Speaker (Tom Burton) recounts investing in a family-owned manufacturing company where the owner treated cash informally, preventing the firm from reaching operational standards required for M&A diligence. He advises running any business as if it will be sold—manage books, teams, warehouse and distribution now—so the company becomes efficient and acquirable.
Chapters
I was involved in a I invested in a family owned manufacturing company years ago. And one of the reasons I only was there six or seven years in the day to day is because the principal owner sometimes kind of ran the ran the business like a liquor store, right. If there's cash in the till, I can take it. And it wasn't running to the level of operational efficiency that you could ever go through an M and a transaction with the diligence that would be needed. So, so my conversation when I joined that company was we need to run the business like we're going to sell the business. Whether you're in the manufacturing side of the world or distribution side of the world, manage your books, manage your teams, manage your warehouse and distribution models, manage all of that today like you were preparing to be acquired because you become this crazy, efficient business that now could be acquired.