is executed, due diligence begins! 

Choose Thinc Strategy for Deal Structure and Negotiation Assistance

Need help choosing a deal structure and crafting an offer that reflects your expansion through acquisition goals? Thinc Strategy can help. 

As a leading provider of merger and acquisition advisory services, we’re prepared to walk you through every step of the acquisition process and ensure you’re fully informed throughout. With one of our certified merger and acquisition advisors in your corner, you’ll know any acquisition you make has been well-vetted, meets your goals, and is well-positioned to show a solid return on investment.

To receive a merger and acquisition advisory service consultation, please contact us today.

In our previous article in this series, we covered the third step in the seven-step expansion through acquisition process. With the building a business case and developing financial modeling stages completed, your firm will have searched diligently for a target firm that meets all your needs from the perspectives of market sector, geographic location, service offerings, and cultural fit. You’ll also have issued and signed a well-thought-out Letter of Intent (LOI). Now, it’s time to begin the next step: due diligence. If you need a refresher on all seven steps, you can review them below:
    1. Define your acquisition strategy
    1. Identify target companies
    1. Build a business case and develop financial modeling 
    1. Due Diligence
    1. Deal Structure negotiation
    1. Sign and close
    1. Post-close integration
With the effort used to get to the due diligence stage, it’s time for the hard work to begin! A recent study by the Harvard Business Review determined between 70-90% of all merger and acquisition transactions fail before they get to the closing table. One of the biggest reasons for this high failure rate is because of insufficient due diligence.  If you want to make your acquisition succeed, it’s important to understand what due diligence is and how to thoroughly complete it.

What Is Due Diligence?

Due diligence is the part of the business acquisition process where the acquiring firm can analyze all the qualitative data that makes up a target firm, and assess the non-qualitative information that could make a transaction easily succeed or fail upon closing.

Top Questions to Ask Before Beginning the Due Diligence Process

Due diligence is a time-consuming process. As you consider leading a due diligence effort, it is important to ask and answer the following questions before you begin the due diligence process:
    • Do we have all of the expertise required? If so, do they have the capacity needed to complete due diligence thoroughly?
    • Who is responsible for the overall process?
    • Who will oversee each component within this stage?
    • What areas of due diligence are of key concern for leadership and why?
    • What type of due diligence deliverables do we need to produce to present to the Board of Directors or others?
    • What are the timing expectations from start to finish?
    • How will you handle non-responsiveness or lack of data?
As you look over the above questions, one key question is missing – where and how do I start?

How Professional Services Can Help Your Company Through Due Diligence

Thinc Strategy has worked with various professional service firms across the United States to perform due diligence services on their behalf. Through these various engagements, we have developed a preliminary template of a typical due diligence engagement. Does this mean all engagements should cover each of these topics? Not necessarily. Due diligence needs to be customized to meet the acquirer’s needs and review key areas of interest to leadership. This need for customization could mean due diligence begins with the standard structure, with some items removed as they are deemed insignificant to the acquirer. It could also mean that some items are added as they are deemed significant or critical to the transaction. Consider the below graphic for the standard due diligence structure a strategic starting point that can be molded where necessary:
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Choose Thinc Strategy for Merger and Acquisition Advisory Services

As an industry leader in providing merger and acquisition advisory services, Thinc Strategy can help you through every step of the expansion through acquisition process. Our strategic business planning consultants will ensure your acquisition goals are met and the entire acquisition process runs smoothly. With our experts in your corner, you’ll know you’ve completely covered everything you need to know in the due diligence stage and are ready to move on to the deal structure negotiation phase. If you’re interested in receiving a complimentary merger and acquisition advisory service consultation, please contact us. For more information on the seven steps of the merger and acquisition process, stay tuned for our next article, where we’ll delve deeper into each key area of due diligence to review what are typically key areas of concern and concentration.

In our previous articles in this series, we’ve discussed the first two steps of the business expansion through acquisition process—defining your acquisition strategy and identifying target companies. After your firm has worked for hours developing an acquisition strategy and identifying a target firm meeting your acquisition goals, it’s time to move on to the third step: building a business case and developing financial modeling. If you need a refresher on all seven steps of the expansion through acquisition process, you can review them below:

  1. Define your acquisition strategy 
  2. Identify target companies
  3. Build a business case and develop financial modeling 
  4. Due Diligence
  5. Deal Structure negotiation
  6. Sign and close
  7. Post-close integration

How To Develop a Financial Model

Once a target firm has been identified, building a financial model is the next step to solidify your decision to move forward with an acquisition. Financial modeling is a broad term that can be used to describe a multitude of various financial models for analysis. 

A financial model could be used to determine the acquisition company’s value, how shares of ownership will be transferred, and how a target company’s financials will affect your firm’s financials and overall stock value. A financial model can also provide insight for various “what if” scenarios and cover many prerequisites necessary for proceeding down the path to acquiring a new company. 

What Is a Financial Model?

While the term “financial modeling” sounds complex, and it certainly can be, the most successful models tend to keep it simple. A model is typically staged in an excel spreadsheet format, and should be presented in a manner that is well documented with the assumptions used and easily understood by the key decision-makers. 

The old adage “garbage in, garbage out” never holds more true than with financial modeling. Creating the most dynamic and well-laid-out model is ineffective if the inputted data has not been verified or is unrealistic in terms of projections. When “garbage data” is input into a model, the output is also “garbage.” These inaccurate results will create a situation where the key decision-makers are making big decisions based on inaccurate assumptions and unrealistic projected outcomes. 

The Four Main Types of Financial Models & Questions to Ask

When moving forward with a potential business acquisition, key financial models that help influence the decision to move forward or not are imperative to good decision making. Below is a selection of commonly used financial model scenarios that assist leadership with decision making: 

  • Valuation Model: How much is the target company worth based on its historical performance and projected performance?
  • Model of Projections: What is the projected performance of the target company?  What is the projected performance of your firm?  Are they realistic based on the historical performance of the target firm?  Are they realistic based on the strategic plan of the target firm?
  • Consolidated Financial Model: Based on the target firm’s historical and projected financials, what would a consolidated profit and loss statement look like when combined with your firm’s historical and projected financials?  What would a consolidated balance sheet look like? Is the acquisition diluting your earnings and stock price? What does a consolidated cash flow look like? Can we maintain a positive cash flow with this endeavor?
  • “What if” Scenario Modeling: Once the acquisition is complete, what if you increased revenue by 10% over projections based on the synergies of the two firms?  What if you need to hire five, six, or ten more professionals?  What if you need to invest in a significant IT overhaul to get the acquisition up to the same level of technology as your firm?

Contact Thinc Strategy for Merger and Acquisition Advisory Services

As you can tell, financial modeling can be both a powerful tool to assist decision-makers with critical acquisition decisions and overwhelming when trying to identify the key models needed. Instead of going through the acquisition process alone, turn to Thinc Strategy. Once you contact us, we’ll welcome the opportunity to provide you with the tools necessary to create a strategic financial model and make the most well informed decisions for your organization! 

To receive a merger and acquisition advisory service consultation, please contact us today. If you want more information on all seven steps of the merger and acquisition process, be on the lookout for our next topic — due diligence.

When you’re thinking of expanding your company through acquisition, you’ll need expert guidance through the seven main phases of a successful acquisition strategy. These phases include:

  1. Define your acquisition strategy 
  2. Identify target companies
  3. Build a business case and develop financial modeling 
  4. Due Diligence
  5. Deal Structure negotiation
  6. Sign and close
  7. Post-close integration

In our previous article in this seven-part acquisition series, we focused on how to define your acquisition strategy. Now that you know how to create an expert acquisition plan, it’s time to move on to the next step: identifying target companies to purchase. To make sure you target companies that meet your acquisition goals, learn more about how to identify the right businesses, and the main benefits of expansion through acquisition.

What Are the Benefits of Expansion Through Acquisition?

If you’re still deciding if expansion through acquisition is the right approach for growing your business, review some of the top benefits of this expansion strategy below:

  • Higher profits
  • More opportunity to diversify your regions, markets, and services
  • Improved revenue streams and increased customer base
  • Raised company value
  • Better opportunities for existing staff to increase their skill sets and grow professionally
  • Greater business exposure to a larger audience of clients and talent

How to Target the Right Businesses to Buy 

Figuring out how to acquire a business that is a well-fitting acquisition target and then getting them to the table is both an art and a science. We recommend starting with a list of known companies that you think align with your current company’s culture. It’s also best practice to prepare a target list of businesses that align with your firm’s overarching values and growth goals. Due to the time it takes to research this information properly, most firms outsource this work to a professional services team.

To help you determine which potential acquisition prospects should move on to the next stage of the assessment, you should also utilize clear metrics at each stage of the process. Examples of these metrics can include a target company’s geography, employees, services, offices, revenue, market share, and expertise. With these metrics, you can more easily determine the prospects you can remove from your list and those you should actively seek to acquire.

What to Ask & Do When Developing Business Acquisition Possibilities

Once you’ve used your unique metrics to judge prospects, it’s time to begin talking with your top targets. In this stage of target identification, you’ll  meet and vet businesses for fit based on your acquisition plan. Find out more about how to properly develop these targets and then meet with them below:

  1. Develop Targets

Before you meet with a target, you’ll want to begin developing a relationship with them first to find out if they’re a good fit or even open to selling. For example, you can use this stage to find out if the seller is on the market or not. If so, do they have a broker? If not, you will need an approach to open the dialogue.

  • When talking with sellers, you should screen for cultural fit and gather information that includes things like:
    • Leadership exit strategy of selling firm
    • Ownership breakdown and partners
    • Second-tier leadership
    • Breakdown of services
    • Annual revenue and profit
    • Potential risk factors
    • Litigation issues
    • Brand

The target development phase is not the time to ask for all the information you will want to see in detail. It is wise to gather enough information to see if a potential Letter of Intent or Term Sheet (non-binding) will be offered to the seller. Once that information is received and value is agreed upon, you will have ample time to review all information during the due diligence process to confirm the high-level data provided.

2. Meetings

The next identification stage to consider is meetings, but how do you navigate this effectively? To strategically buy a business, you should always execute a mutual non-disclosure agreement (NDA) before meeting with the seller. During the introduction meeting, keep the meeting attendees to a minimum. Don’t bring your entire M&A team in on day one. This approach could be intimidating to the seller, and if they’re not a good fit, a waste of resources.

The goal of the first meeting is to determine if there is enough interest between the two parties to continue the conversation. Ask questions about values, why they are selling, who their ideal buyer is, who handles business development, capabilities of second tier leadership, and what plans they have post-transaction.

If you are interested in continuing to pursue the prospect, begin gathering additional detailed information related to their financials and organizational structure. Ask them questions like, are your contracts assignable, and are you aware of tail coverage? During your discussions, there will be high-level topics that will lead to additional questions before you can begin the valuation and modeling process.

Choose Thinc Strategy for Business Acquisition Identification Assistance

Now that you know more about how to buy a business, it’s time to work with a business acquisition team who can help you identify the right business acquisition targets and assist with every step of the process. At Thinc Strategy, our team is ready to help you identify targets matching your values and acquisition goals. Besides assisting with finding the best targets possible, our team can guide you through all seven steps of acquiring a company.

If you’re interested in our advisory services for mergers and acquisitions, please contact us today to receive a free consultation. Also, stay tuned to learn more about the next topic in this series — developing a business case and financial modeling.

Deciding to acquire another company is a big decision that requires resources like time, money, and expertise. If you want to make a potential business acquisition successful, you’ll need to have a thoroughly planned out business acquisition strategy. To follow a thoughtful and informed process, use the following seven steps to plan and analyze the acquisition:

  1. Define your acquisition strategy 
  2. Identify target companies
  3. Build a business case and develop financial modeling 
  4. Do your due diligence
  5. Negotiate the deal structure for acquisition
  6. Sign and close
  7. Complete your post-close integration

Business expansion through acquisition has the potential to:

  • Expose your business to a broader audience – clients and talent
  • Increase your customer base and improve revenue
  • Raise your profits
  • Diversify services, markets, regions
  • Create new opportunities for your existing staff
  • Increase company value

Top Questions to Ask & Answer During the Strategy Definition Stage

Business expansion through acquisition can be costly, distracting, and frustrating if not planned properly. The first step in conducting a successful business acquisition is to decide the why, who, what, where, and how you want to acquire a company. Focus on asking the following critical questions to fully define your acquisition goals and create a plan that offers stability and forethought throughout the purchase process:

  1. Define Your Why: The first question an informed seller will ask is why you’re acquiring. It is important that you and everyone on your team have a consistent response. We recommend that your answer ties back to your overall strategic plan, so you can explain the vision you have for the future when asked. This vision-oriented answer will inform the seller if your acquisition goals align with their vision of a combined future.
  1. Who: Who is the ideal seller? This is sometimes hard to define in the beginning because we all want many things from the transaction, and one of the most important is your defined why – what characteristics will move us closer to our Vision?  By setting the gold standard of who you would ideally want to acquire, you’ll have a roadmap to what to search for and the most important characteristics and values. As you talk with potential firms, go back to this roadmap and rank where they align and where they do not. Having a strong idea of your ideal acquisition offers a way to rank potential firms and ways to consider if the areas out of alignment can be overcome.
  1. What: What size firm? What markets do they serve? What value range are we comfortable spending? What resources are required, and do we have them internally? Does the internal team have resources within their teams so they can devote required time to the transaction?
  1. Where: Geography matters. Have you done the market research to know where to expand your business? When you do not understand the long-term potential of the region, you are buying into one of the most common mistakes that cause many business acquisitions to fail. Do the research and develop criteria that matters for your business. Since your criteria will be different than other buyers, make sure it is unique to what matters for your long-term success. Are there schools close by that offer a talent pool for my business? What are projections for growth in the business’s location and surrounding areas? These are just a sample of questions to consider.
  1. How: Defining your ideal structure early in the process is another valuable piece of information to provide the seller early in the process. Understand how:
    • Much money you are willing to spend and your timeframe for return on investment
    • You will structure the payment terms
    • You will integrate the company once purchased

These “how” questions can range from how to handle the most basic process to high-level deals terms. Not every “how” has to be nailed down. Quite frankly, until there is a seller, it will be impossible to define every “how.” The key is to define the non-negotiable items, or at least the items (such as  price) that you know have limits for your own resources.

Join us next week, when we will discuss the second step of the strategy creation process: Identifying target companies. 

Interested in how our business acquisition team can develop a custom purchasing strategy for you? Contact us today for a free consultation on how we can work together to help your company grow. 

If there are other topics you’d like to learn about, please feel free to submit them to us!

Growing a business through expansion requires planning. Use our 7 step guide to learn how to create a successful business acquisition strategy process.

Achieving business expansion through proven acquisition strategies has the potential to:

  • Expose your business to a broader audience – clients and talent
  • Increase your customer base and improve revenue
  • Lead to higher profits
  • Diversify services, markets, and regions
  • Create new opportunities for your existing staff
  • Increase company value

Deciding to acquire another company is a big decision that requires resources like time, money and expertise. It is most important to start with a well-defined business acquisition strategy that provides purposeful structure throughout each stage. To follow a thoughtful and informed process, plan and analyze the transaction with the following seven phases:

  1. Define your acquisition strategy 
  2. Identify target companies
  3. Build a business case and develop financial modeling 
  4. Due Diligence
  5. Deal Structure negotiation
  6. Sign and close
  7. Post-close integration

Over the next seven weeks, Thinc Strategy will provide insights into the best practices when executing a business acquisition strategy. We will delve into each phase in detail, offering insights to help you plan your next successful transaction, and achieve growth. Next week, we’ll first dive into step one: “Defining your Business Acquisition Strategy.”

Need help planning and executing a business acquisition strategy? Our acquisition advisory and planning services are here to help your company grow through expansion. Contact us today to learn how our experienced strategists can make your business more profitable. 

The concept of feedback in the workplace can feel daunting, especially if team members associate it with a negative review of their performance.  Feedback should open the door to healthy communication and provide immense value to a team and the work they produce.  The goal is to create a positive outcome that nurtures growth for the employee as well as the employer. Constructive criticism, which may be perceived as a less desirable part of feedback, can allow a team member to evolve, personally and professionally. Certain soft skills are necessary to give negative feedback in a constructive way.  The goal is to provide advice rather than judgement regarding ways an employee can improve their performance. If a team member continues to miss deadlines on projects, ask them if they need help.  Offer personal insight on how you found ways to navigate a busy workload better, all while reinforcing the importance of meeting a deadline. Feedback should be relevant and given in a timely manner. If you tell someone their presentation from three weeks ago really resonated with the group that may not be as impactful as it could’ve been had they heard it sooner. Team members want to feel that their work is recognized and valuable to others.  Giving and receiving feedback shouldn’t be limited to annual reviews and staff meetings. A workplace bustling with feedback creates a healthy culture for employee growth and higher performance. “Average players want to be left alone. Good players want to be coached. Great players want to be told the truth.” Doc Rivers
By Karen Albritton, Partner at Thinc Strategy I’ve been inspired by this line from a Darius Rucker song for some time now. Without going overboard, I challenge myself, from time to time, to do something I’ve never done before.  My most recent challenge was completing an indoor mini triathlon. When I told a friend what it entailed, a 20-minute swim, 20-minutes on the bike and 20 minutes on a treadmill, he said, “Oh that’s easy.” Maybe he felt that way but considering I hadn’t been in a pool since last summer and had never done any of these activities back-to-back, I didn’t feel that way. His comment gave me pause as I reflect on business leaders that we work with at Thinc. They are repeatedly doing things for the first time and many times it’s not easy. Of course, we all found ourselves in this position during the pandemic, pivoting with the many changes, adapting, and responding. Leaders who are steadily growing their business, year after year are running a business that’s larger than it’s ever been. Every year is a new set of circumstances and opportunities. Most of these leaders are constantly striving to elevate their business, developing new products or services, piloting new processes, or acquiring other firms. How do these leaders continue to succeed at new things? Often, they seek out someone with experience as a guide. In my situation, I had two friends who completed the triathlon the year prior and were willing to share the run-down on what to expect and how to prepare. This is similar to the role we have established with our clients, by offering our consulting services, providing them with our own experience, plus the knowledge we’ve gleaned from working with similar clients. Another observation about the leaders we work with is that they are rigorous at preparing. They do their homework. This may be in the form of due diligence for an acquisition or long-term strategic plan to ensure that they have developed a roadmap for the success of their business. The final step is commitment. They know things don’t always go as planned, but that doesn’t stop them. They execute on their plans, learning and adapting, just as we’ve all done over the past two years.

So, when’s the last time you did something for the first time? We’d love to hear about it.

In March, congress passed the Coronavirus Air, Relief, and Economic Security Act (“CARES Act”), and since then companies throughout the country have jumped on applying for the Paycheck Protection Program (PPP) loan. On June 5th, congress passed an amendment to the CARES Act called The Paycheck Protection Flexibility Act. This amendment gives borrowers greater flexibility when qualifying for loan forgiveness for their PPP loan. Following weeks of many unknowns around the logistics of the PPP loan and several rule changes made by the Small Business Administration (SBA), we can finally say we have some certainty regarding how Borrowers can apply to have their PPP loan forgiven.

WHILE WE KNOW THERE MAY BE FUTURE UPDATES TO THESE GUIDELINES, HERE IS WHAT WE KNOW NOW REGARDING PPP LOAN FORGIVENESS:

• You are eligible for forgiveness eight weeks from the date of disbursement of PPP funds

• To apply for forgiveness, the Borrower must complete the PPP Loan Forgiveness Application and return it to their lender who is servicing the loan

• In an effort to prevent large, public companies from accessing the fund, PPP loans over $2 million will be audited

• The amount of loan forgiveness the Borrower applies for may be subject to reductions

PAYROLL COSTS ELIGIBLE FOR FORGIVENESS

• Payroll costs paid and payroll costs incurred during the eight-week (56-day) covered period

• Payroll costs are considered paid on the day that paychecks are distributed, or the Borrower originates an ACH credit transaction

• Payroll costs are considered incurred on the day that the employee’s pay is earned

(For each individual employee, the total amount of cash compensation eligible for forgiveness may not exceed an annual salary of $100,000, as prorated for the covered period)

NONPAYROLL COSTS ELIGIBLE FOR FORGIVENESS

• Covered Mortgage Obligations: payments of interest on any business mortgage obligation on real or personal property incurred before February 15, 2020

• Covered Rent Obligations: business rent or lease payments pursuant to lease agreements for real or personal property in force before February 15, 2020

• Covered Utility Payments: business payments for a service for the distribution of electricity, gas, water, transportation, telephone, or internet access for which service began before February 15, 2020

(Eligible non-payroll costs cannot exceed 25% of the total forgiveness amount)

Learn About Our Financial Strategy Services Or For Additional Guidance Regarding Your PPP Loan, CONTACT US

Apple started in a garage before taking over the technology industry and redefining how we communicate.

Amazon began as an online book retailer before transforming the online shopping experience.

Uber started as a ride-share service that would forever disrupt the taxi industry and how the world views transportation at large.

These companies share common factors that go far beyond technology alone. Each company has been able to grow a small, no name business into a household brand. And while this pace of growth can seem impossible to replicate, with the right strategy, it is possible to develop, expand and grow your small business into something larger and more significant overtime. Take some time to ask yourself the following questions to begin to establish what a growth plan looks like for your company.

HOW DO YOU DEFINE YOUR VALUE PROPOSITION IN A WAY THAT DIFFERENTIATES YOU FROM OTHERS?

Establishing your value proposition should be done when you first begin your business, but it must be more than words on a page. Staying connected to your value proposition and continuously reinforcing that message to your audience is vital to an effective growth strategy. As you grow, your value proposition must constantly be reevaluated. And that’s because new customers or potential target markets will need to understand who you are, what makes you different from the crowd and why you matter.

WHAT ARE YOUR KEY PERFORMANCE INDICATORS FOR TRACKING GROWTH?

Growth looks different for every business. Your focus must be on defining success for yourself and determining how to track performance overtime. We suggest choosing a few metrics that are defined, measurable and most importantly attainable for your company as you move forward.

By integrating your KPIs into weekly business operations and conversations, they will become more than far reaching goals. But take your KPIs one step further and customize them to various elements of the business. That way, whether an employee is in marketing or in sales, they can understand how their work supports overarching business goals.

ARE YOU ABLE TO EXPAND ON YOUR CURRENT REVENUE STREAMS OR DEVELOP NEW ONES?

Amazon went from selling books to selling everything. Apple went from selling computer hardware to creating watches, phones and music. You may not be a billion (or trillion) dollar company like these industry giants, but you can learn something from their expansion models. New revenue streams are always possible, and new revenue streams are a fundamental factor in building out effective growth strategies.

Those who win at growing their business take an innovative approach to new opportunities —

the opportunities not yet seen by the competition. Evaluate all options for revenue expansion within your market, but don’t limit yourself. New revenue channels can come from entering into new geographical markets, service expansions or building out your product portfolio.

At the end of the day, you need to customize your growth strategy to your business and your market. By integrating these factors into your development strategy, you can create a confident growth plan that leads to results far beyond what you imagine.

Does your firm need a Chief Financial Officer?

It’s time to gain better controls and better insight into the financial health of your business. It’s time to save time and money with data-driven decision making.

That’s where the Thinc Strategy team steps in to help.

Most large companies have a CFO on the payroll, but all firms have needs. Typically, that means periodic expertise and monitoring of the firm’s financial health and performance, rather than a full-time CFO on staff.

Thinc Strategy is the third-party support firms count on for fractional CFO services.

What can you expect?

Total oversight into the financial health of your company and the right kind of assistance for long-term company planning. You can think of Thinc Strategy has a remote CFO, that does not have to be carried on the payroll. With us you will gain:

• Coaching and mentorship of your firm’s internal accounting staff.
• Oversight into the accounting functions of the internal team, ensuring checks and balances, timely data, and quality reporting are accurate and precise.
• Support in the conception and implementation of strategic company plans.
• Facilitation of firm succession planning.
• Cost saving development plans that map, measure and monitor overhead.
• Complete access to key performance indicator metrics and dashboards.
• Cash flow management to ensure best use of firm resources.
• High-level perspectives that see beyond the firm and analyze the total marketplace with objective insight and recommendations for your specific needs.
• Strategies that help drive long-term business development goals.
• Risk management monitoring, along with forecasts and budget allocations.
• Plans, policies and procedures designed to drive your company toward increased profitable and growth

Hiring a fractional CFO is a flexible, cost effective solution. The amount of time you need from our Thinc Strategy team can vary based on your specific business needs. It is the smart way to gain access to the expertise you need while controlling the cost of service.

With more than 30 years of experience in the architecture, engineering and construction industries, we have seen the measurable results from hundreds of companies that have trusted their financial oversight to a fractional CFO.

Your firm deserves to experience those same results from a team that can provide trusted, insightful and analytically-driven financial support with results you can count on.

Entrepreneurship was never meant to be an easy game. The path for creating and starting your own business can be a tricky move—and always a risky one. So, how do you withstand the difficulties and uncertainty entrepreneurship can bring?  

Believe in your vision

When it comes to going into business for yourself, you must be fully committed to the vision that you have for your business. Whether you are in the infancy stages of your business, or further along in the process, you have to believe that your ideas are valuable.

It sounds cliche, but if you don’t believe in your future success, then you won’t be able to convince your team, your investors or your customers. When obstacles and issues arise, you’ll need to be able to quickly dodge them and not stay bruised for too long. Believing in your original vision, what got you started in the first place, is essential to withstanding the pressures entrepreneurship innately brings.

Have valuable contacts

The value of networking and relationship building cannot be understated. Whether it’s networking with other entrepreneurs or having a mentor to guide and give advice, relationships matter. Those contacts are important at any stage in business, but when it comes to growing your business, having a solid bench of contacts helps you get ahead of the game.

In the midst of building a business, finding time to establish relationships can feel daunting, but it’s important. Creating the right relationships and contacts is key to making future connections in your field, for increasing investments and funds, and for having the right people to rely on for advice.

Never stop planning

Business planning isn’t something that has to be taught to entrepreneurs in the early seasons of business. When you are building a brand and striving to reach profitability, planning is a constant. But what happens to the planning element of business when profitability is achieved and growth seems to steadily increase?

The planning phase of business shouldn’t ever be a phase. Entrepreneurs must always be thinking about and planning for worst-case scenarios. The best entrepreneurs build teams to keep their organizations running and spend their time evaluating the market, analyzing competitors and finding new ways to differentiate themselves.

Remain confident

Leading a business is difficult, and the unexpected challenges in the market and in your workforce can feel exhausting. The key is to maintain confidence in yourself and your employees, even in those moments of difficulty. Remind yourself that are able to withstand challenges, to keep your business afloat and to succeed.

The number one challenge we hear from clients most often, isn’t about financial modelling, growth strategies or cash flow; it’s about leading people well. Each individual employee brings their own strengths and complexities to the table. The natural intricacies of human beings, makes leadership challenging and requires purposeful care to do it well. Overlooking its importance can be a costly mistake.

What are the pain points that consistently bubble to the surface when it comes to effective people management? It all ties back to three things:

  1. The challenges of managing people and getting them to take ownership and accountability in their role.
  2. The difficulty in maintaining an employee base that consistently stays self-motivated to take charge and work independently.
  3. The frustrations that come from employees who are not proactive, who don’t take pride in their work and who don’t self-evaluate how they can improve, or do things better.

Those are difficult hurdles to overcome and can’t be taken on lightly. As the leader of your business, you have a lot on the line, and you’ve put a lot of sweat into getting to where you are right now. The reality is, your employees don’t innately have that same level of personal attachment or deep-rooted investment in the business. They just don’t, but that doesn’t mean that you can’t find the right people, with the right traits and the right talent. The right people will align with your goals and will find a rewarding career within your company.

So, how exactly do you make it happen? Well, it comes down to understanding your non-negotiable company values. The process might seem daunting, but it’s not as complex as you might think, and getting it right will save you in the end.

Start by identifying all the values you deem important for your workplace and for this specific role. If you are in finance, trust and honesty would be obvious, fundamental values. If you’re running a design business, then curiosity and creativity will likely rise to the top.

The best way to tap into what’s important in your company is to think about what’s important to you individually. Write down those descriptors and then step away to look at the collective list. What you’ll soon find is that there will be a common thread between the various adjectives you have outlined. Seeing that collective list will help you can begin to merge and condense the descriptors down. Typically, what started out as a massive, laundry-list of values, gets boiled down to a few non-negotiable values that you hold as priorities. Use that list, evaluate it, really dig it apart, and then ask yourself which are the few that you are unwilling to waiver on.

If you can define your company values and the specific values that are non-negotiable, you will have an easier time identifying the right people for your business. But don’t just apply these values in your onboarding process. Put in the work to embed your values into your company culture. Here are some tips to get you started:

  • Communicate the values to everyone in the organization – not just the words, but what they mean to you and why they have helped you as a professional.
  • Integrate the values into the employee review process, but don’t stop there. Use your company values in everyday situations to encourage successful outcomes.
  • Create signage around your office building that keep your values top of mind among employees.
  • Reward people who are exhibiting those values with praise and recognition. Explain what they did and how their efforts improve the business and their career.
  • When an employee is not exhibiting those values, tell them. Give them clear examples of what is missing and advice on how they could tweak what they are doing. For example, showing them that when you follow up with clients within a certain timeframe, the client feels important and is more likely to work with you.

When employees understand the values of the company, they also understand the expectations and how success will be measured.

Start Your Journey With Thinc Today.

How to Design Company Values That Last
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Acquisition Project Management

Our clearly defined process includes expertise in the areas of management, research, market search, analytics, and reporting
Project Manager
Set up playbook
Research
Set up data room
Campaigns
Campaign Follow-up
pm-step-arrows-wide
Initial Criteria Match/Viability Meeting
NDA Signed, PM Onboarding
Growth Team continues search
Project handoff to PM
Prospect and Process Discussion
Financial modeling and valuation
pm-step-arrows-wide
Advisor to client
Meeting coordination and facilitation
Deal structure recommendations
Due diligence process
Pre-close legal coordination and support
Post-close integration

Acquisition Project Management

Our clearly defined process includes expertise in the areas of management, research, market search, analytics, and reporting

Project Manager
Set up playbook
Research
Set up data room
Campaigns
Campaign Follow-up
pm-step-arrows-wide
Initial Criteria Match/Viability Meeting
NDA Signed, PM Onboarding
Growth Team continues search
Project handoff to PM
Prospect and Process Discussion
Financial modeling and valuation
pm-step-arrows-wide
Advisor to client
Meeting coordination and facilitation
Deal structure recommendations
Due diligence process
Pre-close legal coordination and support
Post-close integration

Evaluate the merits of any business idea

Thinc specializes in conducting comprehensive feasibility studies to evaluate the viability, risks, and rewards of new business initiatives, ensuring informed decision-making and strategic planning for success.
Thinc will conduct individual interviews with key stakeholders to gain an understanding of their ownership goals and future objectives.

Thinc will review a variety of materials from the firm including, but not limited to, the past 3-5 years of financial statements, organization chart, key roles, and other relevant materials.

Thinc will meet with the owners to confirm the direction gleaned from our initial interviews and information analysis. We will use this meeting to refine the direction and inputs for the different models.

Thinc will build out the different options using the provided inputs showing the potential outcomes and implications for each model.

Thinc will present the feasibility study, documenting the various options and models. We will also schedule a follow-up conversation, allowing the owners time for reflection on the study, to answer questions and discuss next steps.

Due Diligence Services

Our Due Diligence services offer a detailed examination of the target company, providing critical insights into risks, opportunities, and financial health to support informed business decisions and successful transactions.

Contracts

Contracts

Ownership Structure
Government Documents
Legal Filings
Client Contracts
Leased Properties

Finance, Tax, Insurance

Financial Statements
Tax Returns
Payroll
Managed Reports

IT & Fixed Assets

Software
Hardware
Furniture
Vehicles

Marketing

Customer Segments
Market Segments

Organization

Current Salaries
Benefits & Bonuses
Hiring & Firing Practices
Employee Engagement

Due Diligence Services

Our Due Diligence services offer a detailed examination of the target company, providing critical insights into risks, opportunities, and financial health to support informed business decisions and successful transactions.

Ownership Structure
Government Documents
Legal Filings
Client Contracts
Leased Properties
Financial Statements
Tax Returns
Payroll
Managed Reports
Software
Hardware
Furniture
Vehicles
Customer Segments
Market Segments
Current Salaries
Benefits & Bonuses
Hiring & Firing Practices
Employee Engagement

Due Diligence Services

Our Due Diligence services offer a detailed examination of the target company, providing critical insights into risks, opportunities, and financial health to support informed business decisions and successful transactions.

Ownership Structure
Government Documents
Legal Filings
Client Contracts
Leased Properties
Financial Statements
Tax Returns
Payroll
Managed Reports
Software
Hardware
Furniture
Vehicles
Customer Segments
Market Segments
Current Salaries
Benefits & Bonuses
Hiring & Firing Practices
Employee Engagement

Evaluate the merits of any business idea

Thinc specializes in conducting comprehensive feasibility studies to evaluate the viability, risks, and rewards of new business initiatives, ensuring informed decision-making and strategic planning for success.
Thinc will conduct individual interviews with key stakeholders to gain an understanding of their ownership goals and future objectives.

Thinc will review a variety of materials from the firm including, but not limited to, the past 3-5 years of financial statements, organization chart, key roles, and other relevant materials.

Thinc will meet with the owners to confirm the direction gleaned from our initial interviews and information analysis. We will use this meeting to refine the direction and inputs for the different models.

Thinc will build out the different options using the provided inputs showing the potential outcomes and implications for each model.

Thinc will present the feasibility study, documenting the various options and models. We will also schedule a follow-up conversation, allowing the owners time for reflection on the study, to answer questions and discuss next steps.

Start Your Journey With Thinc Today.

How to Design Company Values That Last
TSI_logo-color

How to Design Company Values That Last