Nimble Knowledge Toolbox

A vending operator asked his bank for a $320,000 loan to buy a competitor. He was turned down. The business broker referred us to revise his business plan and loan request. 

We invited four local banks to bid on his request. He got three terms sheets and the winner was his own bank. The combined cash flow funded an inventory/theft control system for a one-time savings of $80,000, reducing the cost of the buy-out. We succeeded by pulling in key industry data he had but did not know was important. 

The partners of a consulting firm could not understand why their successful business had trouble affording them bonuses. They dreaded the annual line of credit renewal process with their bank. They also wanted to be acquired by a larger firm at a good value.

We captured four-years’ of tax returns in our Nimble Knowledge Toolbox, uncovering business and accounting practices that were problematic. We explained how to fund larger bonuses, while keeping the business “bankable” now and attractive for the future. In a few years they sold the firm for a very good price.

 An MBA business consultant wanted to buy a specialty retail business. She was looking for a second opinion on the business’s value and loan request support. Our analysis of the business uncovered some potential risks and also opportunities for improving profitability and cash flow. She was able to negotiate a lower purchase price due to the risks. She obtained a $400,000 SBA loan due to the opportunities. She has owned the store for many years and turned it into a leader in her market. 

A travel agent wanted to buy her own agency. Based on what the owner was taking, she thought she would be getting a raise, but she was risk averse. 

We analyzed the broker package and developed key questions for owner and broker. Revenue trends appeared stable, but it was costing the seller more each year to keep the business. We recalculated realizable cash flow and start up cash needed to carry it through turnaround. The client chose not to make an offer when she realized good revenue is not enough to guarantee success.

A peer group of 8 business owners in the communications industry coached each other by sharing monthly financials and key performance Indicators (KPIs). They took turns compiling 8 large datasets into a 5-page, 12-column excel workbook. The data was overwhelming and did not show how to improve margins. 

We imported their data into our Nimble Knowledge Toolbox® and mapped comparative financials and KPI trends for all members. We turned their KPIs into FIO-markers® (only 6 datapoints in three ratios) that spotlighted the big margin drivers. Their monthly conversations then focused on managing their FIO-markers to grow profits.

An expert in compliance retired from corporate and started a business to use his deep knowledge and stay busy. This industry requires highly specialized documentation skills and minute attention to detail. It offers thin margins in return. The company was losing money. He was funding losses from 30 years of wealth building – investments, retirement accounts, family and a local bank. His family wanted him to sell the business. His investment advisor wanted him to fix the business first and pay off key debts to sell at a higher price. The advisor put us together.

We identified inter-connected problems in sales, operations, finance and HR, plus being “held hostage” by a key employee. Internal conflicts kept him from outside sales. Our detailed report included six turn-around strategies, the cash flow impact of each and how to get their vital bank line renewed. To his credit, the owner paid off $187,000 of long-term debt in 12 months by implementing our recommendations. With a favorable income statement, he listed the firm for sale.

An industry consultant wanted to buy a landscaping business. The sales package from the business broker raised many concerns. The consultant engaged us to analyze 5-years of business history, contrasted with industry metrics, to craft a bankable counteroffer and lead the negotiation. With his firm purchase agreement, we were engaged to write a detailed 5-year projection, the loan request package and attend the bank presentation. The bank committed $700,000 in loans, structured to his advantage. This was more than he requested because repayment capacity was well-supported and made financial sense to the bank. He has quadrupled revenue and built value to fund his future retirement.

Yes. We understand your business is unique, not just a member of an industry. A business broker values your business, drawing heavily on past performance and industry metrics. Once the price is set, future negotiations will start there and go down. 

We are pragmatists. Our approach gives you a range of potential values for a strategic or a financial buyer. With a strategic buyer, your sale will compete with other corporate investment opportunities and must present a long-term ROI. With a financial buyer, the hidden “competition” is a business lender. They want a good loan opportunity. Either way, you must know risks your potential buyers might use against you. We help you document mitigants as your negotiating points. When you have a longer timeline, our gap analysis will define performance targets for 3-5 years, to raise value closer to your goal.

Important Disclaimer: We are not licensed business appraisers. If you are contemplating a transaction that requires an appraisal (SBA financing is one example), either you or the buyer (typically buyer for SBA) will have to pay for a formal appraisal by a licensed, approved provider.

You would use us for business management analysis. CPA firms primarily focus on your compliance issues: taxes, audits, loan covenants, shareholder transactions. Remember, tax advice without financial management insight, results in false savings and weaker decisions. Upload into our Nimble Knowledge Toolbox so we can convert tax returns into decision-making gold:  See - About Financial Hologram.

Monthly financial statements are the start, not the end, of understanding your business. Bookkeepers document business and financial activity. We turn it into financial intelligence with FIO-markers.  Too often, accounting quality is poor. We point out opportunities for improvement. Otherwise, you don’t have an early warning system and you can look risky to lenders.

Yes. Our success stories give examples of effective plans and loan packages that helped owners like you get favorable financing.  You need a subscription to our very easy Nimble Knowledge Toolbox. We will turn your history into a logical business case study for lenders.

 Of course. We love financial ratios and key performance indicators for strong business management. Look at  - About Business Hologram. When you and four trusted/friendly competitors enroll in the Nimble Knowledge Toolbox together, you will see your position relative to the peer group. We will uncover the drivers you must control to accelerate your business. Peer group participation makes it happen faster.  

Yes. We can diagnose and help with new goal setting. We look for issues and opportunities under the surface of your financial statements. If you aren’t collecting key performance indicators, you will rarely see bad news coming.

We know commercial lending and what banks need. About 65-70% of your history is how your industry works. But the 30-35% as your leadership makes your company unique. Business owners often struggle to tell their story objectively. We write business cases for the loan underwriters to grasp what makes your company different from industry average. 

If we discover your business is not very bankable right now, we prepare you for a crucial conversation with your lender. We can update your business plan to improve your business case. We have, in some cases, facilitated a bid process for term sheets from several hand-picked banks.

This is touchy and you are wise to ask. If you read the seller-related FAQ, you know there is more than one fair price for any business. Someone else’s business will never be worth the same in your hands as it is in theirs. We can answer whether the price may be too high for you. The touchy part isn’t making a counteroffer. It is presenting your discount factors objectively. We help you avoid offending the seller and shutting down negotiations before you are ready. 

Good point. Financial statements are a rear-view exercise. They can show “what” is going on,  but not “why”. A Financial Hologram will transform your monthly reports so you can use them to fix what’s bothering you. Your accounting manager will love the ease of uploading to the Nimble Knowledge Toolbox. You will love the easy “what-if” tool. 

Great question. If you are prepared to track some advertising metrics, we will map them to financial performance. Over a few months, you will see a pattern of expense to results. With A/B testing of your advertising messages and marketing channels, the patterns will show you where your investments will more than pay for themselves.

Yes, we can figure this out with you. Forty-eight months of data is a wealth of information. If you also collect key performance indicators, we can build a FIO-markers report.  Basic metrics could be: # of new customers, average sales ticket, # of repeat customers, average production time, % of orders shipped on time, revenue per employee, profit per employee. FIO-markers will bring  your challenges and opportunities to light.