How clear is your company’s BHAG? Are you the best person to run the day-to-day operations of your company? Today’s episode is a perspective shift as we speak to Ron Alvesteffer, the key employee behind massive culture and fiscal shifts at Service Express, who took the company from $2.8 million to $240 million. Ron highlights the importance of a clear BHAG and how it aligns the company’s strategic plan, financials and core values. He shares how trusting your staff to do the jobs you hired them to do and the impact training future owners, not just employees, has on your bottom line. This is not one to miss if you’re looking for a practical way to implement systems and processes that will bring a higher valuation and greater corporate culture to your enterprise.
What You Will Learn In Today’s Podcast Interview
The importance of clarifying and executing on your BHAG (big hairy audacious goal)
How Service Express maintains double-digit growth almost every year
Why the mindset Ron had as the president and non-owner helped him focus on growing enterprise value
The importance of getting clear on what you want, where you’re going and what you’re willing to do to get there
How having his founder mentor him set the bar for Ron getting all of his staff to think like business owners
What Ron learned the first time they tried to exit the business
Why you should stop working hard in the business and instead work on it
What each round of private equity financing did (and didn’t do) for his business
Why the business chose not to bring in a strategic buyer or an operating partner when looking for growth opportunities
How to identify and categorize your needs as a seller so you can rate potential buyers
The value of understanding the size of your market opportunity, how you position against competitors, and getting clear on your strategy, plan and financial projects
What impact repeatable processes and systems without customer or location concentration has on valuation
How to grow your staff to be capable of the jobs you trust them with
Are your company’s current initiatives intentionally designed to increase the value of the business?
Do you know what you want from your business long term and why?
Do you know what your company is worth?
Do you know the differences between Management, Family Transitions, PE Firms, ESOPs and Strategic Buyers?
Does the business have a written strategic plan on how to achieve the desired normalized EBITDA and valuation?
About the Guest:
Ron Alvesteffer is the President and CEO of Service Express, which sells service contracts to finish server, storage and networking gear in large, corporate data centers. Since 2001, the company has averaged double-digit growth that Ron attributes to the unique corporate culture called The Service Express Way. Ron’s passion for ongoing education and building better leaders extends past his work day as he speaks to companies and organizations about leadership development and building winning workplace cultures. He has served as both the Chapter Chair and the Education Chair for the Young Presidents’ Organization (YPO), and he’s also on the board of the Spectrum Health Foundation.
07:05 - “You can get a degree in sales. There was none of that when I was starting in the 90s. Business was either marketing or accounting and finance. It wasn’t sales, right?” – Ron Alvesteffer
11:32 - “Standardized everything, brought in training and taught the team and things just took off from there.” – Ron Alvesteffer
11:54 - “No one has an instinct for hiring.” – Ron Alvesteffer
13:34 - “I think you should name me president and just be an investor; let me run the company.” – Ron Alvesteffer
18:37 - “What’s the goal and does everybody have a shared goal?” – Ron Alvesteffer
21:05 - “The longer we talked, the terms got worse.” – Ron Alvesteffer
28:45 - “The right private equity investor will buy into what your vision and strategy.” – Ron Alvesteffer
33:30 - “There’s a difference between people who spend time wanting to know the people and the culture and thinking about how not to disrupt that going forward, backed up by reference calls and checks to their firms to make sure they’ve demonstrated that they have done that.” – Ron Alvesteffer
41:45 - “If we’re going to accelerate investment here in years one and two, when does that investment pay out? What’s the projection for that and then measure against the projection so you know if you’re working or not.” – Ron Alvesteffer