Issue link: https://read.dmtmag.com/i/585738
35 Oil Prophets BUSINESS STRATEGIES Time and Arguments In the case I mentioned with the retail discussion, the broker had taken super aggressive license with add- backs. In fact, as we reviewed the package, an expert on my team said he would be embarrassed to present a package with add-backs listed by the broker. So as we reviewed the retail assets for the family, the true cash flow was far less than what had been represented. (By the way, we never do that in a Meridian package. We believe in being forthright since most of the people we sell to remain our clients over the years.) I mention this situation with the crazy aggressive add-backs because you must be really careful with how you rate opportunities if using a "doctored up" solicitation package as your basis. But at least using your matrix, you'll have a preliminary score. Your matrix score may later be lowered (or sometimes increased) during your due diligence process. The important point is your matrix allows each opportunity to be scored and compared objectively, so your decision making will come from an empirical data system, not just emotion and gut feel. With the matrix in place, and your 1-5 rating system, each opportunity should be scored by at least two people (CEO and CFO are typical). If only one person scores, you miss the valuable dialogue. Some families have a 2-3 member team do initial scoring, and then based on a minimum threshold, involve more family owners only if a potential acquisition meets the minimum threshold score. This two-tier system has proved useful and helpful to families. I often get questions about weighting the criteria. I like using a weighting system for your criteria based on your family preferences. Again, use the team to create your weighting factors so that everyone is "bought in" to the methodology because they created it. That stops most arguments before they begin (not that any family has squabbles – LOL!) If you have questions about creating your own Acquisition Matrix, please feel free to call me at 817-594-0546. In the meantime, hoping you make this your best year ever! Since 1991, Meridian has provided insight and services to over 3,400 petroleum marketers, growing and expanding their market share, while increasing their cash flow and profits. Being the leading petro valuation provider in the nation, Meridian is also trusted for buy/sell transactions. To find out what Meridian can do for you – Call us 800-728-9005. Charter South, Inc. GENERAL CONTRACTORS Birmingham | Atlanta | Baton Rouge www.chartersouth.com Jim Rogers VP Business Development Cell (205) 243-9959 Office (205) 941-1173 x 216 Jeff Strawbridge President Cell (205) 238-8795 Office (205) 941-1173 x 220 Whether you are planning to build from the ground up, or your store needs a face-lift, Charter South is your one-stop shop. We can help you with your design, remodel or rebuild. Turn-key s solutions Design New s Store Rebuild Existing s Store Remodel s Existing Store Image s Upgrades Add s Food to Existing Store