Advice for CEOs

The 100 day plan is an important business process that is central to several specific business situations-- and broadly relevant to others. It is a key step executed by private equity (PE) firms immediately after a close of a transaction. In a very different context, a 100 day plan is also essential to turning around a company that has negative cash flow and is in danger of losing access to credit and even going bankrupt.

In a previous post, I discussed the fact that many private equity (PE) firms are struggling to find promising lower middle market companies to invest in at reasonable prices.

The private equity (PE) industry is experiencing a very challenging investing environment. In simple terms, there is too much money chasing too few deals. Dry powder has soared increasing 13 % since December 2014, according to Preqin.com, rising to a record level of $1.24 trillion in March 2015. This amount has risen every year since 2012. As a result, valuation multiples continue to increase, making it more difficult for PE sponsors to find profitable investment opportunities.

In a previous article I discussed the pressure that a business’s growth--even profitable growth--puts on working capital. Companies generally need to step up their capacity or infrastructure to support their ability to deliver the goods and services they sell-- well in advance of receiving the revenue that will come from a growing base of sales.

In my last article, I discussed the cost of acquiring new customers, emphasizing that you must understand the cost in cash and time of pursuing new customers and convincing them to take a chance on you.