Private mid-market companies can't afford to stand still in 2013: Ernst & Young
Ongoing global uncertainty prompts companies to assess, evaluate growth
TORONTO, Jan. 24, 2013 /CNW/ - Canadian companies operating in the private
mid-market will face a number of common obstacles on their road to growth and
profitability in the year ahead.
Ernst & Young's 2013 private mid-market outlook points to a struggling global
— and, more particularly, US — economy as the root cause of slowed growth
and reduced demand in the construction, manufacturing, retail and wholesale
industries, among others.
"Success in the face of declining demand begins by looking inward and
assessing whether your company has the means, the customer base and the
capital to grow," says David Fabian, partner and co-leader of Ernst & Young's
Private Mid-Market practice. "If sustainable growth isn't achievable, then
companies must assess whether there are opportunities to reduce costs or
improve efficiency internally."
To stay competitive this year, companies should take a critical look at the
1. Workforce. Review productivity and the benefits generated by
2. Vendor relationships. Measure whether value is being generated by
3. Product line. Confirm gross margins realized are consistent with
4. Organizational structure. Ensure each legal entity holds the
appropriate assets, and that legal exposure is minimized and costs
are being managed.
5. Capital structure. Evaluate whether debt/equity ratios are
consistent with risk tolerance.
6. Succession planning. Ensure your company is appropriately
structured for the future.
7. Estate planning. Assess whether estate planning needs are
8. Global expansion. Consider opportunities to expand abroad.
9. Transaction opportunities. Investigate domestic or international
10. Global reach. Manage remote locations/offices/sales forces in
"Making the most of opportunities this year will depend on private mid-market
companies' ability to objectively evaluate their market position and act
accordingly — whether by expanding abroad or exiting the industry," says
Fabian. "Companies can't afford to sit still."
About Ernst & Young
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-0- Jan/24/2013 14:00 GMT
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