All posts by John Psarouthakis

drjohn11aDr. John Psarouthakis, Executive Editor of www.BusinessThinker.com, Distinguished Visiting Fellow at the Institute of Advanced Studies in the Humanities, University of Edinburgh, Scotland, publisher of www.GavdosPress.com and Founder and former CEO, JP Industries, Inc., a Fortune 500 industrial corporation

C. K. Prahalad – Guru on Strategy, Leadership and Competitiveness

(August 8, 1941 – April 16, 2010)

I had began, recently, to write an article on leadership when I was informed of the passing of my dear friend Professor C. K. Prahalad of the Ross School of Business, University of Michigan on April 16, 2010 at the age of 69.  I decided that this topic would be far better expressed by this outstanding thinker and educator himself.  See clip after the jump. Continue reading C. K. Prahalad – Guru on Strategy, Leadership and Competitiveness

Employment Growth

I am concerned about the factors that lead to employment growth, something that should be of vital interest to every person. Discussion about employment or business often focuses on the largest companies. I believe that we have not looked in depth at the relationship of company size to employment growth and value to the society as a whole. This relationship of size to value is an important one that is often distorted by mythology and misperceptions. Continue reading Employment Growth

Investing in Michigan Companies

Since the turn of the 21st century, Michigan manufacturers have struggled with a few key issues that have begun to change the shape of several industries that drive Michigan’s economy: 1) Increased competition from foreign countries where workers are paid lower wages; 2) increased competition from an influx of foreign competitors doing business in Michigan; 3) tremendous increases in raw material prices; and 4) inordinately high increases in basic costs necessary to run business, such as health care.  Many business owners have never experienced a multitude of issues such as these, and have found themselves either unable to effectively manage their companies during these trying times, or are unwilling to make the investments necessary in their business to remain competitive. Continue reading Investing in Michigan Companies

The Successful Business Acquisition Process – Step #8 – The Evaluation Process: an Overview

The evaluation process takes places in successive stages or filters as you progress more deeply into the deal.  At any point along the way that you feel uncomfortable with the deal, you should not go through with it. However, be aware that even in deals that go through, extensive problem-solving is often required in order to complete the deal. Continue reading The Successful Business Acquisition Process – Step #8 – The Evaluation Process: an Overview

How to Grow Your Company as the Economy Recovers from the Recession

The greatest change that seems to take place in the recovering U.S. economy is an aging population with low level of spending due combined with a high level of unemployment, low growth in consumer incomes, and difficulty to obtain credit and the high interest cost credit.

On the other hand there is an increasing demand for products and services that have not been a priority during the recession. It is expected that this demand will increase as unemployment from the current high levels improves over the  the next sixteen months. However, consumer growth in spending will very likely stay below 4% the historical levels. Continue reading How to Grow Your Company as the Economy Recovers from the Recession

The Successful Business Acquisition Process – Step #7 – Narrowing Your Search: Matching Broad Criteria of Your Initial Acquisition Plan

The first “filters” for your leads are the initial criteria that you set in your acquisition plan.  Although you will have many more issues to review as information unfolds, it is unpractical to consider much more than the total sales revenues, degree of profitability, and industry, at the start, because this is all the information you are likely to get from most brokers or other sources before having to sign a confidentiality agreement.

Once you sign a confidentiality agreement, you are wise to set up more detailed criteria.  Some of the more common criteria used at this next stage include the location, product line, the reputation of the company, if easily determined, growth patterns for the industry and the company up for sale, more detail about profitability, cash flow and liquidity, and of course, the overall appeal of the business to you, personally. Continue reading The Successful Business Acquisition Process – Step #7 – Narrowing Your Search: Matching Broad Criteria of Your Initial Acquisition Plan

An Opinion on the Uncertainty of Today’s Business Environment

From my own experience as a technologist, business executive and entrepreneur I can tell that:

The global changes that are occurring around us today create the need to zero-in on a number of issues that influence the course for success or failure if we do not take them in to consideration in our strategic and operational culture. Continue reading An Opinion on the Uncertainty of Today’s Business Environment

The Successful Business Acquisition Process – Step #6 – Casting the net for business leads

This chapter reviews the primary ways in which you learn about businesses for sale.  An elaborate but informal network of brokers are the best direct source of businesses for sale. Although you may be lucky and find your own company by making direct contacts, you are likely to get a much broader lead pool generated with less effort by building your broker network.

This chapter also describes a method for tracking your leads and the typical fee agreement that a buyer broker will ask you to sign. Continue reading The Successful Business Acquisition Process – Step #6 – Casting the net for business leads

The Auto Industry is now a Commodity Business

The “Detroit Three” auto companies as we should call them today need to keep one thought paramount as they struggle to survive and begin to grow again.

It’s this: advancements in manufacturing and production -technologies have rendered about 80% of the contemporary automobiles produced to a commodity product. Continue reading The Auto Industry is now a Commodity Business

The Successful Business Acquisition Process – Step #5 – Building the Acquisition Team

Building a good team is important right at the outset of your search.  You will need an attorney almost immediately, to review any confidentiality agreements or letters of interest that must be signed.  However, you should also begin to think about the other team members you will need early on in the search process.  A good accountant is essential to the adequate review of the seller’s books, and possibly in addition, an independent auditor.  Other consultants you need may depend upon your own skill levels and the nature of the business.  If you will need outside funding, a financial consultant may be needed.  Depending upon your own background in the functional business areas of sales and marketing, operations, engineering and manufacturing, you may or may not require outside help.  An environmental consultant is increasingly needed whenever real property is involved in the transaction, to assure that no hidden problems exist. Continue reading The Successful Business Acquisition Process – Step #5 – Building the Acquisition Team