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Compounding Knowledge and Returns: 2016 Year in Review

Read about the lessons we learned at adventur.es throughout 2016 as we reviewed acquisition opportunities in the private markets, continued operating and investing in our portfolio companies, and tried not to screw up too often. 

Green Grass, Gratitude, And Things Being Hard

Anything worth doing is going to be hard. Let me repeat: no matter how simple, easy, or straightforward something appears to be, it will be difficult. In the beginning, it’s just not always obvious why.

Why We Love to Buy Boring Businesses

We’ve had the opportunity to evaluate and invest in all types of companies, including some “sexy” businesses — ones with high growth, brag-worthy products, or screw-the-rules teams with an average age of 25. While the “sexy” factor is never why we choose to invest, it can certainly be exciting. But the other end of the spectrum also attracts us; it contains what we call “boring businesses,” the almost invisible layer of the economy that hums under the radar, quietly supplying you with what you want and need.

How to Sell Anything: An Introductory Guide

Regardless of your business, sales matter. Sales are your organization’s oxygen. They drive the resources that power the business and provide the opportunity for profits. Despite being so critical, sales often take a backseat to sexier topics.

While innovation, culture, and efficiency are key to success, without sales, you’ll always find a failed organization. I’ve sold big contracts to multinational corporations and formed partnerships between startups — and I’ve made mistakes in between. While I’m still learning, my modest ability to sell has provided the breathing room to improve other areas. Here’s my take on sales.

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Important Metrics for Small and Mid-Market Companies — Part 5: Investment

In an average month, my organization explores around 50 companies for possible investment. We review everything from organizational structure, culture, and financial performance, to sales systems, competitive position, and leadership style. This gives us an unusual vantage point from which to recognize patterns of success, and failure.

Getting data is never the problem. In fact for most executives, information can be overwhelming. Getting accurate data and interpreting it appropriately is an entirely different story.

In The Ceiling of Brute Force, we discussed what operational areas impede a company from continued growth. In a series of posts, we’re going to break down 19 of the most important key performance indicators (KPIs), which demonstrate how effectively the business is being run. Think of KPIs as the canaries in your coal mines. If one starts going south, you know it’s time to take a closer look.

Presented in a five-part series, here’s our take on what you should pay attention to, allowing you to focus your time, effort, and dollars. The five parts are: BasicsCustomersTeamOperational Efficiency, and Investment. Investment is our focus in Part 5, including: product development, capital expenditures & depreciation/amortization, total asset base, working capital, and ROIC/IRR.

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Important Metrics for Small and Mid-Market Companies — Part 4: Operational Efficiency

In an average month, my organization explores around 50 companies for possible investment. We review everything from organizational structure, culture, and financial performance, to sales systems, competitive position, and leadership style. This gives us an unusual vantage point from which to recognize patterns of success, and failure.

Getting data is never the problem. In fact for most executives, information can be overwhelming. Getting accurate data and interpreting it appropriately is an entirely different story.

In The Ceiling of Brute Force, we discussed what operational areas impede a company from continued growth. In a series of posts, we’re going to break down 19 of the most important key performance indicators (KPIs), which demonstrate how effectively the business is being run. Think of KPIs as the canaries in your coal mines. If one starts going south, you know it’s time to take a closer look.

Presented in a five-part series, here’s our take on what you should pay attention to, allowing you to focus your time, effort, and dollars. The five parts are: BasicsCustomersTeam, Operational Efficiency, and Investment. In Part 4, we’re getting technical, describing operational metrics: scaling milestones & contraction triggers, sell-through rate & inventory turns, A/R aging & bad debt, and fixed vs. variable operating expenses.

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Important Metrics for Small and Mid-Market Companies — Part 3: Team

In an average month, my organization explores around 50 companies for possible investment. We review everything from organizational structure, culture, and financial performance, to sales systems, competitive position, and leadership style. This gives us an unusual vantage point from which to recognize patterns of success, and failure.

Getting data is never the problem. In fact for most executives, information can be overwhelming. Getting accurate data and interpreting it appropriately is an entirely different story.

In The Ceiling of Brute Force, we discussed what operational areas impede a company from continued growth. In a series of posts, we’re going to break down 19 of the most important key performance indicators (KPIs), which demonstrate how effectively the business is being run. Think of KPIs as the canaries in your coal mines. If one starts going south, you know it’s time to take a closer look.

Presented in a five-part series, here’s our take on what you should pay attention to, allowing you to focus your time, effort, and dollars. The five parts are: BasicsCustomers, Team, Operational Efficiency, and Investment. In Part 3, we’re presenting key metrics on the group of people that make your company function: leadership depth, employee tenure, and payroll ratio.

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Important Metrics for Small and Mid-Market Companies — Part 2: Customers

In an average month, my organization explores around 50 companies for possible investment. We review everything from organizational structure, culture, and financial performance, to sales systems, competitive position, and leadership style. This gives us an unusual vantage point from which to recognize patterns of success, and failure.

Getting data is never the problem. In fact for most executives, information can be overwhelming. Getting accurate data and interpreting it appropriately is an entirely different story.

In The Ceiling of Brute Force, we discussed what operational areas impede a company from continued growth. In a series of posts, we’re going to break down 19 of the most important key performance indicators (KPIs), which demonstrate how effectively the business is being run. Think of KPIs as the canaries in your coal mines. If one starts going south, you know it’s time to take a closer look.

Presented in a five-part series, here’s our take on what you should pay attention to, allowing you to focus your time, effort, and dollars. The five parts are: Basics, Customers, Team, Operational Efficiency, and Investment. It’s all things customer-oriented in Part 2: customer profitability, average acquisition costs, and concentration.

Read Part 2 on Medium >

Important Metrics for Small and Mid-Market Companies — Part 1: Basics

Getting data is never the problem. In fact for most executives, information can be overwhelming. Getting accurate data and interpreting it appropriately is an entirely different story.

In The Ceiling of Brute Force, we discussed what operational areas impede a company from continued growth. In a series of posts, we’re going to break down 19 of the most important key performance indicators (KPIs), which demonstrate how effectively the business is being run. Think of KPIs as the canaries in your coal mines. If one starts going south, you know it’s time to take a closer look.

Presented in a five-part series, here’s our take on what you should pay attention to, allowing you to focus your time, effort, and dollars. The five parts are: Basics, Customers, Team, Operational Efficiency, and Investment. We’re starting with the essentials in Part 1: market size, cash, and margin.

Read Part 1: Basics on Medium > 

The Ceiling of Brute Force: Small Businesses Don’t Stay Small on Purpose

In an average month, my organization explores around 50 companies for possible investment. We review everything from organizational structure, culture, and financial performance, to sales systems, competitive position, and leadership style. This gives us an unusual vantage point from which to recognize patterns of success, and failure.

As a general rule, small businesses don’t stay small on purpose. Companies “top out” for good reason(s) and rarely because of the business model. Beyond a certain point, sheer effort no longer works to overcome critical challenges. This is the ceiling of brute force. Each company hits it at some point, but the size, specific issues, and level of complexity varies dramatically.

A comprehensive study of organizations by Dunn and Bradstreet concluded that 90% of small business failure was directly attributable to a lack of management expertise. In my humble opinion, that number seems low. If failure occurs, it’s virtually always a fault of leadership. The question is “what kind of fault, and is it preventable?”

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