When was the last time you did a due diligence exercise on your own business? Never?
Of course, any potential buyer of your business will do one on you, so if you have any intention of selling up in the next few years, it’s a good idea to get in there first. Ask the awkward questions before someone else does.
That was one of the takeaways from an interesting panel discussion – How to scale, create value, and successfully exit your media business – at the recent PPA Independent Publisher Conference. The discussion was chaired by Collingwood Advisory’s Andrea Davies and featured Conor Dignam, Chief Executive, Media Business Insight and Dan Loosemore, Chief Operating Officer, DataCentre Dynamics, two companies that had recently been acquired by new owners.
Another takeaway was that, even if you had no intention of ever selling your business, some kind of due diligence exercise was well worth undertaking anyway, because it would highlight those areas of your business that needed attention.
Over the last few years, both Media Business Insight and DataCentre Dynamics had undertaken a root and branch reassessment of their businesses. These are some of the things they did:
- Audit their business: they asked themselves the key strategic questions, such as where will high margin growth come from and is what we’re currently doing the best use of our resources?
- Set new strategic goals: these included a focus on growing corporate as opposed to individual subscriptions and using LTV as the key determinant of everything they do.
- Restructured: commercial teams moved away from selling events / titles / products to selling campaigns and solutions. This improved productivity and revenue and streamlined client communications.
- Improved internal communications: a key part of setting new strategic goals was aligning all elements of the business and communicating the vision, and keep communicating it, so that everyone could articulate it. Part of this was surveying the team annually to get meaningful feedback and, crucially, acting on it.
- Right sized: Part of the audit process was identifying activities that did not justify the effort put into them. You’ve got to be clear eyed and ruthless. If the return does not justify the input, then kill it off.
Even if both companies had not been acquired, it would appear that the actions senior management took over the last few years have turned them into more viable businesses.
You can catch James Evelegh’s regular column in the InPubWeekly newsletter, which you can register to receive here.