Core Evaluation

At the heart of every corporate acquisition target and makeover story is an evaluation of the business' core fundamentals. Grewal Consulting advises all firms looking to acquire retail stores to assess the business' core fundamentals and thus identify key areas to focus on.

Misjudged direction is a leading cause of business failure among small businesses today. Many business owners try to do too much, or expand into peripheral areas without truly integrating them into their core business plan. This is why it is essential for all new acquisitions to be analyzed for core fundamentals and competencies, and thus a corporate strategy built around these.

For example, Belding Mini Market’s core competencies are offering a wide variety of alcohol products at reasonable prices in a locally convenient manner. The previous owner tried to market alcohol to customers as far as 100 miles from the store and sell items ranging from bandanas to cheap kids candies. This was fundamentally flawed because people don’t like to, nor do they need to, travel far for beer and wine. Nor do they need to travel for liquor unless it is very rare, none of which was. Further, this store doesn’t cater to general consumer desires, and thus bandanas are not a good fit. Cheap kids candies are even less of a fit, as young children are unlikely to enter a liquor-focused store.

After assessing Belding Mini Market’s core competencies, we advised our client to eliminate all peripheral activities and products while focusing on the business' core fundamentals. This worked out great, as the business' net profit is up 300% since acquisition and sales are up 200%. (Profit rose faster due to higher margins on core products)

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