SHANE PIERSON
Purveyor of Honest Capital
How do your prove it when your resume may not show it?
FYI, the ones approving your loan often only see a piece of paper in front of them. But you are more than just a “# of years” or a resume.
I had an epic exchange with industry baller Bruce Marks, MBA, CMAA that underscored a critical factor: the alignment of management experience with business goals, especially in the ETA (entrepreneurship through Acquisition) and business searcher space.
Many aspiring entrepreneurs and buyers are eager to dive into opportunities but overlook the nuanced demands of management alignment.
This conversation inspired a robust protocol for scrutinizing this alignment while preparing a deal for SBA approval.
Here’s the essence of what we’ve distilled:
- Assess Management Skills Deeply: It’s not just about having management experience, it’s about having the *right* kind. In-depth evaluation of the prospective buyer’s skills compared to those of the current successful owner is crucial.
- Day-to-Day Reality Check: Understanding the granular, day-to-day activities of the current owner provides invaluable insights into what the buyer is truly signing up for.
- Mitigate Weaknesses Strategically: Identifying and addressing potential weaknesses in management capabilities early on can pivot a deal from questionable to promising.
Bruce’s profound queries combined with a mindset of ‘brutally honest capital’ can transform how we approach deal structuring and buyer assessment.
In the last decade, a pattern has emerged showing that starting a business or stepping into an existing one isn’t impeded by external factors, but rather internal clarity and preparedness:
- Clarity Trumps Confusion: It’s essential to have a clear vision of your path and the operational aspects of the business you’re stepping into.
- Action Over Perfection: Don’t wait for the perfect moment or the perfect skill set. Dive in, learn, adapt, and evolve.
- Creativity Over Capital: Leverage what you have, including innovative technologies and methods, to overcome perceived funding gaps.
- Simplify to Amplify: Focus on business models that align with your passion and skill set to ensure a more streamlined path to success.
- Systemize to Maximize: Implement systems to streamline every process, from due diligence to management transition.
This exchange with Bruce serves as a powerful reminder: Aligning management experience with the business’s operational needs is not just a step, but a leap towards ensuring deal success.
‘Ship fast and iterate’ isn’t just for startups, it’s a mantra for SBA lending and acquisition processes too.
Assess, align, act, and adapt – the four A’s that can guide an SBA loan originator or buyer to success.
