CASE STUDY: STRATHCONA HEALTH SOCIETY

THE CLIENT
Strathcona Heath Society (SHS) is a charitable non-profit society that operates Strathcona Community Dental Clinic. The clinic provides quality dental services to low income families. The clinic is focused on providing dental services to children in the inner city of Vancouver. Their first clinic has been in operation for over nine years, successfully serving and changing the lives of thousands of patients.

THE CHALLENGE
SHS is proposing to develop a second not-for-profit dental clinic in the Hastings and Nanaimo area of East Vancouver that will offer similar services targeting low income families, children and Aboriginal patients. In order to facilitate the development of this new facility, SHS required a compelling business plan to engage potential funders and other key stakeholders.

THE APPROACH
SHS engaged an Osborne Principal as the Project Leader to define the objectives, scope and deliverables for this key strategic project, working in collaboration with SHS’s Executive Director Stephen Learey. Additional associates formed the multi-disciplinary team required to develop the key project deliverables including a detailed financial and operational analysis of SHS’s business model. Project management best practices were leveraged to ensure that the project was delivered on schedule and on budget while minimizing risk to the client.

THE RESULT
The project was completed on budget, with all of the project’s deliverables, including a comprehensive business plan and a supporting PowerPoint presentation, approved by the client. SHS’s objective to open a new dental clinic in East Vancouver will positively impact a currently underserved community.

BUSINESS VALUATION & SELLING YOUR BUSINESS IN THE POST 2008 ECONOMY

When it comes to selling your business, the most important question one needs to ask is: How much is my business worth? The concept that a business is worth whatever someone is willing to pay for it is commonly held, but is also naïve.

There is no precise way to value a private business. The seller wants maximum return and the buyer wants to drive the price down to maximize the return on investment. There truly are many measurable ways to value certain parts of the business with items such as inventory, fixed assets (land, building, machinery/equipment, etc.) and reputation of the company. In most cases, it will come down to how keen the buyer is to acquire the business and how good the seller is in marketing the intangibles. The complexity of the process requires a holistic approach. Traditionally, banks have embraced the philosophy "that cash flow and client base have no value because the customer base can evaporate and they aren’t required to do business with you". However, businesses that are expanding with increasing revenues, cash flow and possess significant client lists are valuable to potential buyers and must be considered in the valuation.

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CAPITAL ACQUISITIONS - ANOTHER ROLE FOR INTERIM MANAGERS

Recent experience with a client has brought another area into focus where the role of the interim manager provides a good fit with the needs of small and medium-sized enterprises. As with my client, many business owners are looking at the need to replace, upgrade or add equipment in an effort to enhance labour productivity, control costs, improve quality or expand marketing opportunities. With the Canadian dollar providing a consistently strong exchange rate and interest rates remaining low, many businesses realize this is a good time to invest.

That being said, the decision to undertake new equipment investment is fraught with uncertainty. Is this the right machine? Will I get the results I’m looking for? Can I afford to do this? Can I afford not to do this? Is it a good time to take on more debt? Where’s the payoff? Laying out large capital expenditures for equipment purchases is often very uncomfortable for small and medium-sized businesses, many of which lack the required expertise and experience among their small management staffs to provide appropriate decision support in this situation. Nor is it a wise move for companies in this bracket to add to company overhead by recruiting and retaining a full-time executive to deal with these often widely separated, albeit crucial, investment decisions.

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RECOGNITION, REWARDS AND RESULTS

Recently I was engaged in an online blog about employee reward schemes and my professional experiences. The originator of the inquiry was wondering how to compensate employees for their ideas and performance. The discussions were varied and the suggested approaches interesting. 

Always there is the argument of financial reward and if it is necessary beyond the non-monetary recognition programs. Some contributors were adamant that it should be considered part of doing a good job and no special consideration was warranted. Some felt that a TQM process or a Six Sigma approach was the Holy Grail and for them it may well be the case. They failed to mention that those programs can include recognition and reward components.    

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THE HIDDEN POTENTIAL IN ANY ORGANIZATION

When an organization isn’t achieving its revenue potential, the worst case scenario may be that it is meeting its goals and is nicely profitable. That’s because much of the management team charged with growth is "comfortable". They are dealing with what they see and know and are more obsessed with validating their business/marketing plan than they are questioning its validity in today’s marketplace. If there is no challenge from ownership to improve, nothing will change.

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