Subjective Considerations

Blue Sky Business Resources is unique among advisory firms in that we believe that business culture, values, and passion are an essential part of a business valuation. We believe that without evaluating the human components of a business, we are not seeing the whole picture of the investment potential represented by that business. Because of this belief, Blue Sky has developed a holistic approach to the entire Mergers and Acquisitions process.

The deep front-end analysis that is at the heart of this approach affords us an understanding of what the market will think about a business opportunity while simultaneously considering what is best for the business owners. We bring with us a team of experienced consultants.  We perform exhaustive financial analysis and a deep dive into many other pertinent aspects of the business including cultural profiles, HR analysis, management succession plans and comparative industry benchmarking scores.

With all this in mind, I return to the unique valuation which sets us apart. Prudent buyers should contemplate: culture, values and passion.

Culture – 1.  the set of shared attitudes, values, goals, and practices that characterizes an institution or organization.  2.  the set of values, conventions, or social practices associated with a particular field, activity, or societal characteristic.  3.  the customary beliefs, social forms, and material traits of a racial, religious, or social group.

The business’s culture will play a vital role in the acceptance of new ownership. Buyers tend to focus on the financial aspects of the business and pay little attention to the culture. Blue Sky makes sure this does not happen.

We ask: What is the culture of the place?  Is it an authoritarian run business?  Is it an inclusive business?  Do the employees have a voice in company decisions?  Does the business have a profit-sharing program or ESOP (employee stock ownership program)?  A sound understanding of the culture will enable new ownership to establish a transition plan that will be inclusive and provide the best possible outcomes for the employees, business and new owners. It is also another tool we can use to ensure that a buyer is a good fit for the business before bringing them to the negotiation table.

Dr. David Gruder, a certified organizational psychologist on our team, works with our clients and helps us create sound cultural profiles for each client that provides answers to these and a myriad of other questions.  Dr. Gruder’s extensive experience building and implementing successful acquisition integration programs will be used for the business’ unique cultural needs.

Values – 1.  Monetary or material worth.  2.  Worth in usefulness or importance to the possessor; utility or merit.  3.  A principle or standard, as of behavior, that is considered important or desirable.  4.  To regard highly; esteem: I value your advice.

We Ask: What are the owner’s values?  How do you assess their values?  Are they telling the truth? These questions are always swimming around in the back of the mind of savvy business buyers. Knowing the answers can save considerable time and money. It can also avoid a potentially disastrous investment decision. We have been through thousands of site visits and client calls, and watched as buyers ask the same questions in different ways looking for inconsistencies in the answers. Sellers do the same thing.

Actions speak louder than words and both parties want to make sure the words match the actions.    Blue Sky works diligently to answer the values questions in our cultural profiles.

Passion – 1.  A strong affection or enthusiasm for an object, concept, etc.  2.  The object of an intense desire, ardent affection, or enthusiasm.  3.  Any strongly felt emotion, such as love, hate, envy, etc.

Of the three considerations this is the most important. Are the managers and employees passionate about the business? Can they clearly articulate the goals and objectives of the business? What is the customer / client satisfaction levels? How is employee morale? A passionate driven company should be consistently knocking these and all other metrics of the business out of the park.

In summary, we talked about three elements of a business that buyers should invest time and resources in to better understand the business.  We believe that a thorough analysis of these elements will enable buyers to make better decisions and build a comprehensive continuation or growth plan for the business.  The financial health of the business is critical to the future success of the endeavor, but I submit that without greater utilization of the human components of a business it is destined for failure post acquisition.