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Hiring Board Members for a Manufacturing Company

February 7, 2024 Brad Gerick

Manufacturing companies recognize the value of board members who bring not just oversight but also strategic guidance to complex challenges. In this post, we’ll discuss the critical aspects of board advisory roles, drawing insights from recent BluWave client experiences across different use cases within the industry.

We have seen how board members transcend traditional oversight roles to become pivotal figures in strategic decision-making, operational excellence and leadership development.

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Let’s explore the necessity of assembling a board that can genuinely add value and steer your company toward sustainable success.

Examples of Manufacturing Business Types

The manufacturing sector is diverse, with each segment presenting unique challenges and opportunities. Here are examples illustrating the spectrum of businesses within the industry:

Specialty Manufacturing: Companies focused on producing specialty items, such as casters and wheels, face distinct market demands and operational scalability challenges.
Steel Manufacturing: Firms in the steel sector must navigate capital-intensive processes, global supply chain dynamics and stringent regulatory standards.
Low-Speed Vehicle Manufacturing: Manufacturers of low-speed vehicles cater to niche markets, requiring precision in sourcing, logistics and maintaining competitive advantages.
Machine Shop and Metal Fabrication: Businesses specializing in metal fabrication and machining services must prioritize operational efficiency and technological integration to stay ahead.

Here are some of the ways board members can help these businesses thrive:

Strategic Guidance

Board advisors bring a wealth of experience and insight that is critical for navigating the complexities of the global market. Their role goes beyond mere consultation; they actively participate in shaping the strategic direction of the company. By analyzing market trends, assessing competitive landscapes and identifying growth opportunities, these seasoned professionals provide actionable recommendations that align with the company’s long-term goals. Their foresight helps companies pivot in response to market changes, ensuring that strategic initiatives are both agile and grounded in solid market research.

Furthermore, board advisors facilitate strategic networking, connecting the company with potential partners, customers and industry experts. This role is particularly vital in an era where collaboration and strategic alliances can significantly accelerate growth and innovation. Through their extensive networks, board advisors open doors to new markets, technologies and talent, thereby enhancing the company’s capabilities and competitive positioning.

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Operational Excellence

Operational excellence is paramount in manufacturing, where efficiency, quality and speed are closely linked to profitability and customer satisfaction. Board advisors play a crucial role in promoting best practices in production, supply chain management and quality control. By leveraging their experience, they help identify areas for improvement, streamline processes and implement lean manufacturing techniques. This not only enhances productivity but also reduces costs, waste and inefficiencies, driving operational excellence throughout the organization.

In addition to process optimization, board advisors also emphasize the importance of innovation in operations. They encourage the adoption of advanced technologies and automation to improve manufacturing processes and product quality. Their guidance helps companies stay ahead of technological trends, ensuring that they remain competitive in an evolving industry. By fostering a culture of continuous improvement and innovation, board advisors help companies adapt to changing market demands and technological advancements.

Leadership Development and Mentoring

The success of any manufacturing company significantly depends on the strength and vision of its leadership. Board advisors invest time and resources into developing a robust leadership team capable of steering the company toward its strategic goals. Through mentoring programs, they share their knowledge and experiences, providing guidance on effective leadership practices, decision-making and strategy execution. This mentorship is invaluable for nurturing a generation of leaders who are not only skilled managers but also visionary thinkers with the ability to drive the company forward.

Moreover, board advisors play a key role in succession planning, ensuring that the company has a pipeline of talented leaders ready to take on key roles as the organization evolves. They help identify leadership potential within the organization, fostering a culture of growth and development. This proactive approach ensures that the company remains resilient in the face of change, with a leadership team that is well-equipped to overcome future challenges.

Financial Oversight and Risk Management

Board members provide critical oversight, ensuring that the company’s financial strategy is robust, sustainable and aligned with its overall strategic objectives. They oversee financial planning, investment decisions and risk management practices, offering insights that help optimize financial performance and shareholder value. Their expertise is crucial for capital allocation, funding for growth initiatives and financial risk mitigation.

Board advisors also play a pivotal role in identifying and managing risks that could impact the company’s financial health and operational stability. From market fluctuations and supply chain disruptions to regulatory changes and cybersecurity threats, they help develop comprehensive risk management strategies. This involves not only identifying potential risks but also preparing contingency plans and response strategies to minimize impact.

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Acquisition and Integration Advisory

As manufacturing companies seek growth through acquisitions, board advisors provide invaluable guidance. From identifying potential targets to conducting due diligence and negotiating deals, their expertise ensures that acquisitions are strategically sound and aligned with the company’s vision. They bring a critical eye to the evaluation of potential acquisitions, assessing not only the financial aspects but also the cultural and operational fit.

Post-acquisition, board advisors are instrumental in the integration process, ensuring that the transition is smooth and that the acquired company is effectively integrated into the larger organization. They help face the challenges of merging operations, cultures and systems, working to realize synergies and achieve the strategic objectives of the acquisition. Their experience in managing change and fostering alignment among stakeholders is crucial for maximizing the value of acquisitions and ensuring their success.

Regulatory Compliance and Corporate Governance

In the highly regulated environment of manufacturing, adherence to legal standards and best practices in corporate governance is non-negotiable. Board advisors ensure that the company not only complies with existing regulations but also proactively addresses emerging legal and ethical considerations. Their oversight is critical in maintaining the company’s legal standing, protecting its reputation and avoiding costly penalties and litigation.

Moreover, board advisors champion transparency, accountability and ethical conduct throughout the organization. They help establish governance frameworks that promote ethical decision-making, stakeholder engagement and responsible business practices. Their commitment to upholding the highest standards of corporate governance fosters a culture of integrity and trust, which is essential for sustaining the company’s long-term success and maintaining positive relationships with customers, employees and the broader community.

Board advisors are the linchpin in the strategic and operational fabric of manufacturing companies. Their roles extend beyond traditional governance, encompassing strategic planning, operational optimization, leadership development, financial stewardship and much more.

As the manufacturing industry continues to face rapid changes and new challenges, the insights, expertise and leadership of board advisors will remain indispensable for companies aiming to achieve excellence and sustainable growth.

BluWave’s research and operations team knows industry-specific candidates for your exact situation. Contact them for a scoping call and they’ll provide a short list of experienced options within a single business day.

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New Private Equity Podcast: ‘Best But Never Final’

January 30, 2024 Brad Gerick

For too long, the first word in private equity has been “private.” Douglas McCormick, Lloyd Metz and Sean Mooney are out to pull back the curtain and get real about private equity on the “Best But Never Final” podcast.

The program is designed to explore timely private equity topics and share seasoned perspectives on crucial areas of focus within the industry. Expect to gain valuable insights from McCormick, Metz and Mooney in this new podcast.

“Best But Never Final” is more than just a podcast – it’s a journey into the minds of private equity experts. Listeners will gain a deep understanding of how private equity professionals think and operate. For CEOs, the podcast is a guide on how to collaborate effectively with PE sponsors and leverage the private equity playbook to augment the value of their companies.

Check out the first episode here, which you can listen to on your favorite podcast platform.

Here are some of our other favorite private equity podcasts.

ALSO LISTEN: Karma School of Business Podcast

Meet the Hosts

Doug McCormick

Managing Partner and CIO at HCI Equity Partners

McCormick has nearly two decades of experience in the firm, specializing in creating significant value in lower-middle market companies.

Lloyd Metz

Managing Director at ICV Partners

Metz brings over twenty years of expertise in guiding companies at the lower end of the middle market to achieve their full potential.

Sean Mooney

Founder and CEO of BluWave

As a long-term private equity investor, Mooney has extensive experience as a deal team member and investment committee partner at a leading private equity firm.

Demand-Gen Resources for Tech-Software Companies

January 29, 2024 Brad Gerick

The tech-software industry is undergoing a transformative phase, marked by rapid innovation and fierce competition. Companies are not only challenged to continuously advance their technology but also to revolutionize their approach to market presence and customer engagement.

Central to this revolution is a strategic focus on digital marketing demand generation. Software companies leverage in-depth market analyses and cutting-edge digital strategies to deeply understand and effectively engage their target audiences. This approach is pivotal in shaping a tech company’s growth trajectory, impacting everything from user interface design to online customer experiences.

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In parallel, there’s an increasing shift toward refining and streamlining digital marketing operations. Tech companies are reevaluating their digital ecosystems, from lead generation methods to content marketing tactics, in search of efficiencies that not only optimize resource allocation but also amplify their market impact.

Let’s delve deeper into the specific digital marketing strategies that are shaping the future of the tech-software industry and are in high demand by companies striving to enhance their digital footprint and market share.

Elevating Brand Identity in the CRO Space

Brand identity goes beyond mere aesthetics; it’s about embodying the spirit of the ideal customer within your industry. This involves crafting a narrative that resonates with a technologically adept audience, emphasizing the transformative impact of your software solutions.

Crafting this narrative requires a blend of technological insight and consumer empathy, ensuring that every touchpoint reflects the forward-thinking nature of your brand. Outside resources who specialize in doing this on an industry-specific basis can save businesses time and money on this exercise.

Metrics and Benchmarking in Marketing

Delving into user interaction data, conversion rates and engagement metrics offers invaluable demand gen insights. For tech-software companies, this means not just tracking the numbers but interpreting them in the context of a changing digital landscape.

This approach allows for agile adjustments to marketing strategies, ensuring they remain aligned with evolving consumer behaviors and technological advancements.

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RevOps: Revolutionizing Internal Marketing Processes

RevOps must be about agility and foresight for software businesses. Integrating predictive analytics and machine learning can provide an edge, anticipating market trends and customer needs.

This strategic foresight enables tech organizations to stay ahead of the curve, aligning their marketing and sales initiatives with future market developments, thereby ensuring sustained relevance and growth.

WHITE PAPER: Is Your Business Ready for AI Tools?

Strategic Account-Based Marketing (ABM)

ABM is a strategic tool to connect with high-value prospects in a meaningful way. It’s about creating bespoke experiences that speak directly to the unique needs and challenges of each account.

In a landscape where software solutions are often highly specialized, this tailored approach ensures that marketing efforts resonate deeply with potential clients, fostering a sense of partnership and alignment with their technological aspirations.

Optimizing Lead Gen, Outsourced Sales Development

In tech-software marketing, lead generation is an intricate process of identifying and nurturing potential customers who are often highly knowledgeable and discerning. This involves not just casting a wide net, but also crafting targeted messaging that speaks to the specific needs and interests of a technologically sophisticated audience.

Outsourcing this important task means trusting in expert third parties who have done this for businesses like yours. They must not only have the requisite skills but also understand the unique challenges of demand generation for software companies.

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Leveraging e-commerce and Digital Marketing for SaaS

E-commerce in the tech-software industry isn’t just a sales channel; it’s a vital part of the customer journey.

Here, the focus is on creating a seamless, intuitive online experience that mirrors the efficiency and innovation of the software itself. In digital marketing, this translates to campaigns that are not only visually striking but also intellectually engaging, showcasing the software’s features and benefits in a way that captivates a tech-savvy audience.

Future Directions in Tech-Software Marketing

Looking ahead, the intersection of technology and creativity will continue to shape the future of digital marketing in the tech-software industry.

Emerging technologies such as AI, IoT, and advanced analytics are not just tools for development but also for crafting more engaging, personalized, and predictive marketing campaigns. This evolution promises a landscape where marketing strategies are as innovative as the software products they aim to promote, offering unprecedented opportunities for customer engagement and brand growth.

These strategies represent some of the ways technology software companies are using digital marketing tools to increase demand generation.

BluWave already knows the service providers or consultants that will best fit your situation before you even contact us.

When you’re ready to connect with a PE-grade resource for your portco or private or public company, our research and operations team is here. They’ll scope your need on a call and provide a short list of options within a single business day.

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Manufacturing Industry Growth Strategies for PE Firms, Portcos, Independent Companies

January 25, 2024 Brad Gerick

The manufacturing industry is evolving at an unprecedented pace. Today’s manufacturers are grappling with challenges that push them to rethink their growth strategies. This evolution is not just about adopting new technologies; it’s about reshaping the very foundations of how these companies operate and compete.

Central to this transformation is a renewed focus on the customer. Manufacturers are delving into sophisticated analyses to understand customer needs better and tailor their offerings accordingly. This customer-centric approach is the cornerstone of a long-term manufacturing strategy, influencing everything from product design to marketing.

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Alongside this customer focus, there’s a growing emphasis on optimizing internal processes and structures. Manufacturers are scrutinizing their operations, from labor strategies to financial systems, seeking efficiencies that can propel them into a new phase of growth.

Let’s explore in more detail the specific growth strategy tactics for which BluWave receives the most demand for private equity firms, portfolio companies and private and public companies in the manufacturing industry.

Voice of Customer (VOC) Analysis

Understanding customer needs and preferences is more vital than ever. As we head into 2024, manufacturers are increasingly turning to Voice of Customer (VOC) strategies. This approach isn’t just about gathering data; it’s about gaining a deeper understanding of customer expectations and experiences.

Identifying the right VoC service providers is a critical step in this process, enabling companies to align their products and services with the evolving demands of the market.

Value Creation Plan (VCP) Refresh

Refreshing the Value Creation Plan (VCP) has become a priority for portfolio companies. This involves a thorough review and update of the strategies that guide these companies. The focus is on discovering growth opportunities not only within existing markets but also in adjacent ones.

The enhancement of go-to-market strategies and other functional areas is crucial, with a particular emphasis on prioritizing initiatives based on their return on investment and the strategic investment period.

Labor Market Analysis and Relocation Strategy

The decision to relocate manufacturing operations is more than a logistical consideration; it’s a strategic move that can redefine a company’s competitive edge. Comprehensive labor studies are at the forefront of this decision-making process. These analyses delve into the intricacies of various labor markets, evaluating factors such as cost-effectiveness, availability of skilled labor and regional economic conditions. The goal is to find an optimal balance where operational efficiency meets cost management.

Supply chain dynamics, access to new markets and brand perception are other considerations. For instance, relocating to a region with a rich talent pool can significantly enhance innovation and productivity. But it also requires careful consideration of potential disruptions to existing supply chains and customer relationships.

ERP System Optimization

As companies in the manufacturing industry gear up for expansion, the optimization of Enterprise Resource Planning (ERP) systems becomes a pivotal factor. This optimization is more than a technical upgrade; it’s a strategic realignment of how a company manages its core processes and data. An effective ERP system serves as the backbone of a business, integrating various functions from supply chain management to customer relationship management.

The key to ERP optimization lies in its ability to provide real-time insights and streamline operations across departments. This allows for better decision-making, improved efficiency and more effective response to market changes. As companies aim to double their size and capacity, an ERP system’s scalability and flexibility become crucial. It must be capable of adapting to increased operational complexity and supporting new business processes as the company grows.

Financial Structure Enhancement

Enhancing finance functions is essential for companies looking to scale. This involves a comprehensive review and upgrade of financial operations, ensuring they are equipped to handle the challenges and opportunities of business expansion. An effective structure is the foundation of a company’s fiscal health, crucial for managing increased revenue streams, investments and expenditures that come with growth.

Companies also need to focus on developing robust financial strategies that support long-term growth objectives while maintaining financial stability. This may involve exploring new funding options, managing capital efficiently, and ensuring compliance with evolving financial regulations. A strong financial structure not only supports current operations but also positions the company for successful scaling and sustainable growth.

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Consulting for Residential Manufacturing

Narrow company types, like elevator production for example, exemplify the growing need for specialized consulting. These markets, often overlooked in broader industry analyses, present unique growth challenges and opportunities. Consulting expertise in these areas is not just about addressing immediate operational issues; it’s about carving a sustainable path forward, often through enhancing service and developing recurring revenue models.

This approach requires a deep understanding of the specific market dynamics and customer expectations. For instance, in elevator manufacturing, consultants might focus on aspects like safety standards, technological advancements and customer service excellence. They work to align these factors with effective business models that capitalize on recurring maintenance and service contracts, ensuring steady revenue streams.

Market Penetration Strategy

For manufacturers aiming to expand their market reach, a well-crafted market penetration strategy is key. This goes beyond simply increasing production capacity or diversifying product lines. It’s about gaining a deep understanding of the market – identifying key customers, understanding competitor strategies and pinpointing untapped opportunities. The goal is to develop targeted approaches that can effectively double distributor sales and enhance market presence.

Take, for example, manufacturers of in-demand products like wood slabs or ladders. The strategy here involves an in-depth analysis of market needs and preferences. Manufacturers must understand the unique requirements of professional users, adapting their products to meet these needs while differentiating themselves from competitors.

This could involve innovations in product design, improvements in material quality, or enhancements in customer service. The focus is on building strong relationships with distributors, understanding their challenges, and collaboratively working towards shared growth goals. This approach not only drives sales but also fosters long-term partnerships and brand loyalty.

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Product Portfolio Rationalization

For manufacturers, defining and rationalizing the product portfolio is a crucial step. This process, known as SKU rationalization, involves streamlining the journey from sales to manufacturing and delivery.

An integral part of this strategy is implementing and integrating the right software solutions for product lifecycle management.

Strategic Planning Facilitation

Strategic planning sessions typically span 1-2 days, serving as a catalyst for manufacturers to develop concise and effective strategies. The aim is not to overwhelm with complexity but to distill the essence of what will drive growth and innovation.

In these sessions, cross-functional teams come together to outline clear objectives, align on priorities and set actionable goals.

The focus of these strategic planning sessions often varies, ranging from broad discussions about market trends and competitive positioning to more specific topics like product development, operational efficiency or international expansion. Facilitators guide the discussion, ensuring that every voice is heard and that the conversation remains focused on tangible outcomes. This includes the use of tools and methodologies that encourage creative thinking and problem-solving, helping teams to break out of traditional mindsets and explore new possibilities.

Moreover, these sessions are an opportunity to reassess and realign with the company’s core values and long-term vision. They provide a platform for leadership to communicate and reinforce the company’s direction, fostering a sense of unity and purpose among employees. By the end of a strategic planning session, a manufacturer should have a clearer roadmap for the future – one that is adaptable yet focused, innovative yet feasible.

These strategies represent the diverse ways in which manufacturing companies are driving growth.

Each approach shares a common goal: to transform and elevate portfolio companies and private and public companies.

The BluWave research and operations team knows industry-specific growth strategy resources that are ready to help with your exact situation. Set up a scoping call today to get connected to a PE-grade service provider or consultant in less than a business day.

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Senior Advisors: How They Help in Healthcare Services Sector

January 23, 2024 Brad Gerick

Senior advisors are a valuable resource to healthcare services companies. This sector, characterized by its rapid advancements and regulatory intricacies, demands a level of expertise and insight that only experienced professionals can provide.

Understanding regulatory compliance and evolving market trends requires not just knowledge, but a depth of specialized experience that shapes effective strategy and decision-making. It’s no wonder that senior advisors are consistently among the most-requested due diligence resources in the Business Builders’ Network.

Some of the more common businesses we serve in this industry include veterinary services, dental practices and specialty practices. These companies seek advisors with a blend of clinical knowledge and business acumen.

They are instrumental in identifying opportunities for growth, mitigating risks and steering through the complexities of mergers and acquisitions, market consolidation and technological innovation.

At BluWave, we understand the pivotal role these experts play. Let’s talk in more detail about how senior advisors can help your healthcare services business.

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Real-World Senior Advisors Scenarios

Senior Advisors serve pivotal roles, from guiding through due diligence processes to offering board-level strategic guidance. Their industry-specific knowledge is irreplaceable.

Help in Gastro Space

Companies in the gastro space need senior advisors who not only understand the clinical aspects of their operations but also have a deep grasp of the business and M&A dynamics. This kind of dual expertise is what makes this resource so valuable in scenarios like understanding the consolidation trends in private practices and health systems.

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Clinical Engineering Advisors

Another example might be a clinical engineering project, focusing on due diligence and potential board advisory roles. Clients come to us in this situation when they need expertise in evaluating business growth potential and identifying opportunities for M&A.

Support for Dental Practices

Dental practices often need senior advisors with experience in dealing with consolidating markets. We facilitate this by identifying candidates who not only have the relevant experience but could also provide strategic insights into market dynamics.

These cases show just how important industry-specific knowledge is in healthcare services. Whether seeking help with diligence or bringing on a senior advisor who can assist with post-closing board membership, BluWave is familiar with every scenario.

Our method in connecting clients with senior advisors is comprehensive and tailored to specific industry needs. We leverage our vast network, ensuring a precise match between the client’s requirements and the advisor’s expertise.

Having access to the right senior advisor is crucial. These experienced professionals are their businesses’s anchors in understanding and leveraging market trends, navigating complex transactions and making informed strategic decisions.

To learn more about what BluWave and its network of senior advisors can offer, set up a scoping call with our research and operations team. They’ll assess every detail of your needs and provide you with a short list of situation-specific options within a single business day.

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Digital Marketing Demand Generation: Challenges, Solutions in Consumer Products Sector

January 18, 2024 Brad Gerick

Digital marketing isn’t just about being online anymore; it’s about making a significant impact where it matters.

At BluWave, we have seen firsthand the unique challenges businesses in the consumer products industry face. From navigating Amazon marketplace intricacies to tackling eCommerce optimization, the demands are as real as they are varied.

Let’s dive into these challenges and explore practical solutions.

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eCommerce Ownership Transitions: Amazon Business Transfer

Transferring an Amazon business account is like passing a baton in a relay race; it needs precision. Timing is crucial, and there’s always a fear of dropping the goodwill you’ve built up. When it comes to asset vs stock deals, each has its pros and cons.

An asset deal can be cleaner, transferring only what you need. A stock deal, however, might maintain the business’s continuity better. The key is to understand your priorities and choose accordingly.

Unauthorized Reselling and Price Disputes

Picture this: an unauthorized reseller undercuts your Walmart.com listing, and now Amazon is knocking on your door to lower your prices. It’s a frustrating domino effect.

The solution isn’t straightforward but starts with strong policies and enforcement. Knowledgeable experts in this field can guide you in setting up these safeguards, ensuring your pricing strategy stays intact across platforms.

READ MORE: How To Raise Prices Strategically

Shopify and Beyond: Optimizing eCommerce Platforms

A Shopify site not meeting expectations is a common tale. The gap often lies in specialized skills, or the lack thereof. eCommerce optimization isn’t just about a pretty storefront; it’s about driving traffic and conversions through targeted search engine and social media strategies.

Bringing in a fractional eCommerce manager could be your game-changer, offering the expertise needed to optimize your site and expand your presence on other marketplaces.

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Amazon for Global Expansion: A Focused Approach

Expanding globally through Amazon is like finding a new world of opportunities. But it’s not just about being there; it’s about making a mark. Balancing SEO efforts with advertising strategies is key.

Unlike generalist approaches, a focused expertise on Amazon can navigate the nuances of global expansion, optimizing your time and effort for maximum sales impact.

Brand Awareness and Retention: Creating the Flywheel Effect

High retention but low awareness – this scenario is more common than you think. The trick is in flipping this to your advantage. Improving awareness can kickstart a “flywheel effect,” leveraging your strong retention rates.

The right strategies in place, matched with periodic, economical tracking, can turn this potential into a revenue-generating reality.

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Evaluating Digital Marketing Tactics: Beyond the Basics

eCommerce exposure is half the battle; the other half is understanding your digital marketing tactics. Are you making the most of your SEO? How effective are your PPC campaigns? Understanding these aspects is crucial in converting visitors into loyal customers.

External experts can offer fresh perspectives, assessing your current strategies and pinpointing areas for improvement.

Digital marketing in the consumer products industry is not a one-size-fits-all scenario. It’s a complex puzzle that requires understanding, skill, and sometimes, a helping hand.

At BluWave, we specialize in connecting businesses with the resources they need to tackle these challenges head-on. Whether it’s transferring an Amazon business, managing online marketplaces or optimizing eCommerce strategies, we’re here to ensure your digital marketing efforts are as effective and impactful as possible.

Set up a scoping call with our research and operations team, and they’ll provide a short-list of PE-grade, exact-fit options in less than a business day.

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Operational Due Diligence: Essential Checklist for Manufacturing Industry

January 16, 2024 Brad Gerick

Operations diligence is a critical component of the acquisition process for private equity firms. Especially in the manufacturing sector.

BluWave works with PE firms regularly to connect them with industry-specific resources to analyze their portfolio company targets.

The following operations diligence checklist for the manufacturing industry is based on the myriad conversations we have had requesting this service. It’s designed to get you thinking about the crucial steps in your operations diligence process, giving you confidence in your investment.

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Understanding the Manufacturing Process

Grasping every detail of the target company’s manufacturing process is essential. In evaluating a CNC shop, for instance, it’s crucial to analyze both the current state and potential future needs of manufacturing technologies and methodologies.

READ MORE: What is Commercial Due Diligence?

Evaluating Supply Chain Efficiency and Risks

Analyzing the supply chain’s efficiency and identifying potential risks are imperative. Consider the example of an air distribution and ventilation solutions manufacturer, where a detailed assessment of the supply chain could reveal opportunities for optimization and risk reduction.

Assessing Management, Governance

The leadership and governance structures of a target company can greatly influence its success. In sectors like aerospace and defense manufacturing, where precision and compliance are paramount, this evaluation becomes even more critical.

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Regulatory Compliance, Risk Management

Ensuring adherence to industry regulations and effective risk management strategies is essential. In industries like engineered filtration solutions manufacturing, where compliance is complex, this step is critical to avoiding future legal and operational challenges.

Capex, Maintenance, Asset Integrity

Investigating a company’s capital expenditure and maintenance practices reveals much about its potential for sustainable growth. For a beer contract manufacturer planning an acquisition, this could mean a thorough analysis of their investment in equipment and facilities.

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Customer-Supplier Relationship Analysis

The strength of a company’s relationships with its customers and suppliers often reflects its market position. In the industrial services and hydroexcavation business, for instance, the nature of these relationships can be indicative of both current performance and future potential.

Environmental, Sustainability Practices

A company’s approach to environmental impact and sustainability is not just a regulatory concern but also a reflection of its long-term strategic thinking. In the beverage manufacturing sector, evaluating sustainability practices, such as waste management and energy usage, provides insights into the company’s commitment to future-proof operations.

Operational Improvement Opportunities

Identifying areas for improvement in operational efficiency can significantly enhance the value of an investment. Examining a company like an air distribution and ventilation solutions provider offers a chance to pinpoint areas where operational enhancements could drive growth and profitability.

Integration and Post-Acquisition Strategy

Successful post-acquisition integration is crucial for realizing the full potential of an investment. For a company involved in T&D power equipment manufacturing, understanding how to integrate multiple companies smoothly is key to preserving value.

Site Visits, On-Site Evaluations

Conducting physical site visits provides invaluable insights into the operational realities of a manufacturing facility. An on-site evaluation, especially in a foreign manufacturing setup, is essential for a comprehensive understanding of operational practices and potential improvement areas.

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Special Considerations for International Operations

Navigating the complexities of international manufacturing operations requires a keen understanding of local contexts and challenges. For instance, managing a facility move in a foreign country, particularly in sensitive industries like pharmaceuticals, demands specialized knowledge and meticulous planning.

BluWave’s relationships with operations diligence firms is a vital asset for private equity firms embarking on manufacturing acquisitions. Our deep understanding of the manufacturing sector, combined with a network of seasoned professionals, positions us to provide unparalleled support and insights. With BluWave, you can confidently navigate the complexities of operations diligence, uncovering the true potential of your investment.

Whether you’re in the early stages of considering an acquisition or deep into the diligence process, BluWave is your go-to partner. Reach out to our research and operations team for expert guidance and support, ensuring your operations diligence is comprehensive, insightful and a solid foundation for your investment’s success.

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Procurement, Sourcing Resources for Manufacturing Industry

January 12, 2024 Brad Gerick

Procurement and sourcing are critical components of manufacturing operations, directly influencing efficiency and cost-effectiveness. Fleet diligence, distribution assessment and supply chain management are among the more popular use cases BluWave sees.

We frequently field procurement and sourcing project requests from the manufacturing industry, giving us a deep understanding of the service providers that are best-suited to help private equity portfolio companies as well as private and public companies with these challenges.

Here are some of the top procurement and sourcing use cases and how they can help your business.

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Fleet Diligence/Assessment

Effective fleet management is crucial for optimizing logistics and controlling costs. By regularly assessing fleet operations, manufacturers can uncover potential savings and improve transportation efficiency, which is essential for timely product delivery and overall operational agility.

READ MORE: What is Procurement & Sourcing?

Distribution Assessment

The efficacy of a distribution network plays a pivotal role in meeting customer demands and maintaining product flow. Thorough assessment of this network allows manufacturers to identify bottlenecks, streamline processes and enhance the speed and reliability of product deliveries.

Construction Diligence

Construction diligence ensures that manufacturing facilities meet all necessary standards and contribute to efficient production lines. This aspect covers everything from initial design to ongoing maintenance, directly impacting the effectiveness and safety of manufacturing operations.

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Asset Integrity Diligence

Maintaining asset integrity is vital for ensuring consistent production quality and avoiding costly downtimes. Regular checks and balances help in early identification of potential issues, enabling timely interventions and prolonging the life span of manufacturing assets.

Clinical Trial Operations Diligence

For manufacturers in the pharmaceutical sector, clinical trial operations diligence is key to ensuring product efficacy and safety. This process involves rigorous testing and compliance with stringent regulatory standards, directly impacting the success and credibility of products in the market.

Safety Diligence

Prioritizing safety in manufacturing not only fulfills regulatory requirements but also fosters a responsible workplace culture. Implementing rigorous safety protocols and regular training sessions can significantly reduce workplace accidents and enhance overall productivity.

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Process Mapping

Process mapping identifies inefficiencies in manufacturing operations, offering insights for improvements. By analyzing each step of the production process, manufacturers can make informed decisions to streamline operations, reduce waste and optimize resource allocation.

Facility Planning

Strategic facility planning is integral to maximizing production efficiency. It involves optimizing the layout and design of manufacturing spaces, ensuring that every element from machinery placement to workflow is conducive to peak operational performance.

Manufacturing Industry Resources

Packaging Diligence

In manufacturing, the importance of packaging extends beyond aesthetics to include functionality and protection. Ensuring the right packaging materials and designs can significantly reduce damages during transit and enhance customer satisfaction.

Supply Chain Diligence

A robust supply chain is essential for maintaining manufacturing momentum. This can be improved by supply chain optimization, focusing on vendor management, inventory control and contingency planning to handle disruptions effectively.

Procurement and sourcing are essential to manufacturing businesses. By working with experts who understand their business, manufacturers can enhance their operational efficiency and reduce costs that give them a competitive edge.

“You can engage a firm that can take out costs of your business for non-core expenditures,” BluWave Co-Head of Research and Operations Scott Bellinger says. “The beauty of it is these groups work off of a gain-share model, so they have an incentive to help you save money.”

BluWave’s research and operations team is here to connect you with specialized manufacturing resources. Set up a scoping call and you’ll get a short list of PE-grade option in less than one business day.

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IT Due Diligence: Technology, Software Industry

January 9, 2024 Brad Gerick

When a private equity firm is evaluating an acquisition target, they perform thorough due diligence before making any decisions.

One part of the due diligence process that tends to come later in the process is information technology (IT) due diligence. While important in any industry, this practice is particularly apropos for companies in the technology software industry.

“For companies that have kept up, they can have a significant competitive advantage,” BluWave Head of Technology Houston Slatton says. “But for companies that haven’t embraced technology or managed it well, it can become a liability or a risk to their operations.”

READ MORE: What is Commercial Due Diligence?

Due Diligence for Software Companies

What is the IT Due Diligence Process?

Here are the top-level steps involved with IT due diligence:

Preparation
Information Gathering
Asset Evaluation
Contract Review
Risk and Opportunity Identification
Recommendations

READ MORE: What is IT Due Diligence?

IT Due Diligence for Technology Software Companies

Here are how each of those steps could apply to due diligence being conducted on software companies:

Information Gathering

Gathering information is a rigorous process involving deep dives into the software’s architecture, databases and development practices. This phase assesses the company’s technical assets and the quality of its codebase, exploring aspects like scalability, maintainability and technical debt.

Asset Evaluation

In asset evaluation, the focus shifts to the software itself. What is the state of the product’s lifecycle? Are the technologies used up-to-date and supported? The evaluation also reviews the company’s intellectual property portfolio for patents, trademarks and copyrights that protect its innovations.

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Contract Review

The contract review scrutinizes agreements with customers, vendors and partners. For software companies, this could involve licensing agreements, open-source software dependencies and third-party integrations that are essential for the company’s products and services.

Risk and Opportunity Identification

Identifying risks requires an understanding of the regulatory environment, especially for data privacy and security. What are the potential compliance liabilities? Conversely, where are the opportunities for innovation or market expansion? This step often reveals how IT can be a growth enabler or a liability.

“If you don’t use the tools well – if you don’t maintain them – a good IT diligence report is going to highlight those issues, but also will highlight those as recommendations or opportunities to drive value in the business post-close,” Slatton says.

READ MORE: How To Hire an Interim CTO

Recommendations

The final recommendations are a strategic mix of immediate actions and long-term plans. For a technology software company, this might include advice on enhancing security, improving system integration or investing in new technologies to keep the company ahead of the curve.

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The IT due diligence process is integral to understanding the true value of a technology software company. It’s not just about identifying what works and what doesn’t – it’s about uncovering how the technology can drive the company forward.

Private equity firms that don’t perform thorough IT due diligence may find themselves facing unforeseen challenges down the line. But those that prioritize this step can use it to guide their investment strategy, uncover new opportunities, and ultimately, ensure that their acquisition is set up for success in the rapidly evolving tech landscape.

READ MORE: Why Mergers & Acquisitions Fail

For expert guidance through the IT due diligence process, reach out to BluWave. Our research and operations teams can connect you with the best IT due diligence experts in the industry, handpicked for your situation.

“The specialized providers in the Business Builders’ Network have in-house employees who focus on doing these types of assessments for investors,” Slatton says. “They’re seasoned technology professionals who know how to quickly assess an organization through the lens of private equity firms and other acquirers.”

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Portcos Show Outsize Growth Among Inc. 5000 Awardees

December 1, 2023 Brad Gerick

Private Equity and the American Economy

The private equity industry has been a vital component of the American economy for years. PE firms invest in companies to improve their businesses and increase their value.

BluWave, the Business Builders’ Network serving the world’s most proactive business builders, analyzed the 2023 Inc. 5000 list of America’s fastest-growing companies to understand the role the private equity industry is playing among those organizations.

BluWave’s analysis revealed that more than 550 private equity-backed companies were recognized in the Inc. 5000, growing exceptionally fast and contributing extraordinarily to job growth.

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A Major Representation

The private equity industry played a meaningful role in the growth and development of Inc. 5000 awardees with approximately 11 percent – or more than 550 of the Inc. 5000 – of the companies on the list being backed by private equity.

The 11 percent of the Inc. 5000 list that is PE-backed accounts for 558 companies.

HCI Equity Partners, a leading lower-middle market private equity firm headquartered in Washington, D.C., serves as an example of one such PE firm. HCI had four of its portfolio companies recognized on the Inc. 5000 list.

These companies provide valued products and services to the food, preventative maintenance, protective gear and hospitality markets. The diversity of industries represented also illustrates the wide range of end markets benefiting from private equity investments.

“We are immensely proud to have four of our portfolio companies recognized in the Inc. 5000,” said Doug McCormick, Managing Partner and Chief Investment Officer at HCI Equity Partners. “It’s a privilege to support the growth and development of such amazing businesses, while providing value to our stakeholders and creating jobs that are built to last.”

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Exceptional Growth

BluWave’s analysis also found that private equity-backed companies grew remarkably fast, with an average growth rate of 480 percent in total revenue over the three-year review period.

BluWave’s ongoing series of Private Equity Insights Reports have revealed that the PE industry has been able to fuel significant growth in large part due to the industry’s meaningful provisioning of strategic resources. This helps their portfolio companies expand in more accelerated, predictable and confident ways. BluWave’s Q3 2023 Insights report highlighted that more than 75 percent of all projects conducted by the private equity industry in 2023 were related to creating value in their portfolio companies.

“Through thoughtful partnership, HCI has added value across multiple areas of our organization,” said Scott Milberg, CEO of AmerCareRoyal. “In addition to providing access to capital and strategic support, the operational engagement they provide helps us deliver transformational initiatives successfully and accelerate our growth.”

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A Major Job-Creation Engine

The influence of PE-backed companies extends beyond revenue growth; they are also significant contributors to job creation.

The BluWave analysis found that private equity-backed Inc. 5000 companies added more than 800,000 jobs over the past three years. While these companies represent approximately 11 percent of the Inc. 5000, they accounted for 64 percent of the 1.2 million jobs added by Inc. 5000 awardees over the past three years.

Furthermore, these companies have been instrumental in bolstering sectors crucial to the U.S. economy, such as software, business products & services, health services, and IT services, adding more than 130,000 jobs in these sectors alone.

BluWave’s Private Equity Insight reports have revealed that the PE industry has invested heavily in human resources over the past several years. The data shows that human resources has been the number-one focus area in private equity in each of 2019, 2020, 2021, 2022 and YTD 2023. The Q3 2023 Private Equity Insights report showed surging human resources activity, with approximately 50 percent of all projects in Q3 2023 related to human resources. The report also illustrated that four of the top five value creation use cases related to building and improving their portfolio company teams. A copy of the latest report can be requested here.

“We’re not surprised by the job-creation insights highlighted by our analysis. We see every
day how private equity firms focus on building great teams with long-term success in mind,” BluWave founder and CEO Sean Mooney said. “It’s fascinating getting a front-row seat as we help them build and grow.”

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Portco Collaboration Significantly Boosts Project Success Rates

November 28, 2023 Brad Gerick

An analysis of BluWave’s propriety data reveals that having a portfolio company stakeholder present during the project scoping and service provider-selection process meaningfully increases the likelihood of a private equity firm’s project moving forward. It also improves overall satisfaction with outcomes.

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More Likely To Proceed

BluWave’s analysis of more than 1,500 private equity firm projects shows an 80 percent increase in the likelihood of a portfolio company moving forward with the PE firm’s desired initiative.

This data indicates that a portfolio company is twice as likely to align with the private equity firm’s objectives if a portco decision-maker is involved during the project’s scoping and service provider-selection process. This holds true across industries, company sizes and service types.

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Better Outcomes

The 80 percent overall increase in project progression also leads to better and more satisfying outcomes for both the private equity firm and portfolio company.

In post-engagement surveys, overall satisfaction rates also increased by 5 percent when a portco contact was involved in the project scoping and service provider-selection process. This increase in satisfaction is based on overall project rating scores capture by BluWave.

Set up a scoping call with our research and operations team – and make sure to invite your key portfolio company stakeholders – and they’ll provide a short list of exact-fit resources within 24 hours.

Making Life Easy for Human Capital Leaders

November 17, 2023 Brad Gerick

BluWave understands the urgency and sensitivity around the work human capital executives perform. That’s why we provide a curated suite of resources specifically designed for HR leaders to drive unprecedented value in their organizations.

CASE STUDY: Diversifying Talent in a Digital-First Consumer Products Startup

Our Business Builders’ Network not only understands your unique challenges but also provides tailored, bespoke solutions for talent leadership.

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CASE STUDY: Controller with Leadership Skills for Resilient Growth

From specialized recruitment that targets niche roles to interim leadership that ensures your business doesn’t miss a beat during transitions; from mid-level staffing strategies that fortify your organizational structure to outsourced HR services that let you focus on core business functions — BluWave already knows the third-party service provider or consultant you need.

You can learn more about these services in this one-pager we prepared for talent leaders.

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Set up a scoping call with our resources and operations team, and they’ll connect you with a select list of exact-fit resources within a single business day.

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