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Manage Value

Virginia “Ginny” Altman

In this picture, you see me climbing onto the tiptop story of a 30-floor building on the property of St. Mary’s College in Connecticut. I was hired to transition the son of the owner of a large, commercial flat-roofing company into the role of “Owner” or to get the business ready to sale. But as you will see in the project description, neither of those things happened. In fact, something much better for the given situation happened, and to this day, all parties are happy.

It all started with a 360 Business Valuation. That’s the beauty of the process: we end up doing what is best for you, your family and your business. Custom-designed.

Take a look at what we’ve done for other businesses. Then contact us to begin the discovery of what we can do together to create the future best for you and your business.

  2. The Preparation: Combining Theory and Street Smarts with Experience, including the following project summaries:
    • Overcoming High Expertise/ Low-to-No Profit Roadblocks (“Technicians” as opposed to “Entrepreneurs”)
      • Turning Wear-and-Tear into a Training Cash Cow
      • Sifting the Wheat from the Chaff: Turning Low-Volume, High Value Propositions into Strategic Offerings
    • Uncovering the Golden Egg Niche in a Commodity Business
    • Creating an Emerging Technology Spin-off for a Son from an Out-dated Business
    • The Hollow Golden Egg: Preparing a Restaurant Service Business for Expansion/ Franchising (Spoiler Alert: Unhappy Ending)
    • Fixing the Cracks in a Golden Egg: Preparing a Business with a Unique Value Proposition for Private Equity Buy-out
    • The Real Deal: Tripling the Multiplier of a Golden Egg with High Future Value
  3. The Result :  Value-Wise Business, a Collaborative Approach to Business Valuations that Goes Beyond the Numbers

I. The Foundation

International Change Management and Turn-Around Business Consultant

Early in her career, Ginny worked as a project manager at Ford Motor Company, implementing Total Quality Management (TQM) under the direction of Dr. R. Edward Deming, founder of TQM (which morphed into Six Sigma).  This experience taught her that understanding and serving the customers’ needs, married with an obsession with Quality, is the foundation of good business.  She learned the value of creating data to create process and performance improvement, ultimately leading to decreased work and increased profit.  This work reduced the Electronics’ Divisions production timeline from 136 to 36 months, a 74% reduction in the product development timeline.

What was the Superpower behind this success?  Ginny always believed that the Superpower of a high performing consultant is to hear the voices of the people who do the work, incorporate their ideas and thought into the work, and to give them credit in a highly visible and vocal manner.  The secret to success in creating change that works for both the business and the employees is to always find out the Superpower of each employee and to create opportunities for them to achieve the growth they desire as it supports growth and sustainability of the Company. 

Ginny also worked as an Instructional System Designer for The Army, helping to create the mapping for the first Artificial Intelligence Tutoring System.  This system was used to teach active duty soldiers how to troubleshoot the M1A1 tank’s infrared system during active engagement.  A second project with Ford involved being on the team that created the first internet-based Worldwide Engineering Release System (WERS).  Ford of Europe then recruited Ginny to design and deliver training for WERS in Europe. 

After eight years of basically non-stop work, Ginny took a three-year break to work at a Christian horse camp as a horse wrangler and counselor, a homeless agency in Charleston, SC, as a Bible teacher, and then Jerusalem to become a member of a ministry that brought Jews, Christians and Muslims together to worship their common God.  These were three of the best years of Ginny’s life! 

One of the consulting firms familiar with Ginny’s work, Kepner-Tregoe (based in Princeton, NJ), tracked her down and offered her a job that she couldn’t resist.  She re-entered the world of international consulting, this time in implementing Visual Factory concepts and preparing divisions to be sold. Working with companies like Procter & Gamble, Algoma Steel, Heinz, Hershey, International Paper, Corning, Inc. and BHP Steel, Australia, Ginny had the opportunity to not only be involved in facilitating the creation of the plan, but also implementing them, managing the troubleshooting and redesign which comes with implementation.  

Some outstanding results were accomplished: At Corning Consumer Products, we turned a -6% ROI into a +14% ROI over a two-year period – which increased the sale price from $350 million to $700+ million. At BHP Steel in Australia, we reduced quality problems by 35% and increased production levels by 22% by implementing change at the floor level.

There are no words to express the deep sense of thankfulness I have for the mentors that I have been blessed with. Ginny Altman

“Dr. Deming and Lou Focht at Ford taught compassion, accountability, and business acumen. Katie White, CEO of Corning’s Consumer Products Division, taught me discernment and data analytics. Roger Ackerman showcased my greatest professional need: to learn what it’s like to be at the bottom of the ladder where change is hardest, and most important, to implement. All of them, along with my parents, modeled high ethical and work standards. I will be forever grateful.”

“Ginny, you are one of the best consultants I ever worked with, but you won’t be brilliant until you know how your work impacts the people who work on the floor.“
Roger Ackerman, Chairman of the Board and CEO, Corning, Inc.

After the Corning Project, I followed Mr. Ackerman’s advice and fought to get on a project where I was implementing a Visual Work Factory at the floor level, where the work was being done, versus at the theoretical C-Level place.  That’s how I ended up in Wollongong, New South Wales, Australia, literally learning the ins and outs of rolling, pickling, tempering, and plating steel.  And most emphatically, the nitty gritty of the business – machine maintenance.

It took quite some time to build trust with the guys (there were no other “sallies”) and overcoming some real challenging resistance, but I stuck it out, and it paid off.  The guys on my line learned and applied more statistical process control and behavioral modifications than any of the other lines, and increased run time while decreasing defects. 

But it did take a toll on my health, and after nearly three years, it was time to come home.  I had learned so much about how different it is to implement on the floor than to theorize at the top level. I knew that I could not ever do the work I had been doing at the C-Level in the same way ever again.  It was time to go home.

II. The Motivation

Owning and Selling the Family Business

After 20 years of being on the road, Ginny decided to come home. She never expected to become the second generation owner of her family’s telecommunications business, but she did!

FOR SALE!

Making the Decision to Sale

In the early 2000’s, I surprisingly found myself the owner of our family business, Altman Telecommunications, Inc.  My original plan was to get my nephew ready to take it over, but – surprise again – he didn’t want the responsibility of a 24/7 business.  Frankly, I didn’t want it long-term either. Combine that with the fact that telecommunication as we knew it was a dying business and it became obvious that it was time to sell the family business.

Anybody out there who owns a family business knows that the family’s relationship to that business is complicated. In all honesty, I did not comprehend how complicated that relationship was for the family. I was to live to regret that for many years.

The first thing I did was look around for how to get a business valuation.  I knew to do that because I had worked with business valuations before as a change management consultant.  On a project I worked on at Corning, Inc., Goldman-Sachs was the Investment Banker, and their valuation was our project’s measure of success. 

While I wasn’t exactly sure how valuations were calculated, after two years of listening to Goldman-Sachs’ reports each month on the success in increasing value, I had gained valuable insights into what is , and what is not, valuable when selling a business.  I had already done some preparation for getting the business ready by incorporating value-adding touches:  new revenue streams, a structured sales process, cross-training and getting our toes into the emerging technology. 

For our business, the emerging technology was VOIP (Voice Over Internet Protocol).  I managed to get three opportunities to install VOIP systems into three long-time customers’ operations.  We actually linked multiple locations over three states together in one VOIP system – an unheard of concept at the time.  It was pretty cool.  I had invested a lot of money in training the guys to do VOIP, but it only served to prove that they did not want to convert from a mechanical to a computer-based system. That surely affirmed that it really was time to sale the business.

The Business Valuation Experience

When I searched for a business valuator, there didn’t seem to be any around.  I finally found a local accountant who offered valuations; I nearly fell out of my chair when I heard the price!  In truth, it was a fair price for a mid-sized business, but for our family business, it was a way huge chunk of money.  [That’s why Value-Wise Business has a sliding pricing scale based on tax-reported revenues.]

I knew I needed a business valuation, so I grudgingly paid the price. The accountant did offer me a small discount for filling out the paperwork myself – a 20-page form that was requesting information more appropriate for a stock-based business than a small family-owned business.  I was more than willing to do it to get the discount.  That gave me some insights into what all was involved in valuing a business, but unfortunately, it did not give the accountant any insight because the document was transferred to her administrative assistant, who entered the information into a software package, and emailed the generic result back to me.

When I got it, I found a number — deep within that 50-page document that sounded like gobbledygook to me. And the number I saw for the price — the suggested sale price — seemed completely wrong to me. Like way too much more than it was worth. I knew that the state of the industry would detract from the sale price, but I also knew that the efforts I had made to prepare the business would increase the sale price. And when I called the accountant, she didn’t know either because she hadn’t even looked at my information.  And even when she did look at it, she couldn’t explain what was specifically influencing that price.

Wow.  That was super frustrating.  Super super super.

Grand Slam: Selling the Business

Now, having a sort-of price, it was time to figure out how to actually sell the business.  As frustrating as the business valuation segue was, it was a breeze compared to the frustration that came from trying to figure out how to sell a business.  Admittedly, this was 2006-2007 time frame, before Shark Tank and everybody knowing how to sale a business; and before all the new technologies to support selling a business were offered online.  In 2006, there was absolutely nobody I could find to help me with this.  My accountant sent me to the M&A folks in Pittsburgh.  They would only take clients who had revenues of $30 million or above.  (Today, their standards are a little lower, even so our business would still not be their “avatar”.)

Right.  Back to the drawing board.  So I called my accountant, who told me to go to Pittsburgh….

In desperation, I decided to use that new Search Engine technology to see if I could find someone somewhere who would help.  And I did.  For a mere $5,000, two guys in Buffalo, New York would teach me everything I need to know in two weeks to know how to sell a business.  I was desperate enough to go to Buffalo in January in the midst of densely falling, piling up snow to understudy these guys.  One of them proved useless; he came in drunk in the morning and went home for lunch and never came back.  Every bloody day.

At least I got a packet of forms more appropriate for small to mid-size businesses, and also I did actually get an idea of how to do a valuation.  Oh my Lord, that was such a frustrating time.  Today, just thinking about it makes my heart race. 

Folks, it doesn’t get better.  I had this what I considered over-valued valuation number, but no means really to determine whether or not it was over-valued.  I had spent an enormous amount of money training my techs for the emerging technology, but they never really took to it.  I had also spent enormous sums on trying to put a price on the business. I had customers I needed to take care of, and techs to outplace.  I needed to find a buyer.

Frankly, I did not have a clue how to do this. I called the other small telecom companies and their offer was pitiful. Wouldn’t cover the expenses I already had invested — and were not remotely close to what the valuation quoted. Once again, the accountant and attorney did not provide support. I don’t think I slept a whole night through for an entire year.

But finally, I did find a buyer.  One day, while pitching phone systems to a phone system prospect in Panera’s, I overheard some guy talking about his phone company.  Boy did my ears perk up!  I couldn’t wait for my sales call to be finished so I could get to that guy before he left.  I closed the deal, thanked the customer, and went over to the telephone guy and said:  “Did I hear you say that you own a telephone company?”  And he said, “Yes, you did.”  And I said, “Great, because I have one too and you are going to buy it.”

And he did. Unfortunately, he was being slammed by the VOIP industry change too, so he didn’t last long, didn’t make the payments long, and I didn’t want it back.  Believe me, there were some unhappy customers. When the buyer declared bankruptcy, the techs dispersed and I couldn’t get them back. And unfortunately, I had not known that you could write a clause into a purchase agreement that places you in line for payment if the purchaser declares bankruptcy. Nor how stupid it was to not get the money for the business up-front. Unhappy ending to the business my dad and sister had operated so well for 28 years. And I was seen as the author.

I was now DETERMINED to learn how to help other business owners

to exit their businesses in a way that made them and their families proud.

Are you wrestling with how to exit your business?
Call 412-514-1050 or click this button to send an email.

January 1, 2008, I opened Altman Business Solutions, LLC, to do just that.

III. The Preparation

Combining Theory with Street Smarts and Experience

Ginny often says that her business brokerage was a training ground for creating Value-Wise Business, a company that not only delivers important business management information to business owners, but empowers them to take control of the value of their business.

Thanks to my years as a consultant who implements (not only designs) change, I gained a deep understanding of how businesses do (and do not) work internally.  But selling the family business brought me face to face with the fact that I did not understand how the greater world – the economy – works.  How do you make connections, what are the interdependencies, how do you find who you need?  What influences the economy thus sale prices; what makes a buyer’s market, a seller’s market?

So I enrolled in the Public Management program at Carnegie Mellon University.  Wow, I learned a lot!  I was fortunate to have Investment Bankers as adjunct professors who taught us how the Mergers & Acquisition world works. One of the most important things I learned was how important it is to have data to back up the sales proposition. This fit right in with what I learned from Dr. Deming at Ford and Ms. White at Corning: Create data that has a voice. Because CMU has an extraordinary emphasis on doing project work out in the community, I began to gain an understanding of how business intersects with community.

If I was going to work with the owners of small businesses, I needed something more specifically designed for small to mid-sized businesses than CMU offers.  The International Business Brokers Association was the just the ticket.  They offer a Certified Business Intermediary Certification (CBI) – a two-year program even more intense (and with more credit hours) than my CMU Masters.  Courses were delivered in different locations across the country, where local business brokers taught us how to do business valuations – like, real-world, not just a generic formula.  They taught us how to market and sale, what pitfalls to avoid.  It was an amazing education!

The Exit Planning Institute offers a structured approach to exit planning that begins with the question “Are YOU ready to exit?” The Exit Advisor and Financial Planner work together to assess the ability of the current financial situation and future value of the business will provide the resources needed to support the owner’s goals and objectives. And a plan is developed from there, which can including a transition plan for the business. And in the process, complex emotional situations can be reduced to manageable, even positive ones, thereby increasing the likelihood that the family will be happy with the end result.

Feet-on-the-Ground Experience

When I opened Altman Business Solutions, aka Altman Profit Solutions, in 2008, my intention was to be a consultant who helped business owners to grow the value of their business, capitalizing on the super power of data analytics. But everyone who came to Altman was ready to sell their business NOW. So I hired an incredible website company who put an exciting website together, and I put together the process for selling businesses. Leads came tumbling in.

This was before Shark Tank, and business valuing and selling was pretty much an industry cloaked in secrecy, protected by The Old Boy Network. Selling businesses outside of that network required subscribing to a number of services to gain the information and systems needed to do the job. But the business flowed in (lots of owners had the same frustration I had when I wanted to sell Altman Telephone). This was all good until the economy started to tank. By 2012, business brokers were sorely lacking in business. The good news: It gave me the opportunity to get my first on-the-floor laborer job to support a decimated business. I can honestly say… I stank at the job. Difficult manual labor wasn’t in my toolbox… yet.

The worst moment of my career happened during this time frame. I was working night shift at the manual labor job, and day-time networking to try to keep Altman Business Solutions profitable. I finally got into the Pittsburgh network I wanted (I’d been trying for a couple years), was invited to a meeting to “meet the guys,” and sitting in the front row of the presentation… fell asleep. Well, that ended that.

It so happened that one day, in late 2012, a business man in Connecticut called and asked me to come and get his business ready to sell. It was the opportunity that could be leveraged to move Altman into the consulting groove. I completed two, two-year projects before moving back home. When I did, I engaged in the Exit Planning certification to gain more insights into the overall exit planning process. Then I opened The Exit Eagle, focusing more on value acceleration than business brokering.

Following are some project overviews to provide an understanding of the projects completed through The Exit Eagle.

Overcoming High Profit Margin/ Low Profit, Lone Ranger-Owner Roadblocks

The Situation

A sole proprietor who employed one on-call worker wanted to sell his business to move to Florida.  The owner had developed an extremely specialized niche market repairing a certain type of critical plug; in fact, there were only a handful of people in the United States who could provide the service he provided, primarily to municipalities and secondarily to manufacturing companies.

As far as small businesses go, this one a lot of the right stuff:

  • A customer base that included customers that “big guy” prospective buyers had been trying to get into for years.
  • An exclusive service offering and a national reputation for being THE ONE to turn to for problems with a wide range of ancient, old and new plug designs and their systems.
  • A generous profit margin.
  • A cool name with great, nationwide recognition.

The Problem

There were several problems: 

  1. The owner didn’t really want to sell the business, but he did want to move to Florida. 
  2. He had reached the point where the wear and tear on his body had really reached a critical point; he couldn’t really continue to do the work much longer. 
  3. The business lacked any documentation of troubleshooting knowledge and processes, nor did it have any retainable skilled employees.  Therefore, the buyer’s success was dependent on the owner training their employees to do the troubleshooting.  What if he didn’t follow through?
  4. While the profit margin was good, the tax returns showed minimal profit.

The Solution

The Exit Eagle created a plan for developing videos that captured the owner’s expertise that would be sold by subscription on-line via a redesigned website.  In addition, companies who sold the plugs and/ or downstream services would be offered training packages that included live on-site training.  Finally, technical training and troubleshooting documentation would be created from the videos; and consulting services would also be offered to clientele.  This business would be run from Florida, with his girlfriend managing the business component. 

The owner moved to Florida and executed the plan.

Uncovering the Golden Egg Niche in a Commodity Business

Embroidery businesses come a dime a dozen, in all different kinds of forms and shapes:  Big ones that offer a myriad of advertising tools; little ones in a corner of a room in a house; and medium ones that employ a few people – either in a basement or a retail space, as the case may be.

Embroidery businesses have very few barriers to entry (fairly straightforward to learn, you can get started with used equipment that brings the price down, and hire help on an as-needed basis).  And, because the technology is widespread and profit margins slim, it is difficult to retain customers.

When the couple that owned this business came to talk to us about selling their business, we were a little reluctant to take it on because there was a great chance that it wouldn’t sell.  In addition to the concerns listed above, the business was located in their basement; and the owners were basically the business.  At first glance, there wasn’t much reason for anyone to buy the business.  Why pay multiples of revenue on a business that you can almost as easily start from scratch for much less?

We did, however, agree to do the business valuation because we admired the owners’ chutzpah and really wanted them to succeed.  And, while we couldn’t put our finger on it, it just seemed as though there was something there.  So we started the valuation process by digging into the financial data to see if we could find any patterns that would reveal a uniqueness that someone would want to buy.  And here is what we discovered.

  • Their largest category of customers, Businesses (38% of customer base) generated only 30% of their revenue.  
  • 66% of Business revenue was a one-time order from a service company that had just changed its logo, so they had to buy new uniforms, coats, etc., for their staff.  That was a rare event. 
  • Sports/ Outdoor Teams had the highest percent of revenues and second highest volume of customers.  But loyalty was unreliable; as parents in charge of ordering uniforms, etc., cycled out, incoming ones usually brought their own provider in.
  • Individuals rarely had any repeat business.
  • Nonprofits in general were a highly competitive environment to sell into.

Pinpointing a Unique Value Proposition

  • Private schools were only 10% of their customer base but were 20% of their revenue stream.
  • Once you have a school, they are very loyal. It’s hard to lose them.
  • This company had a proprietary, hands-on, in-the-school service, bringing the store to the students and parents at the school. This was not only good marketing for the company, but also a great way to build relationship between the school and the parents.
  • Their primary competitor was a large, nationwide, highly impersonal service, offering only on-line sales.

Considerations

  1. Were there enough private schools locally to make this a niche-worthy sector?  What would the positioning be?
  2. The majority of schools were within a reasonable driving radius.
  3. The target market, public schools, and specifically, private schools, were struggling with an ever more competitive environment. Our client’s personalized service also provided a relationship benefit for retaining current customers, as well as attracting new: Busy parents don’t have time to make special trips to an embroidery store, or to deal with deliveries and returns.

Our Recommendation:

Move the business out of the basement, hire a full-time employee, put together a brochure highlighting your unique approach to serving your private school clients, and after getting at least two more schools signed up, then re-market the business to be sold.

The Result:

The owners followed through on all the suggestions and then sold the business rather quickly at three times the original sell price.

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Yes, we accept reservations. Please call us or book online through our website.

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We are open from 8 AM to 6 PM, Monday to Saturday. We’re closed on Sunday. Holiday hours may vary, so please call or check our website for specific information on those dates.

Do you have vegetarian, vegan, or other special dietary options?

Yes, we offer an array of vegetarian, vegan, and gluten-free options. If you have other dietary requirements, please inform your server, and we’ll do our best to accommodate you.

Is parking available at the restaurant?

Yes, we have a parking lot adjacent to the restaurant, and street parking is also available. Valet parking is offered on weekends.

Can I order food for takeout or delivery?

Absolutely! You can order online through our website or by calling us. We offer both takeout and delivery within a specific radius.

Can I bring my own wine, and is there a corkage fee?

We do not allow guests to bring their own wine, beer, or spirits to our restaurant. We have an extensive beverage menu, including a wide selection of wines, beers, and cocktails for you to enjoy.

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