Position Your Portfolio Company for Success: A 100-Day Plan
The first 100 days after acquiring a business can make or break the success of your investment. It’s a critical period where quick decisions and strategic actions can set the foundation for growth—or costly setbacks. For private equity firms, understanding how to evaluate and optimize your new portfolio company is essential to getting the most out of your acquisition.
Where should you focus your attention during this initial phase? Let’s break down the key steps you should be taking now to set your portfolio company up for success:
Assess the readiness of the organization’s Accounting & Finance team
Start by evaluating the portfolio company’s Accounting and Finance (A&F) team to ensure the right personnel are in the right places with the right expertise to address critical post-acquisition tasks—from financial reporting to compliance, strategic planning, and more. If gaps are identified, consider addressing them with additional training, mentoring, or new hires. This may also involve appointing an interim CFO or recruiting a new finance leader to provide the necessary guidance and oversight
Review the existing technology and systems
Conduct a comprehensive review of the portfolio company’s current technology, software systems, and ERP solutions to ensure they’re not only up to date, but optimally configured to handle the company’s operational needs as it grows. If any technology is outdated or underperforming, consider replacing it with solutions that improve efficiency, integrate seamlessly with existing workflows, and can scale with the company’s growth.
Evaluate current processes
Look at the company’s current workflows and operational procedures to identify areas of inefficiency or bottlenecks that may hinder growth. Can any of these processes be streamlined, standardized, automated, or even outsourced? Review any existing standard operating procedures (SOPs) to ensure they’re effective and aligned with best practices. If no SOPs are in place, determine where they’re needed most and develop clear guidelines to support smoother operations and consistent results. By establishing and refining these processes early on, you will hit the ground running with a more productive, cost-efficient operation that can support the company’s growth and strategic objectives.
Review accounting and reporting procedures
Evaluate the company’s accounting and financial reporting practices to ensure they’re accurate, transparent, and compliant with regulatory standards. Are their financial statements properly prepared, and do they align with GAAP and other applicable frameworks? What about their monthly closing processes, debt covenant reporting, and other critical financial reports? Are they completed on a timely basis? Review these areas thoroughly to ensure they present a true and reliable picture of the company’s financial health. If any deficiencies are found, implement targeted improvements to establish a stronger financial foundation to support smarter decision-making and planning.
Look for synergies
Evaluate the new portfolio company’s operations to identify opportunities for greater alignment to your existing portfolio companies. Evaluate whether functions like purchasing, sales, and supply chain can be leveraged across the businesses to reduce redundancies and lower costs. Review benefits plans and insurance offerings to see where consolidation can drive further savings. Use these combined insights to build a plan that maximizes efficiency and aligns with the company’s long-term goals.
Examine Finance and M&A operations
Evaluate the company’s financial health with a focus on cash flow optimization and working capital needs. Assess the company’s ability to support expansion goals. Is additional financing needed? Also, consider exploring additional M&A opportunities, such as tuck-in acquisitions, to enhance market presence. If inefficiencies are identified, take corrective actions to strengthen financial performance and support long-term growth.
By carefully assessing these key business drivers of your portfolio company’s performance and value, you can determine if the existing A&F team is equipped to handle the post-acquisition complexities. If they are not, you could face costly delays, compliance issues, and obstacles that might derail your company’s growth trajectory.
At CFO Consulting Partners, we partner with you to identify and bridge any gaps, stabilize operations, and set your company up for long-term success. Whether you need interim support while recruiting a new CFO, help bringing your current finance executive up to speed, or an experienced CFO to complement your existing A&F team, we’re here to help. Our CFOs and CPAs understand the intricacies of finance and business, and we’ll help you protect, grow, and realize the greatest value of your investment.
For more information about how CFO Consulting Partners can help you hit the ground running in your first 100 days and beyond, contact us here or call David DeMuth, CPA/MBA at (646) 924-5192.