Riverside is in the business of investing in small to mid-sized businesses and helping them thrive. When we succeed, our companies really sparkle — in fact, SPARCLE (yes in our case, with a “C”) is an acronym for us. It spells out a checklist of important attributes that we have found, when happening all together, lead to an optimal valuation.
Business owners of all types can benefit from considering the SPARCLE combination, which can be looked at as a recipe for continuous improvement: focusing on details, carefully analyzing all aspects of your operations and diligently addressing challenges and opportunity.
Putting on the polish
Here are some steps you can take to make your company shine:
■ Scrubbed and clean. Every business has flaws; have an honest internal assessment and identify, address and eliminate the problems and weaknesses in your organization.
■ Powerful management team. Great companies need great leaders who understand their industry, and they need to be backed by a deep bench of managers.
■ Attractive facilities. A bucket of paint can do wonders. New lighting, too. Clean up messes — both in the office and on the shop floor. Taking pride in your surroundings matters both to your clients and to your employees.
■ Rising revenue with favorable margins. Focus on what you can do to build strong and expanding margins. This is the lifeblood of any company.
■ Clearly articulated value proposition and growth plan. After the people, this is the most important attribute. Know what makes your company irreplaceable to customers, be able to explain it clearly and specifically, and always keep an eye on the future —how will the company continue to grow?
■ Lots of data readily available. Use graphs and charts and dashboards to illustrate your successes and challenges. By slicing and dicing sales and profits by product, geography and customers, you can pinpoint what’s working — you’ll know where to focus your efforts for more profit and where to cut your losses. This is where a strong CFO, a robust management information system and years of preparatory work really pay off.
■ Excellent preparation. A professionally prepared and coached presentation to prospective customers really resonates, particularly when it’s well-organized with clear messaging and effective use of examples, props and anecdotes.
Sparkling success
All of Riverside’s success stories involve companies that sparkled when we concluded our partnership with them. These attributes will make your company more attractive to outside investors or buyers. While even in the absence of such objectives, these are all steps that even the smallest of businesses can take to boost their results at any time.
Whether you’re looking to continue to run your company at its highest level, or preparing to sell your whole company, making it sparkle will serve you well. ●
Cheryl Strom is associate director of origination at The Riverside Co.
