Operational Assessments for Portfolio Companies & Organizations

Operational assessments are a tool to benchmark operating processes and procedures and identify improvement opportunities to increase performance and decrease risks. Cendrowski Corporate Advisors professionals can walk you through the complexities of the operational assessment process. Portfolio companies often benefit from an operational review because of the very nature of private equity deals.

  • Many portfolio companies are in growth mode, and potentially could “outgrow” their controls. A company with five or six times their current annual sales will likely need to improve or replace their basic operating controls and systems, including financial, inventory, and product handling.
  • Emerging portfolio companies may rely on “heroics” from a key employee or owner. As the organization matures, it is essential to operationalize their expertise to support future growth and opportunities.
  • Some portfolio companies lack formalized controls. For example, they have no procedure documentation or manuals, just a staff who know how things have always been done. This makes it very difficult to introduce change in the organization. Worse, control lapses that increase risk to the organization may develop or go unnoticed by management.
  • Families often desire enhanced reporting of financial and operational results to help monitor portfolio company operations.
  • An operational assessment provides a detailed “road map” to family members or new management detailing the operations and financial processes of the business. This can help management get a jump start on enhancing the business operations.
  • The operational assessment deliverables provide detailed reports of the portfolio company’s internal controls and other information essential for the due diligence process, should the family office decide to harvest the investment.

How an Operations Assessment Can Transform Your Organization

An operational assessment provides a structured approach to help the organization rapidly and efficiently identify improvements. Many portfolio companies are very lean, and do not have internal staff, time or expertise to assess operations and implement improvements. Additionally, it is often very difficult to make internal change in an organization, but an outside perspective from trusted advisors may be instrumental to your operations.

The deliverables for an operational assessment include detailed process descriptions, maps of control procedures and an explanation of why each is important.

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