Value Creation Plan

Value Creation Plan

Workflow

Step 1: Baseline Assessment

Understand the starting point:

• Current revenue, EBITDA, and margins
• Organizational structure and capabilities
• Key operational metrics by function
• Management team strengths and gaps
• Quick wins already identified during diligence

Step 2: Value Creation Levers

Map all levers to an EBITDA bridge over the hold period:

Revenue Growth Levers

• Organic growth: Price increases, volume growth, market expansion
• Cross-sell / upsell: New products to existing customers
• New market entry: Geographic expansion, new verticals, new channels
• Sales force effectiveness: Hire reps, improve conversion, shorten cycle
• M&A / add-ons: Bolt-on acquisitions to add revenue and capabilities

For each lever:

• Current state → Target state
• Revenue impact ($)
• Timeline to impact
• Investment required
• Confidence level (high/medium/low)

Margin Expansion Levers

• Pricing optimization: Price increases, mix shift, bundling
• COGS reduction: Procurement savings, supplier consolidation, automation
• OpEx optimization: Overhead reduction, shared services, offshoring
• Technology investment: Automation, systems integration, data analytics
• Scale leverage: Fixed cost leverage as revenue grows

Strategic / Multiple Expansion

• Platform building: Add-on acquisitions, tuck-ins
• Recurring revenue shift: Move from project to recurring/subscription
• Market positioning: Category leadership, brand building
• Management upgrades: Key hires to professionalize the business
• ESG / governance: Board formation, reporting improvements

Step 3: EBITDA Bridge

Build the walk from current to target EBITDA:

| Lever | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |

|-------|--------|--------|--------|--------|--------|

| Base EBITDA | | | | | |

| Organic revenue growth | | | | | |

| Pricing | | | | | |

| Add-on M&A | | | | | |

| COGS savings | | | | | |

| OpEx optimization | | | | | |

| Technology investment | | | | | |

| Pro Forma EBITDA | | | | | |

| Margin | | | | | |

Step 4: 100-Day Plan

Prioritize the first 100 days post-close:

Days 1-30: Stabilize & Assess

• Management alignment and retention (sign employment agreements, set comp)
• Quick wins — pricing, obvious cost cuts, low-hanging fruit
• Detailed operational assessment by function
• Customer communication plan
• Set up reporting and KPI dashboards

Days 31-60: Plan & Initiate

• Finalize strategic plan and communicate to organization
• Launch top 3-5 value creation initiatives
• Begin add-on M&A pipeline development
• Hire for critical gaps
• Implement new reporting cadence (weekly flash, monthly review, quarterly board)

Days 61-100: Execute & Measure

• First results from quick-win initiatives
• First board meeting with operating metrics
• Progress report on each value creation lever
• Adjust plan based on early learnings

Step 5: KPI Dashboard

Define the metrics that will track value creation:

| KPI | Current | Year 1 Target | Owner | Reporting Frequency |

|-----|---------|---------------|-------|-------------------|

| Revenue | | | CEO | Monthly |

| EBITDA | | | CFO | Monthly |

| EBITDA margin | | | CFO | Monthly |

| New customer wins | | | CRO | Weekly |

| Net retention | | | CRO | Monthly |

| Employee turnover | | | CHRO | Monthly |

| Cash conversion | | | CFO | Monthly |

Step 6: Output

• Word document or PowerPoint with:
• Executive summary (1 page)
• EBITDA bridge chart
• Value creation levers detail (1 page per lever)
• 100-day plan timeline
• KPI dashboard
• Accountability matrix (who owns what)
• Excel model backing the EBITDA bridge

Important Notes

• Be realistic about timing — most PE value creation takes 12-24 months to show in financials
• Quick wins matter for momentum and credibility, but don't over-rotate on cost cuts at the expense of growth
• Management buy-in is critical — co-develop the plan, don't impose it
• Track initiative-level P&L impact, not just top-line EBITDA — you need to know what's working
• Add-on M&A is often the largest value creation lever — start the pipeline on Day 1
• Always pressure-test assumptions with operating partners or industry experts