Consultants Are Key to the Growth of Private Equity-Backed Companies

Smart and selective use of management consultancy

Companies backed by private equity are supposed to grow, to increase in value, and to do so quickly. They must be primed to implement strategy, manage costs, boost revenue, and ultimately provide the best enterprise value for owners. Everything is about improving strategy and operations to maximize the return on investment.

In a corporate world where change is the only certainty, here’s a fact about these companies: the most successful adapt fast and flexibly. Here’s another fact. While most of these companies believe they’re sufficiently flexible and adaptable, many are not.

PwC’s 2013 survey of private equity-backed portfolio companies contained a finding that resonates with even the largest and most stable publicly traded businesses. For operators in the private equity-backed space, the PwC assertion is particularly challenging: “The economic backdrop these companies face is a ‘new normal’ of relatively slower growth and greater uncertainty than in the past.” These risks, according to PwC, “remain weighted to the downside.”

How does a private equity-backed company deal with these uncertainties? In retail, fashion, travel and leisure, FMCG, and many other industries, how does it perform at strategic planning, conducting competitor analysis, managing expenses, increasing sales, and at the same time, allowing for variable economic conditions and fluctuating markets?

One answer is that the company buys in bespoke expertise — the detailed work tailored to deal with fluctuating scenarios — only when that expertise is needed and only for limited periods. In other words, the business buys the services of independent consultants. Critically, this allows the core team to avoid commitments of large fixed costs or the risk of onboarding individuals who subsequently prove incapable of delivering returns. And by using expert management consultants, the company remains adaptable and flexible – the qualities it needs to thrive.

Read the full article at: http://experts.allbusiness.com/guest_posts/consultants-key-to-growth-of-private-equity-backed-companies/#.VCLvNecWx6E

Patty Block, President and Founder of The Block Group, established her company to advocate for women-owned businesses, helping them position their companies for strategic growth. Charting the course for impactful, sustainable, profitable businesses, the beacon is control: of your strategic direction, your money, your time, your staffing, and your ability to bring in business. The Block Group brings together the people, resources and ideas that build results.

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