9 Essential Points for Conducting Effective Management Calls in SMB Acquisitions 📈
Here are 📞💼 9 Essential Points for Conducting Effective Management Calls in SMB Acquisitions 💬📊
1. Brief Overview of the Business History
- Company Background / Management History: Provide a general history of the company and highlight any recent or key inflection points.
- Primary Revenue Streams: Identify and discuss the main sources of revenue.
- Current Business Performance: How is the business doing today?
2. Management Team / Owner and Employee Structure
- Owner Roles: Understand the owner’s involvement in daily operations.
- Accounting Team: Overview of responsibilities, structure, and day-to-day bookkeeping processes.
- CPA Role: Clarify the CPA’s role and involvement.
- Key Personnel: Identify significant recent changes in management or key departures.
3. Revenue & Accounts Receivable (AR)
- Top Customers: Who are the primary customers, and what portion of revenue do they represent?
- Customer Trends: Discuss any significant new or lost customers in the last three years.
- Sales Rebates/Discounts: How are these accounted for?
- AR Practices: How are customer collections handled?
- Payment Terms: What are the typical customer payment terms?
4. Employee Matters
- Benefits: Does the company offer benefits (e.g., health, dental, 401k)?
- Worker Status: Are employees W-2 or 1099 contractors?
- Compensation Plans: Any bonus or commission plans in place?
- Severance/Bonuses: Were there any one-time bonuses or severance payments in the last 24–36 months?
5. Property & Equipment (PP&E)
- Recent Activity: Major additions or retirements in the last three fiscal years.
- Future Needs: Are there any expected capital expenditures required to support the business in the next 12–24 months?
6. Vendor Matters
- Key Vendor Relationships: Overview of critical vendor relationships and payment terms.
- Contracts: Are there any contractual agreements with vendors?
- Rebates: Are rebate programs offered by vendors?
- Payment Terms: Trends in Days Payable Outstanding (DPO).
7. Additional Questions & Other Matters (Part 1)
- Litigation: Are there any pending or threatened lawsuits?
- Related Party Transactions: Any transactions with related parties?
- Contract/Relationship Changes: Are any significant changes expected in the next 3–12 months?
8. Additional Questions & Other Matters (Part 2)
- One-Time Revenue/Expenses: Any non-recurring revenues or expenses?
- Personal Expenses: Has the company paid for personal or owner-related expenses?
9. Final Note on the Importance of Management Calls
Every acquisition should include at least one in-person or Zoom management call.
- Why? These Points for Conducting Effective Management Calls often uncover material items that are not mentioned in the CIM or company-provided documentation.
