After 15 years of running their niche consulting firm, one of the two co-founders unexpectedly passed away in the middle of pursuing the sale of the company. The remaining owner was forced to face some harsh realities, rethink everything, and find a different path forward as he was ready to sell.
By asking the right questions and listening carefully to the answers, Kevin helped this business owner gain clarity around his priorities, recognize the real obstacles to a successful sale, and find innovative solutions to overcome them.
Although the owner wished to create a path to company ownership for his loyal direct reports, he had failed to ensure their readiness to do so. There were significant gaps in management bench strength, in spite of the team’s exceptional technical talents and commitment to the company’s success.
Healthcare related consulting services has historically been extremely stable, and capable of withstanding virtually any kind of economic environment.
Large clients within this sector are inclined to see value in outsourcing to service providers like this company.
In an industry in which most service offerings are treated as commodities, this firm’s superior consulting talent has distinguished itself within the marketplace. Yet 5+ years after a decision to invest heavily in a proprietary new service offering, its traction in the marketplace was limited due to a lack of market intelligence and emerging competitor service offerings.
Documentation of key decisions, performance metrics, and organizational processes was largely paper bound. Critical corporate documents, including client contracts, were in paper format, with multiple copies, and equally difficult to store and retrieve efficiently.
Not surprisingly, this lack of digital dexterity resulted in severely limited measurement and reporting capabilities. It also had begun to create increasing regulatory risk to the organization.
Both co-founders had earned industry-wide reputations as visionary, savvy innovators and, under their leadership, their firm had become a trusted service provider. Yet the company had no ownership succession plan, leadership succession plan or consistent leadership team practices.
Due to the unique regulatory structure of their historical client base, the firm’s client and prospect universe was largely limited to the state of Minnesota.
An over-reliance on a small handful of highly profitable clients who accounted for 95% of the business’s revenue existed.
Like many entrepreneurs, leadership optimistically over-hired in anticipation of new business, then neglected to reduce staff when sales failed to materialize, or client loads fell. In a business dictated by large contracts, these hiring practices created unacceptable fluctuations in costs and profitability.
Based on Mayhill’s assessment of the owner’s urgency to retire, Kevin took the following steps: