Reflections on the Kansas City Market and Our Clients (Part 1 of 2)

As I reflect on the business growth of the past 18 months across Kansas City businesses, I see distinct trends. We touch the growth and strategy of many mid- to large-size companies across Kansas City by providing management services, advisory services, leadership services and board positions for the organizations we are involved with.

2019 brings exciting times given the strength of our economy and the aging population. The younger workforce is bringing in new ways of thinking and working and challenging past paradigms. These trends in companies are causing specific actions to take place to improve the businesses.

The trends of growth and challenges we have been seeing across industries like HealthCare, Manufacturing, Insurance and Engineering include:

    • Private healthcare – Private Equity firms more active in practice roll ups and partnering with owner/operators.  The new business entity promises better sales multiples for the Doctors, clear exit paths and leverage of scale (provider contracts, common IT and back office systems, new services, etc.)
    • Private healthcare – new business models continue to enter the markets to disrupt the craziness around the costs for healthcare services driven by the power of the hospital systems combined with Insurance providers and Third Party Administrators.  These new business models need capital and thoughtful market entry in order to dance with the elephants.
    • Insurance – companies getting more scale through acquisitions (vertical and horizontal), leveraging the client portfolio and added new services to existing clients to retain more.
    • Business brokers – smaller company sizes beginning to pick up exit activity (more sellers testing the market) in the $1M-20M revenue range.  These transactions are supported by a fractured broker model that provides inconsistent results for sellers and buyers.
    • Engineering services – business improvement services based on process improvements and looking at the business in new ways in order to enable stronger results.  Smaller companies need to partner more effectively while large companies still operate as they have for many years.

Many of the above situations are accompanied by inadequate staffing, hair on fire, time is of the essence challenges that can require external assistance.

All of the above have a few things in common that we have been asked to deliver on.  See part 2 of 2 for the conclusion and some ideas on how other companies are addressing the trends and improving their businesses.

Jim Wadella, Owner – Founder