In 2022, we witnessed increasing checks on the future commercial value of companies in which private equity invested in.
And rightfully so.
But are obvious concerns also a reason for a no-go when investing?
Morph’s New Year’s resolution: Unravel for your future portfolio four business myths that sometimes restrain the opportunity of participating in growth diamonds.
An economic downturn scares investment money away!
Sure, if the sky is falling down, we are all gone. But with bleak economic outlooks, does it pay to have your investment money on a current account instead of investing?
At Morph, we are not convinced.
We witnessed a lot of mid-sized companies in various countries growing against the economic tides. How? Just by outsmarting the competition in a shrinking market. They are mostly very active in lead generation, having a can-do-all sales force and most of them are putting better products on the shelve at competitive pricing. Sounds simple, but in practice it doesn’t; Companies hunting for a bigger share of wallet are everywhere. But the best are modest in appearance, led by team spirit. Look for those silent outliers. They know their markets thoroughly and time sales effectively. But they don’t make a big fuss about it.
Every sector preventing CO2 reduction is toxic!
Yes. CO2 reduction is a hot topic. Literally and figuratively. But does that mean a take-over ban in sectors that are severely impacted by it?
Morph says no.
Take the carbon intensive construction industry. A sector in a monumental turn-around. From bustling construction sites to pre-fab Lego puzzles. Those who know how to play the game are the money makers of tomorrow. The secret? There is a lot to gain in smart sustainable, pre-fab technologies. For all with the pressure on the much-needed housing growth. The companies who leverage green pre-fab know-how reduce their failure costs – sometimes more than 10%. And become worthwhile to invest in.
If you have not invested significantly in digitalization, you are a lost case!
Of course, claiming a superb SEO & SEA content strategy with a perfect digital sales funnel makes you desirable. But what if you have just the basics of sales 2.0 in place? Does that make you a stuck-in-the-mud company?
We witnessed remarkable digital learning curves at Morph.
Mid-sized, family run businesses have a tendency to lag in their sales digitalization. But still generate solid results. We see this mostly with companies who operate in a value chain that is by its nature very traditional. But with the right assistance of digital experts, a business can outperform by just doing 20% more effort in transforming its sales funnel in bits & bytes; You don’t need to be completely digital to bear the fruits of building clicks on bricks. It is just about being a degree smarter in deploying your brand, products and professional content on the world wide web than your competition does. Watch for those companies that are eager to adapt in small steps new digital sales possibilities.
Offshoring is a must; you can’t do without!
The best cost savings are in searching for the best hands at the most economical price, right? Not surprisingly, those margin gains are to be found in Asia. But is offshoring always a must-have tick-in-the-box when assessing companies?
Morph sees a reverse trend.
Take the past Pandemic logistical issues. And listen to the demands of customers on being yet even more sustainable; It goes all against the long trend of offshoring to countries far away. Production at arm’s length minimizes a company’s carbon footprint. A must for future sales negotiations. And it shortens the delivery times, minimizing the risk of lost sales. Fair enough, it often eats away the margins. But it contributes to a steady cash flow in the future. At Morph, we always take into account future earnings when assessing a company. And we count our blessings when we meet management who have this near-shored foresight on smart sustainable business.