As we operate a delegated management system, aside from choosing the CEO and setting incentives, where do we add value?
Acquisitions – Our biggest leaps in growth have come from acquisitions, we do not delegate any part of that process. We have no analysts or internal number crunchers. My partner and I do the search, fly out to meet the seller, and do the financial analysis ourselves.
Cash Flow - We have yet to acquire a business that used a monthly cash flow report when we bought it. They all had income statements and balance sheets. Most businesses fail due to a lack of liquidity. Not understanding the difference between net income and operating cash flow. Not planning for needed CAPEX in advance. We fix that.
Unit Analysis – In our monthly reports we break down each business into the smallest profit centers possible. We assign each their corresponding expenses and measure their cost of goods. We look for over and under-performers. Copying the strong and correcting the weak. This drives efficiency.