If you have ever traveled on the subway in London or the train system in England, I am sure you have heard the phrase “Mind the Gap” numerous times.
“Mind the Gap” is the British version of the American admonishment “Watch Your Step.” The wording of the English warning was created in the late 1960s for the London subway system. The phrase alerted riders to be aware of the space between the platform and the train cars. This phrase is utilized almost ubiquitously around the world.
For me, as someone who has sold his own business, it has an additional and different, yet profound, meaning.
Business Valuation Gap: Buyer vs Seller
As I was negotiating the transaction price for my business, it became obvious that my personal valuation of the business was considerably more than that of the prospective buyer.
As the business owner, this was the true gap that needed to be managed. It is the same gap that transaction advisors (professionals within M&A, private equity, investment banks, etc.) see regularly in the buying and selling of client businesses.
Sometime later I repurchased my company and used the learnings from my selling experience to negotiate a much better deal. (By the way, that in itself is a good story to share over a cup of coffee.)
As Sister Barbara Thompson wrote in “Daughters in My Kingdom: The History and Work of Relief Society”:
“Many of us have gaps in our own lives. Sometimes it is the difference between what we know and what we actually do or the gap between our goals and what we actually accomplish. These gaps can be reminders of ways in which we can improve or, if ignored, can be stumbling blocks in our lives.”
A Tool to Mind the Gap in Manufacturing
How we “mind” the gaps in our business lives and in our personal lives can have a huge impact on our wherewithal in the future and how well we sleep at night. (A part of my “coffee” story.)
At High Value Manufacturing we have the experience to help manufacturing business owners and their transaction advisors “manage” through this process and to ensure the gaps are reduced to an acceptable level. Our team respects the confidential nature of performance improvement concerns and business ownership decisions.
HVM has developed the QUICK VALUE TOOL (QVT) as a means to provide assistance to small to medium manufacturing companies that want to perform better. This tool is designed as a rapid-response, laser-focused, and truly impactful way to enhance operations, address critical issues across your organization, and close the gap between the valuation and real value of your manufacturing business.
HVM assessors implement QVT protocols on the plant floor without drawing attention from other employees – with similar attire, friendly interactions, and commitment to confidentiality. Risk of negative valuation bias from operational assessment is minimized, regardless of whether the owner’s intentions to sell are known, suspected, or undisclosed.
From a broad perspective, the QVT allows us to zero in on specific, clearly identified-and-understood problems that, when resolved, will quickly create momentum, yielding net improvement, maximum value, and bottom-line results.
Maximizing Success for All Stakeholders
If you are looking to improve the value of your manufacturing company prior to a transaction, let HVM’s experienced manufacturing professionals help you to mind the gap by creating a detailed performance improvement plan for a more successful sale. Not looking to sell but still want to improve, we can help there also. Together we can drive manufacturing costs lower, increase both quality and throughput, and maximize your bottom-line profitability.
At High Value Manufacturing we realize manufacturing facilities today struggle with a number of planning, operational, and resource challenges. As a world class manufacturing consulting firm, our goal is to help our clients assess current manufacturing issues, plan for future needs, provide concrete recommendations, and provide the skilled resources required for strong problem-solving capability.