Building Value in Your Company

Strategies to Build Business Value

After completing hundreds of transactions during the past 25 years, we have a deep knowledge and appreciation of the key elements that all types of buyers look for in assessing the value for your company and determining its suitability as an acquisition or merger candidate.

We will conduct a detailed analysis of your company including its organization, human resources, products and services, markets and competition, facilities and equipment, and an analysis of its financial condition. Upon completion of the review, we will provide you with a detailed road map to strategically increase the value of your company.

Generally, there are many ways to increase the value of your company, some requiring more time than others. In the short term, you can add value to your company by focusing on the following key areas:

• Make cosmetic facility improvements
• Remove obsolete assets
• Remove excess or discretionary expenses and non-operating activities from the financial statements.
• Prepare audited or reviewed financial statements
• Pay down or remove long-term debt
• Increase the company's net income
• Remove personal guarantees from company obligations
• Settle any existing litigation
• Obtain options to extend facility leases
• Perform an environmental facility review
• Prepare or update the organization chart
• Lessen the percentage of customer concentration in your top ten customers
• Increase and document procedural processes (E-Myth Principle)

Over the long term, one to five years, we can assist you in building value in your business by focusing on the results of our analysis and addressing those critical areas which tend to impose the greatest downward pressure on the value of your company. Generally, we will focus on the following critical areas to improve long term value:

Marketing: Perception is reality and that begins with marketing. We can assist you with tuning up and executing your marketing plan including advertising, branding, positioning, sales, product development/service development, and completion.

Financial Management: A critical area of focus for buyers and one of the first areas to be reviewed. We can help develop and install the financial and accounting controls along with the reporting processes so the company's success can be documented.

Financial Performance: Every company has unique opportunities and capabilities for profitability that can be overlooked by management. We are able to provide finance, planning, capital investment planning, cash flow analysis, and financial projections. We can assist you in determining and further developing the key profit centers to improve the profitability of your company.

Operational Management: We can assist with appropriate changes to administration, resource planning, process optimization, quality improvement, infrastructure, technology updates, supply chain management, distribution, logistics, and outsourcing.

Human Resource Management: This is one of the most important areas of focus for buyers. When buyers review a business as a merger or acquisition candidate, they pay particular attention to the strength of the company's human capital including the management team as well as the rank and file employees. They look for committed management and employees who continue to focus on and embrace the company's long-term success. Paragon will help identify and develop plans to retain the company's most important managers and employees. Our objective is to align employees' objectives with the company's and to motivate your team to stay committed to the long-term success of the business. We can assist with the development of performance based incentive programs as a retention tool for your management team. Finally, we can review health insurance, retirement, and other employee programs and provide recommendations to further "lock-in" key employees. The selling, merging, or divesting of a company without key employee's involvement and commitment to stay and grow the business can substantially reduce the value of the company.

Strategic Equity Partners: One of the most effective ways to build your company's value is by making strategic acquisitions of competitors or other vertically or horizontally related companies. The acquisition process enables your company to build value by acquiring competitors, by growing your market share, by adding new or complementary products and services, by expanding territories, by adding new and complimentary facilities, by acquiring seasoned industry personnel and by increasing revenues and profitability, just to name a few. We can assist you with developing and executing your acquisition criteria so that you can build your company's value by making strategic acquisitions.

Building company value can be both a short term and long term process, each with its own set of parameters. After twenty years of executing complex M&A transactions, the Paragon principals have a keen sense of the specific elements that buyers focus on in determining the value and suitability of a target company, and we are experts as assisting you in developing and maximizing that value.