Take steps toward growth
Even when your company isn’t necessarily in growth mode, you can still take steps to position the business for growth so that when the right opportunity comes along, you will be able to capitalize on it.
Maintaining financial flexibility and employee confidence was integral to ACTS’ recent expansion with Peninsula United Methodist Homes, in which the company formed an affiliation with another retirement community management company, bringing four new communities under the ACTS umbrella and allowing ACTS to expand into Delaware and Maryland in the process.
“It started out with this other organization that was smaller and had a problem and came to us asking if we’d be interested in helping them. As we looked into the issue of developing a new community, that specific issue didn’t attract us,” Mashner says. “We didn’t think it was workable. But as the talks [with Peninsula] progressed, we started to talk about affiliating with the entire group.
“That led to significant discussions, and as a result, these four communities came into our family. So our overall size grew, and we achieved additional volume efficiencies that benefitted our ability to acquire supplies for ourselves and the organization that we were affiliating with.”
To position yourself to make the most of what growth opportunities do come your way in a slow economy, you need to have a thorough understanding of what your business does and what you want your business to be moving forward.
At ACTS, Mashner and his leadership team sat down and defined how they wanted the business to grow and, by extension, what made for a good growth opportunity.
“You need to understand your organization and what the philosophy is,” Mashner says. “We were financially sound, with revenues over $300 million and assets now in excess of $1 billion. But we said that if we had an affiliation opportunity, we’d formalize a set of criteria that the opportunity would need to provide to us if we were going to move on it. For instance, it had to be located in a contiguous geographic area to our existing footprint. Most importantly, it had to be a community with a similar mission and purpose to ours.
“That is how you find opportunities that are going to strengthen the organization. You want to make sure that whatever action you take will benefit not just your organization but the new affiliate.”
To know what you are as an organization, you need to build a management team that has a great deal of experience with your organization — a team that can identify what it is you do well as a business and identify growth opportunities that can help you leverage and strengthen that position.
Once you have formed the right management team, you need to have an ongoing dialogue over how to position the company for growth. You need to come to a consensus on what criteria are the most important on which to base decisions and perform due diligence as a team when an opportunity presents itself.
“Knowing the philosophy of the organization is the first step, and that comes back to having a management team that is familiar with the organization, who have been with the organization for a period of time, who share and endorse the mission,” Mashner says. “Then you talk about what opportunities are presented and the criteria you want to emphasize. That is where you look at anything that is presented and whether it fits with your overall corporate mission. Does it fit geographically? Can you define what the effect will be on your financial operations? Ultimately, you need to be able to evaluate any growth opportunity in that way.”
