i
1

Who Is Diligent

We Are Diligent

Jim Grebey PhotoDiligent specializes in operations management and is dedicated to improving the sustainability of its clients business by improving the businesses operations infrastructure. Whether you are a business owner trying to mature your business or an investor trying to assess operations risk, Diligent can help you.

Why Are We Here

Most businesses have a trusted attorney and CPA they rely on when they need specialized legal or financial advice but who do they call when they need advice to improve their operations? Diligent is there for you. The same is true for investors trying to perform an effective due diligence. Most investors rely on their attorney and CPA to perform legal and financial due diligence but they do a poor job when performing an operations assessment. We have literally written the book on effective Operations Due Diligence following ourproprietary approach to operations risk management.

What Do We Do?

Since business operations don't follow established practices like law and accounting, there are few operations standards to measure the operational maturity of a business. Diligent has developed 400 operations touch points intended to identify potential risks and opportunities. We help our clients improve the sustainability of their business by mitigating risk and capturing opportunities.

How We Work

We use our proprietary operations assessment approach to improve the operations infrastructure of the business, making it operate more efficiently and profitably and helping it manage the risks all businesses face. By managing risk we help businesses prioritize limited process improvement resources.

Drop me a note at jfgrebey@diligentconsulting.com

Follow me: @Grebey on Twitter

2

Business Services

Founded in 2001, our goal has been steadfast..

We help businesses succeed by improving their operations infrastructure. Diligent is a full service operations management firm. The Diligent team has over 100 years of management experience serving businesses and investors alike. Diligent can help you with short term problem resolution or with long term infrastructure development and coaching.

If you’re an investor, Diligent can perform your operations due diligence or resolve problems in your portfolio. If you’re a business owner, Diligent can help you position for an investment. We have been on both sides of the deal table and we understand that a deal closing is not an endbut a beginning. Diligent brings innovative solutions that help our clientsincrease the value and sustainability of their business.

Our service, expertise and integrity separate us from our competitors and have led to long term relationships with our clients. By placing your needs first and treating your business as we do our own, we build customer satisfaction Based on confidence and trust.

Operations Risk Assessments

Operations Business ServicesAre you afraid of what you will see when you look in the mirror?
Many businesses fail to understand the benefits of performing proactive operations risk assessments.

Do any of the following sound familiar?

  • Organic Operations Risks – Have you ever wanted to ask; “why do we do this this way?” and know the answer is going to be; “I don’t know, it’s just the way it’s done.”
  • Market Risks – Your new product is about to be released. “We were so busy we didn’t recognize that the market had shifted until it was too late to recover.”
  • Hero Employee Risks – What could be wrong with an employee who goes above and beyond and always volunteers? “She was the best employee we had.” “We didn’t know what to do when she resigned.”

This is just a small sample of operations risks that could impact the sustainability of a business. If you don’t identify risks early, you can’t avoid or mitigate them and eventually they may disrupt your operations. Diligent Operations Self Assessment Training and Independent Operations Assessments examine 400 operations infrastructure touch points. So go ahead… look in the mirror. You might not like what you see but at least you’ll know where all the warts are! An operations assessment may be your least expensive form of insurance and the fastest way to optimize the efficiency of your operations.

Ask us about 1 Day and 3 Day Operations Self Assessment training sessions.

3

Business Transaction Services

Jim Grebey is a licensed sales agent and “Buy Side” specialist who assists clients with the development of effective merger and acquisition strategies and quality acquisitions. When your business plan calls for growth through strategic acquisitions, look to the combined resources of Diligent and Acquivest for confidential target list research and for the identification and assessment of candidates that can fulfill your strategic market needs, close operational deficiencies and add revenue streams.

Rely on our team for all your transaction service needs including confidential searches, due diligence, target valuation and help with every step of the transaction. And of course, we can also help you when you are ready for an exit.

Acquivest

4

About Jim Grebey

Jim Grebey is a “hands on” business operations analyst who has worked "in the trenches" helping owners build sustainable business and grow winning teams. He has implemented winning growth strategies for both large and small businesses, resulting in increased revenues, lowered operating costs, and improved customer satisfaction. In 2001 Jim Grebey founded Diligent Inc to provide operations management services for clients trying grow their business and operations due diligence services for investors trying to perform effective operations assessments.

Jim Grebey has published numerous management articles and in 2011 he published his first book "Operations Due Diligence - An M&A Guide for Investors and Business", published by McGraw Hill. In 2013 he published his second book "The Determined Entrepreneur - The Story of Dr George Tinsley and the Values that Guided His Journey to Success".

In 2001,while living and working in Asia, Jim Grebey was instrumental in helping offshore businesses bring their products to market in the United States, assisting U.S. businesses seeking offshore partners and helping offshore investors find compatible U.S. businesses for investment. Following 9/11, he was invited to testify before the U.S. Congress as an expert witness in the application of security technologies.

Today Jim Grebey works with a select group of business clients helping them grow and position their businesses and with investors performing acquisition assessments. He speaks regularly with groups on the subject of Operations Due Diligence and Entrepreneurism.

5

Book: Moving On

Click to Purchase at Degruyter Click to Read Sample Chapter Book: 'Moving On' by Jim Grebey

Selling your business may not be a consideration today… maybe it won’t be a consideration tomorrow either, or even next year. What most small business owners do know is… the day will eventually come when they will decide to sell their business. And on that day, a day when they’re eager to move on to the next adventure in their life, they may find they have already lost money because they failed to prepare early enough for that sale. To maximize the return from the sale of your business, you need to plan for that day well in advance. The time to start preparing for tomorrow is today. Don’t wait.

No small business owner should think about selling their business without first reading this book.
– Bud Strang, CEO, Six/Ten, LLC

You may not be ready to take the leap and pay a business broker or investment banker for their advice yet, but just knowing how to prepare your business for that day and understanding what selling your business will involve, is knowledge you can use now. What would really be helpful at this time would be a conversation with someone who can walk you through the positioning and sales process… someone who isn’t trying to sell you something.

This book provides the necessary knowledge to prepare our clients when they’re ready to engage with our M&A advisory and selling processes.
– Jonathan Molayem, President, Acquivest Financial Group

Let’s face it, when you are ready to sell your business and move on, it may be the most important deal of your life. You will be relying on the sale of your business, whether you are retiring to the beach, funding your next business, or planning to sell part of your business to a new financial partner, to support your next adventure. Maximizing your return from the sale is critical to your future. Selling a business isn’t something you do all the time so it’s important you get this right. Selling businesses is a game other people play. Now is the time for you to learn the rules of that game. Particularly if it is a game you can’t afford to lose.

Moving On – Getting the Most from the Sale of Your Small Business isn’t a text book. It is a conversation with a friend in the business. A friend who will help you avoid the common mistakes small business owners make once they finally decide it’s time to move on. It’s a conversation with someone who will guide you through the steps needed to position your business by preparing it to be sold, tell you how to list your business (including who to talk to and who to avoid), and show you how to effectively transition away from your business. It is a conversation about the support services you will need and where to find them, and it provides cautions about the people who will try to take advantage of you.

Jim Grebey is the President of Diligent Inc. He is an operations specialist and business coach who has worked with buyers and sellers and has been on both sides of the deal table. In Moving On he offers a much-needed discussion about the sale of a small business so you can benefit from his shared experiences. He offers real life examples, based on the experiences of the smallest to the largest small businesses from across a wide spectrum of industries. He guides you through the process following a highly pragmatic approach with useful recommendations that will help you optimize your return when you do decide it’s time to sell. If selling a business isn’t something you do on a regular basis, then this book is where you should begin to do your homework.

6

Book: The Determined Entrepreneur

Click to Purchase on Amazon

Book: 'The Determined Entrepreneur' by Jim GrebeyRalph Waldo Emerson, the 19th Century American writer and philosopher, wrote about the power of the individual and the benefits of following your own path in life. His work might have defined the modern entrepreneur. In his essay “Self –Reliance” Emerson says; “Life is a journey, not a destination. The Determined EntrepreneurThe Story of Dr George Tinsley and the Values that Guided His Journey to Success looks at the values that guided one of America’s most improbable entrepreneurs on his life journey. By following George Tinsley's amazing journey out of poverty the reader is able to experience in a unique way how a truly determined person can overcome tremendous obstacles and achieve a lifetime of success.

If you were to bet on a person who was likely to succeed in life you would never have bet on George Tinsley. The odds against his success would have seemed far too great to be overcome. To follow his journey, George Tinsley had to overcome an environment of extreme poverty while growing up in one of the toughest inner city neighborhoods in an era of open racial intolerance. By letting the values he learned early in life serve as guides throughout his life, George Tinsley was able to overcome the circumstances of his childhood to beat the odds and achieve great success as a serial entrepreneur.

George Tinsley BasketballGeorge Tinsley's life proves that success doesn't come from luck alone. Luck might explain one or even two significant accomplishments but becoming a serial entrepreneur doesn't come from luck but from the repeated application of a set of guiding principles that lead you to achieve one goal after another. The principles that became his guiding values can be learned by anyone, even at a young age, even in the worst of circumstances. What were the values that that propelled this serial entrepreneur?

It is possible for anyone to learn and apply the entrepreneurial values that can bring success in their own life. Success comes from applying these values not once but over and over again throughout your life. Entrepreneur examines these values. Values like making good decisions about the path you choose to follow, sustaining your self determination regardless of your life circumstances, setting personal goals and your willingness to work hard to achieve those goals. George Tinsley KFCA successful entrepreneur develops a unique mindset that allows them to pursue their goals even in the face of great adversity. Few people start their journey with as little as George Tinsley but his life proves that it's not where you start your journey that matters. It's the values you take along with you on your journey that will determine how far you get in life. How many sports stories do you hear that end once the athlete wins the big game or achieves their goal of making it onto the championship team. The problem with these stories is that they end once the big game has been played or the athlete makes the team. It’s like the big game was the peak of the athlete’s career and their story ends once the game is over. You hear about the hard work and talent it took to win the championship but is that really where their story ends? After hearing one of these stories do you ever feel like this may only be the point where the athlete’s real story begins… but their full life story is rarely told and you’re left hanging, wondering what this success in sports will mean later in the athlete's life. Entrepreneur shows the reader what happens when a determined athlete looks at their retirement from sports as the beginning of their career instead of the end.

George Tinsley ClassroomDoes an athlete’s willingness to work hard to succeed in sports end once they stop playing or can the values that brought their success in sports be used to achieve even greater things later in life? Does their success end once their athletic skills begin to fade or can they convert these values into entrepreneurial values that become a springboard for other things? The problem with most sports stories is that the story ends when the game is over. George Tinsley's story begins as a sports story but ends as a success story about business, community and family.

To reach a high level of success in sports an athlete has to bring more than skill to the game. They have to learn the value of hard work and determination, risk taking and the ability to overcome obstacles. These values are similar to the entrepreneurial values they will need to succeed in business in the next stage of their career. Unfortunately, not all athletes are able to convert their success in sports into entrepreneurial success. For some athletes, their entrepreneurial values seem to fade along with their athletic skills. Some professional athletes are able to convert the values of hard work and determination that brought success in their athletic career into stepping stones that will further propel them into successful careers as businessman and entrepreneurs. Because most people understand the work it takes to become a great athlete, George Tinsley's life story provides an example of how anyone can apply these values in their own life.

George Tinsley’s sports story is a great one… but his life story is even greater. He has accomplished many things in his life. Today, George Tinsley owns and operates almost eighty restaurants and other businesses. He has had an exciting life as a NCAA basketball champion and professional athlete and Kentucky Wesleyan College has acknowledged his accomplishments by awarding him an honorary PhD. But these accomplishments understate his poor beginnings and the improbable journey his life has taken. His story is highly motivational, but more importantly it tells the reader, there is no secret to success, just a set of entrepreneurial values that anyone is able to learn and apply in their own life.

Each chapter of Entrepreneur describes one of these entrepreneurial values and explains why it is important to success. The chapter then presents another portion of George Tinsley’s life, demonstrating how the value was learned or the role it played in his success. Because his life is presented in context, the reader will be able to see how these values were applied consistently throughout his life. Success comes from applying these values over and over throughout life.

7

Book: Operations Due Diligence

Click to Purchase on Amazon Book: 'Operations Due Diligence' by Jim Grebey

Most investors have a trusted CPA and attorney to help them perform their M&A due diligence. Unlike financial and legal due diligence, which are founded on the well established principles of law and accounting, there are no similar principals to guide an operations due diligence (ODD)... and this is where most investors would agree they make their greatest mistakes. Making ODD a leading cause of M&A failures. Most investors aren't even able to define what constitutes an effective operations due diligence and most businesses aren't prepared for a true operations assessment. Operations Due Diligence – An M&A Guide for Investors and Business, helps investors assess risk and the potential for long term sustainability of the business.

An effective due diligence requires the exploration of the financial, legal, and operations facets of a business. Financial due diligence relies heavily on the past performance of the business and legal due diligence is primarily concerned with the current structure and liability of the business. Neither of these concentrates on the operations infrastructure needed to support the future performance of the business. Operations Due Diligence solves this problem.

It’s hard to understand why any investor would consider putting millions of dollars into a business based solely on the financial and legal assessments without first asking some tough questions about the long term sustainability of the business. Operations due diligence assesses the latent operations risks that could impact the future success of the business. Looking at the financial and legal side of the business, without also performing an extensive operations risk assessment means the investor is entering an investment with tremendous potential risk… and a great leap of faith. Operations Due Diligence solves this problem.

On the other side of the coin are the businesses that are vying for scarce investment funds. While managers are wrestling with the day to day operation of their business they are simultaneously trying to position the business to compete for the funds needed for growth. While focusing on their day to day decisions, it’s easy to fall into an ad hoc mode of operation while losing focus on the development of the businesses operations infrastructure. Management is doing whatever it takes to get today’s problem solved and are left to worry about tomorrow’s problems when they occur. There hasn’t been a guide that helps them prioritize the activities that will position the business to compete for investment funds or prioritize their infrastructure improvement activities. They proceed with the potential that they’ve missed something… and a great leap of faith that they will meet an investor’s requirements when the day for a due diligence eventually arrives. Operations Due Diligence solves this problem.

Operations Due Diligence isn’t just another dull management book either. It makes extensive use of historic examples and stories, making it understandable, memorable and entertaining so that the reader will easily grasp and retain the information. Operations Due Diligence provides 400 due diligence questions that help the reader explore risk across nine operations infrastructure areas. The extensive use of historic examples puts each question in a context that will supplement the reader’s own experiences. A typical question is; “What is the organizational structure of the business”? Operations Due Diligence answers this question by first telling the story of Cavalry Officer Roberts as an example of why he created the Roberts Rules of Order to create structure. Each of the questions in Operations Due Diligence is described in detail, and placed in historic context in this manner. Investors concerned with the sustainability of a business and managers trying to position their business to qualify for an investment will find Operations Due Diligence is a valuable reference they will use over and over.

BOOK OUTLINE

Part 1- PLANNING YOUR VOYAGE

CHAPTER 1 - DUE DILIGENCE:Chapter 1 describes the need for due diligence and explains the difference between legal, financial, and operations due diligence. Legal and financial due diligence are based on the well established principals of law and accounting, however, no such well founded principal exists to support operations due diligence. Chapter 1 describes the methods for exploring the operations infrastructure to identify hidden risks and opportunities during an operations due diligence.

CHAPTER 2 - THE DUE DILIGENCE PROCESS: Chapter 2 is a brief overview of the due diligence process with emphasis on the requirements for conducting an operations due diligence and the role of the due diligence team. Due diligence is presented as a three step process (planning phase, on-site assessment phase, and the analysis and reporting phase).

CHAPTER 3 - INFRASTRUCTURE ASSESSMENT AREAS: Chapter 3 presents nine operations infrastructure areas that need to be explored during an operations due diligenceand describes what constitutes an infrastructure (processes, procedures, work flows, transaction points, etc.). These infrastructure areas are the subject of each of the chapters in Part 2.

Part 2 - EXPLORING IN DEPTH

CHAPTER 4 - ASSESSMENT OF THE CUSTOMER SATISFACTION INFRASTRUCTURE: Satisfied customers become repeat customers; they remain loyal to a business they feel has given them value. And yet, businesses often underestimate how important customer satisfaction is to their success. Operations Due Diligence looks at the role of customer satisfaction as an integral element across all areas of the business. It explores the importance of functions such as product support, requirements baseline control, quality management systems and employee training.

CHAPTER 5 - ASSESSMENT OF THE PRODUCTION INFRASTRUCTURE: All products can represent a high risk investment if the business doesn’t have sufficient production capability supported by a sound production infrastructure in place to bring the product fully to market. If the production capability of the business is assessed as a weak area, an investment strategy which includes updating the production infrastructure could offer a great opportunity for the investor.

CHAPTER 6 - ASSESSMENT OF THE INFORMATION MANAGEMENT INFRASTRUCTURE: It would be a tremendous understatement to say that all businesses today are information intensive. The information management infrastructure includes the electronic tools and data that form the backbone of the business and could represent a tremendous investment risk if assessed as a weak area of the business. Chapter 5 also touches on important sustainability subjects such as exploring a business’s disaster recovery processes.

CHAPTER 7 - ASSESSMENT OF THE SALES AND MARKETING INFRASTRUCTURE: Chapter 7 presents the sales and marketing infrastructure as a cross function of the entire business organization and discusses the assessment of the businesses primary goal; to sell products and make a profit. Chapter 7 provides methods for exploring the sales pipeline and products used to define the products and markets including the use of competitive and strategic analysis as assessment tools.

CHAPTER 8 - ASSESSMENT OF THE ORGANIZATIONAL INFRASTRUCTURE: Chapter 8 discusses the exploration of the formal and informal organizational structure of a business. This includes the legal structure, the organization chart that forms the command and control structure, plus the informal structure that becomes the corporate culture of the business. An assessment of the organizational infrastructure explores the working environment of the business.

CHAPTER 9 - ASSESSMENT OF THE PERSONNEL INFRASTRUCTURE: Many businesses state; our employees are our most important asset, but what does this really mean? An assessment of the personnel infrastructure is an exploration of the working relationship between the business and its employees including an assessment of the competency of the management team. Chapter 9 also includes subjects such as the assessment of employees motivation and compensation plus hiring, firing and everything in between.

CHAPTER 10 - ASSESSMENT OF THE FINANCIAL INFRASTRUCTURE: Financial due diligence is an assessment of the current financial status of the business but this type of assessment doesn’t tell an investor anything about the financial command and control structure of the business. Chapter 10 discusses the assessment of the financial infrastructure that forms the financial operations framework of a business. Operations due diligence of the financial infrastructure is not an assessment of the current financial status of the business. It is an assessment of the continuing financial operations of the business.

CHAPTER 11 - ASSESSMENT OF THE LEGAL INFRASTRUCTURE: Legal due diligence is an assessment of the current legal status of a business but this type of assessment doesn’t tell anything about the legal command and control structure of the business. Chapter 11 discusses the assessment of the legal infrastructure that forms the legal operations framework of a business. The legal infrastructure guides the legal operations of a business on a continuing basis. It includes all of the activities used to protect the business from legal risk and legal liabilities. Exploration of this area tells an investor, not the current legal status but the controls, such as program/project management and cost account management that will protect the business against future legal liability.

CHAPTER 12 - ASSESSMENT OF THE INSTITUTIONALIZED PROCESSES: Chapter 12 helps investors understand and explore the formalized policies and procedures that a business follows and the formalized method that guide their operations. Methods such as ISO, CMMI, Six Sigma, Enterprise Risk Management (ERM) or Quality Management Systems (QMS) can represent a significant opportunity for an investor once they are understood or they can represent significant risk if the business fails to qualify for a market driven process requirement.

9

Bummer!

A Risk is an event or circumstance that has the potential to negatively affect the future success of a business.

Once the event occurs the risk is said to be Realized. Some risks can be mitigated, some can be avoided and some we may just decide to tolerate. In all cases, our goal has to be to minimize the impact the risk will have on the business if it is realized.

A Bummer! … Is a risk that has been realized.

Many businesses fail to proactively self assess to identify risks. They find themselves saying:

I never saw that coming.

In all businesses things go awry. I am collecting stories about those moments in the life of a business when things went wrong and a risk was realized. Maybe you can laugh at them (now) or maybe you think it is just a good lesson to pass on. The source of all inputs will be kept confidential… No names will be published.

The following Bummer! List, is provided to help you start to understand how to identify risks in time to mitigate or avoid them. Can you see the implied risk in each statement?

  1. Your portfolio company said they were using Agile methods… Turns out they just didn’t have a development baseline… Bummer!
  2. No sales process, engineering did their own thing, unrestrained financial authority, and a screw the customer culture… You failed to see any risks in this deal? …Bummer!
  3. Most investors bring their attorney and their CPA to perform their due diligence but they fail to conduct an effective operations/risk assessment… Bummer!
  4. It’s a risky business…. Bummer! All business has risk. Sustainable businesses proactively manage their risk…
  5. Your key employee just quit to go to work for the competition… Bummer!
  6. A transformer caught fire and spread toxic PCB’s throughout your building. You can’t reenter your offices for the next 13 years… Bummer
  7. Your new acquisition is suffering from culture shock… And all you did was send them your ethics policy… Bummer!
  8. Your CFO created new department budgets… Now your department managers deny ownership of them… Bummer!
  9. 3 months ago you completed a major upgrade to your server room and NOW your surprised when your landlord tells you the rents being increasing… Bummer!
  10. Your in-house marketing team said you were ahead of the competition… and then they drowned in their own bath water… Bummer!
  11. You asked your 20 something engineer to help you conduct on-campus interviews and he made a pass at an applicant… Bummer!
  12. Infighting on your management team… Bummer!
  13. You acquired a software business and then found out the cost to transfer the license for a critical third party component… Bummer!
  14. Looks like you may need Drano to get your sales leads to convert through the sales funnel… Bummer!
  15. You entered the New Year without a proactive risk assessment plan… Bummer!
  16. You did your own competitive analysis… And now the competition is killing you. Bummer!
  17. Your program manager says he’s responsible for delivering products… Profit is your problem… Bummer!
  18. Your organization looks like a wagon wheel… And there are way too many spokes… Bummer
  19. Your attorney and CPA gave the due diligence a thumbs up… But no one assessed the operations risk… Bummer
  20. You sent an offer letter to a qualified candidate… A week later you found a more qualified candidate… and rescinded the first letter without cause. Bummer!
  21. Your organization chart looks like a wagon wheel instead of a pyramid… Bummer!
  22. In your shop, the term “organized labor” is an oxymoron… Bummer!
  23. Your VP of Sales is in love with the new marketing intern… She told him NO SALE. Bummer!
  24. Your current lead flow won’t support a hockey stick in this centur Bummer!
  25. You have the best product on the market… And no one knows about it… Bummer!
  26. Your brother-in-law can’t do the job… And you can’t fire him… Bummer!
  27. Your customers say you lost focus… But not on all of your projects… Bummer!
  28. Your supply chain is starting to look like an anchor chain… and it’s holding you back… Bummer!
  29. You thought proactive risk assessment was expensive… And then you found out the cost of not mitigating risk… Bummer!

Send me your Bummer!

E-mail your Bummer! to Jim Grebey at jfgrebey@diligentconsulting.com
Join my network on LinkedIn and Follow me on Twitter ( http://twitter.com/grebey)

10

Moving On - Positioning Checklist

Contact Jim: jfgrebey@diligentconsulting.com for your free copy of the Moving On - Positioning Checklist.

The Checklist is an Excel spreadsheet that includes multi-point assessment questions with drop-down menu's and an easy to read and use reporting tool. It's free, try it! (Note: We just want to encourage you to read the book. We do not embed cookies or other tracking software in the tool.)

  • ©Copyright 2018 Diligent, Inc. All Rights Reserved.