Strategic Planning Skill Sets

  • Implementation of Strategic Planning Process and Training
  • Macro Trends Analysis
  • Strategic Market Opportunity Growth Analysis
  • Competitive Analysis and Market Planning
  • SWOTs Analysis
  • Market Segmentation
  • Market Research (Qualitative/Quantitative)
  • Customer Experience and Loyalty Measurement and Modeling
  • Key Resource Evaluation and Analysis
  • Infrastructure Growth Planning
  • Planning Major Programs and Initiatives Supporting Strategic Goals
  • Development of Support Systems for Strategic Plan
  • Operational Effectiveness & Process Improvement Planning
  • Financial/Budget Modeling to Support Strategic Plan
  • Strategic Alignment Reviews
  • Cultural assessment & Change Management Planning
  • Adaptive Change Management Processes

Preparing to Sell Your Business

Exit Planning and Business Planning is Key

Currently, 80% of business owners of small and middle market companies who put their businesses up for sale never close the transaction. The reasons: (1) poor preparation; and, (2) over valuation.

With the impending Baby Boomer tsunami, more businesses will be for sale than at any other point in history creating a buyer’s market. This buyers’ market will cause significant downward pressures. Business owners who do not prepare well or over value their companies will be left out in the cold.

Many strategic and financial buyers with significant funds to invest are more cautious and reluctant to pay premiums for companies than a few years ago. Owners should take these three steps to significantly increase their chances of selling their businesses on favorable terms.

  1. Think like a “buyer.” Most buyers want to purchase a company with the following characteristics.
  • A proven entrepreneurial management team in place that can continue rapid growth and expansion after the transaction closes. Most buyers do not want to replace current management of the company they buy.
  • A strong, realistic strategic business plan to continue value creation through market penetration and expansion.
  • An ability to produce significant returns on invested capital coupled with strong positive cash flows.
  • A sustainable competitive advantage.
  1. Prepare before you go after a buyer. Attracting a buyer is like preparing for a beauty contest. Companies that “show best” win “first”. It takes 6 to 18 months to prepare your company for the market place. Strong preparation could mean a much higher “selling price. Strong preparation steps include:
  • Quantify the business value through a third party valuation firm.
  • Shed obsolete inventory. If your financial records show a higher value than market value, take the write off now so that it doesn’t become an issue for the buyer.
  • Have an independent audit firm audit your financial records.
  • Strengthen legal and contractual affairs.
  • Install and improve operating systems and processes.
  • Tell your management team (confidentially) that you plan to sell the company. Be truthful. Include them in the preparation process.
  • Create management and key employee long term retention incentive plans.
  • Prepare for buyer due diligence. If you were buying your company, what would you drill down on first, second and so on? Conduct your own due diligence. It allows you to correct potential concerns or to put the best possible explanation forward to the potential buyer.
  1. Select the right deal team to help prepare you to go to market and complete the transaction.
Obtaining professional advice, on alternative exit strategies, tax issues, alternative deal structures and negotiations is critical. A strong deal team will more than pay for itself, and includes,  
  • A management consulting firm with strong business strategy and transaction experience to lead the sell-side transaction process and prepare you for the buyer’s due diligence process..
  • A law firm with significant transaction experience.
  • An investment banking firm with deep transaction experience in your industry.
  • A corporate accounting firm to guide you through the corporate tax issues.
  • An accounting firm to counsel you in personal tax issues.
  • A wealth management firm to help you plan wealth preservation and analyze both estate and income tax saving strategies.
  Prepare a Solid Strategic Business Plan for a Successful M&A Transaction

Profitable growth is a fundamental driver of shareholder value. Developing effective business strategies that reliably meet or exceed the market's expectations for growth is the key to delivering superior long-term shareholder returns. We believe that there are four phases to successful strategic planning process:

  1. Building the foundation for value creation strategies;
  2. Implementing strategic planning processes;
  3. Developing strategy support systems; and
  4. Aligning the organization via strategic programming.

Senior management commitment and adequate planning resources are hallmarks of all the top organizations. We cannot emphasize enough that these are essential pre-requisites for an effective strategic planning process. To build the kind of foundation that drives a successful, high-performance culture toward its strategic goals, top-performing companies have introduced the following initiatives:

  • They establish explicit shareholder value goals to create appropriate strategic tension.
  • To monitor performance against these goals, they define key performance indicators across the business so that shareholder value concepts become meaningful at the operating level.
  • They reward only superior performance at all levels.
  • They generate internal demand for market intelligence as a way to test long-held beliefs or close gaps in management's understanding of the business.
  • They invest in management's capabilities to help the broadest group of managers think like strategists
  • They make management's efforts very visible.

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The best strategists have more than one model in their arsenal and reach for the best one to suit the occasion. The outcome of a strategic performance review (evaluating if a business unit is "on strategy") and an environmental scan (evaluating if major threats or unanticipated opportunities exist) would determine whether an intensive, comprehensive strategy work-up is immediately required or whether a less comprehensive approach that mainly addresses specific issues is applied in a particular planning cycle. If a business is "off strategy" and major unanticipated threats or opportunities exist, the former is completed. Otherwise, a less comprehensive issue driven strategic planning workup is used to resolve issues and achieve organizational alignment. Here is a closer view of two planning models we found to include the best elements of external intelligence, well-designed options, and risk management.

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Corporate Planning

Corporate planning is one of the areas where senior executives can make the most impact, by providing resources and setting direction in addition to helping create a strong planning culture. At its best, corporate planning is used to conduct corporate-level planning, facilitate SBU level planning, and aligns business function plans. Corporate planning is in a unique position to increase the value of cross-business synergies and align SBU planning efforts and business function plans with corporate objectives. It can also enhance the business skills and tools of all levels of planners to improve operational planning.

  • Coordinate the data collection efforts to support the corporate level environmental assessment
  • Ensure the consistency of inputs from business functions and units, including consistent context and assumptions
  • Conduct or contract for external research and interviews
  • Synthesize internal and external inputs into business assessments
  • Manage corporate level planning of strategic issues and options with cross-business synergies that may be over looked by managers focused on the performance of their own business unit
  • Facilitate SBU level planning activities, including scenario planning at the business unit level, and integrate business functions through meetings and consultative support

Corporate planning is most effective when it is seen as an SBU advocate. For instance, pressure testing SBU plans should be seen as a benefit to the SBU head, not part of corporate-level validation.

Analytical Tools

GEM Strategy Management uses a number of tools and frameworks throughout the strategic planning process to achieve optimal results. Tools used to identify key strategic issues include external customer research, competitive benchmarking, technology evolution mapping, market segmentation, and scenario analysis.

To help shorten planning cycles, GEM Strategy Management uses the latest analytic tools and technology to speed up and support the planning process. We use sophisticated analytic techniques including structural equation modeling and build predictive modeling simulators, use artificial intelligence and neural networks to validate which among several strategies will be the most effective in the market place – shortening the planning process considerably. Simulators can be built for individual managers so they can measure their individual or business unit performance instantly and continuously.

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Organizational alignment can be a powerful tool for changing behavior and achieving sought after performance. While most would agree that managers want to "do the right thing," misalignment prevents optimal performance by diffusing focus and undermining process credibility.

Assuming an effective communication plan is in place, strategic programming should include three elements:

  1. Approving a strategic initiative should be viewed as the management team agreeing to a two-way performance contract. That is, resource commitments will be met by the company as long as results are on track. The execution of the business strategy should be generously rewarded, while the failure to deliver contracted results should have real consequences to the responsible group.
  2. Performance and resource contracts should identify key action steps, milestones, accountabilities and multi-year performance goals. Be specific.
  3. Making a direct link between strategic initiative milestones and incentives ensures realistic performance targets and spurs successful execution. Programs for organizational alignment are too often seen as an afterthought, or as being outside the scope of strategy work. Yet, for the top performing organizations we studied, this programming was an essential phase of the strategic planning process.

GEM Strategy Management is prepared to help you create a robust, dynamic and successful strategic planning process that can provide for sustainable competitive advantage, more rapid growth and improvement in shareholder value and provide increased leverage with a potential buyer. Call us so that we can listen and better understand your goals and help you design a process that works for you.


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Exit Strategies

In order to attract an investor for your business, (whether it is growth capital or a sale), it is important to plan and prepare from 12 to 24 months (and sometimes longer) ahead of going to the investor market place. There are four “Knows” that are critical to the success of attracting investors.
  1. Know your Industry
  2. Know your Company
  3. Know your People
  4. Know to Plan and Prepare for the Investor
In the last two years, the “buyers” market has become much more robust due to two major drivers. The stock market has been robust enriching buyers’ networths and buyers are looking to accelerate their growth through acquisitions. Buyers typically fall into two general categories.
  1. Strategic
  2. Financial
You need to prepare for both. Each will have a different focus and therefore will affect the deal structure. Depending on the investor, there are a number of exit plans to consider. Regardless, when preparing to execute an exit strategy, careful planning is critical to ensure, that the transaction and post-transaction go smoothly. Planning for the transaction takes in four broad areas.
  1. Valuation of the Business
  2. Audited Financial Statements and Realistic Projections
  3. Tax and Legal Considerations and Analysis
  4. Wealth Management Planning.

In addition to our network of senior consultants, we partner with some of the leading law firms, accounting firms, investment banking firms and wealth planning firms in the U.S. We select the right firm (s), form a team that has the subject matter expertise and depth of experience needed to provide our privately held clients with the most up-to-date expert advice when preparing and executing an “Exit Strategy”


Many privately held company owners and shareholders believe that an IPO is their best avenue for value creation and an exit strategy for themselves. And in some cases they may be right.

So why do so many private companies want go public?

Going public can raise lots of cash. Being publicly traded also opens many financial doors:

  • Because of the increased scrutiny, public companies can usually get better rates when they issue debt.
  • As long as there is market demand, a public company can always issue more stock. Thus, mergers and acquisitions are easier to do because stock can be issued as part of the deal.
  • Trading in the open markets means liquidity. This makes it possible to implement things like employee stock ownership plans, which help to attract top talent.
  • Being on a major stock exchange carries a considerable amount of prestige.
  • It is one of the best avenues for issuing a secondary offering.

In the past, only private companies with strong fundamentals could qualify for an IPO and it wasn't easy to get listed. The internet boom changed all this.

Firms no longer needed strong financials and a solid history to go public. Instead, IPOs were done by smaller startups seeking to expand their businesses. There's nothing wrong with wanting to expand, but most of these firms had never made a profit and didn't plan on being profitable any time soon. Founded on venture capital funding, they spent like Texans trying to generate enough excitement to make it to the market before burning through all their cash. In cases like this, companies might be suspected of doing an IPO just to make the founders rich. This is known as an exit strategy, implying that there's no desire to stick around and create value for shareholders. The IPO then becomes the end of the road rather than the beginning.

There are other opportunities for creating value including Spin-Offs, Spit-Offs, Carve-Out IPOs Equity Carve-Out and Tracking Stocks.

As you can see there are many Value Creation Strategies that can be used to reach your valuation goals. We can help you evaluate which of the Value Creation Strategies is right for you.


  • Merger
  • Management Buy-out with cash and/or an earn out
  • Sell to private equity firm or investment banking firm
  • Buyout by partner in business
  • ESOP
  • Franchise the business
  • Transition the business to another family member
  • Majority and Minority Recapitalizations


This strategy can create significant value to the shareholders in the following ways:

  • Increased Valuation: Typically publicly traded companies enjoy substantially higher valuations than private companies.
  • Capital Formation: Raising capital is usually easier because of the added liquidity for the investors, and it often takes less time and expense to complete an offering.
  • Acquisitions: Making acquisitions with public stock is often easier and less expensive.
  • Incentives: Stock options or stock incentives can be useful in attracting management and retaining valuable employees.
  • Financial Planning: Public company stock is often easier to use in estate planning for the principals. Public stock can provide a long term exit strategy for the founders.
  • Reduced Costs: The costs are significantly less than the costs required for an initial public offering.
  • Reduced Time: The time frame requisite to securing public listing is considerably less than that for an IPO.
  • Reduced Risk: Additional risk is involved in an IPO in that the IPO may be withdrawn due to an unstable market condition even after most of the up-front costs have been expended.
  • Reduced Management Time: Traditional IPOs generally require greater attention from senior management.
  • Reduced Business Requirements: While an IPO requires a relatively long and stable earnings history, the lack of an earnings history does not normally keep a privately held company from completing a reverse merger.
  • Reduced Dilution: There is less dilution of ownership control, compared to a traditional IPO.
  • Reduced Underwriter Requirements: No underwriter is needed: (a significant factor to consider given the difficulty companies face in attracting an investment banking firm to commit to an offering.)
  • Let it run dry:This can work especially well in small businesses like sole proprietorships. In the years before you plan to exit, increase your personal salary and pay yourself bonuses. Make sure you are on track to settle any remaining debt, and then you can simply close the doors and liquidate any remaining assets. With the larger income, naturally, comes a larger tax liability.
  • Sell your shares:This works particularly well in partnerships such as law and medical practices. When you are ready to retire, you can sell your equity to the existing partners, or to a new employee who is eligible for partnership. This can be structured on an "earn-out" basis for a three to 10 year period. You leave the firm cleanly, plus you gain the earnings from the sale.
  • Liquidate:Sell everything at market value and use the revenue to pay off any remaining debt. This is a simple approach, but also likely to reap the least revenue. Since you are simply matching your assets with buyers, you probably will be eager to sell and therefore at a disadvantage when negotiating.
  • Go public:The dot-com boom and bust reminded everyone of the potential hazards of the stock market. While you may be sitting on the next Google, IPOs take much time to prepare and can cost anywhere from several hundred thousand to several million dollars, depending on the exchange and the size of the offering. However, the costs can often be covered by intermediate funding rounds.
  • Merge:Sometimes, two businesses can create more value as one company. If you believe such an opportunity exists for your firm, then a merger may be your ticket to exit. If you're looking to leave entirely, then the merger would likely call for the head of the other involved company to stay on. If you don't want to relinquish all involvement, consider staying on in an advisory role.
  • Be acquired:Other companies might want to acquire your business and keep its value for themselves. Make sure the offered sale price meshes with your business valuation. You may even seek to cultivate potential acquirers by courting companies you think would benefit from such a deal. If you choose your acquirer wisely, the value of your business can far exceed what you might otherwise earn in a sale.
  • Sell:Selling outright can also allow for an easy exit. If you wish, you can take the money from the sale and sever yourself from the company. You may also negotiate for equity in the buying company, allowing you to earn dividends afterwards — it clearly is in your interest to ensure your firm is a good fit for the buyer and therefore more likely to prosper.