Attempting a bold move without a clear strategy will rarely succeed. Following a disciplined strategy process ensures that tradeoffs are considered and that profitable opportunities are not ignored
Know Your Timeline!
Time is the most important constraint. Unlike capital or resources, time is the only finite resource. This is why Crossroads uses the timelines below to help clients formulate appropriate strategy.
1 Year Timeline
While transformation changes are impossible, operational improvements can help improve valuation and allow owners to ride out short term downturns.
3 Year Timeline
The three year timeline allows for significant improvements to be made to a company. Operational changes, strategic divestitures, or bolt-on acquisitions can be viable solutions.
5 Year Timeline
Order of magnitude jump in valuation is attainable. Transformative change is possible, long-term projects can be implemented, and vast resources are available for deployment.
The Three Choices: Buy, Sell, or Build
Operational excellence is the prerequsite of successful transformation. Yet, on their own, incremental improvements cannot take a business to the next level. Only a bold move can help you reach the next peak.
Charting the Path Forward
Crossroads Capital offers a unique process blending market research with advanced financial modeling to help companies select the best road for their corporate development journey.
Step 2: Find Your Market Fit
The highest risk-adjusted value occurs when your company fully leverages its internal comparative advantages in the markets with the highest impact. To do so, Crossroads recommends that clients conduct an objective introspection of company capabilities, resource constraints, public perception, existing products or know-how, risk tolerance, and current shareholder goals.
Step 4: Compare Options Quantitatively
Clarity of ideas is a prerequisite for formulating useful strategy. Financial models help decision-makers vividly picture exactly how an organization may look like in terms of profitability, capital structure, and investments required to properly follow the path desired. Crossroads recommends that organizations compare the viability of each option using metrics like IRR, NPV, or ROI using models to prioritize and “stress-test” options.