At Apohan, we use a unique consulting approach for solving business problems. Below are the salient features of our consulting approach.
Business is like an individual with a complex body. It isn’t called a body corporate for no reason! It can be in a good health or it can be even seriously ill. It is the duty of the expert to identify the core reasons behind the visible problems. A technocrat SME businessman can only see the visible symptoms of what is going wrong in the company on strategic, financial and corporate side. It cannot be reasonably expected him to understand the origin of the dip problem in these areas.
Mostly the consultants start working on the diagnosis done by the businessman. Their scope of the work is determined by the businessman himself. Typically, the SME businessman does not have a prior experience of handling the strategic and financial side of a serious financial problem. Businessman needs help in understanding what is the reason behind the strategic and and financial problem visible through symptoms of weakness in the company’s performance.
When a businessman undertakes his first venture, he has all the time for the project development, project management and project execution. If he undertakes another growth initiative after many years, he is fully tied up with the existing operations and cannot do justice to the new venture. It is duty of the consultants to look into important checks, parameters, options, problems and aspects in the new growth initiative as well before taking the assignment.
Apohan undertakes an elaborate interaction with the businessman to understand ultimate problem he wants to solve. Undertake similar interaction to understand the kind of growth initiatives he wants to take up. Apohan also notes down the pre-identified options and strategies identified by the businessman. Apohan carries out the initial diagnosis of the situation based on the initial interactions and advises the business to take up an appropriate consulting assignment accordingly. Apohan does not proceed to undertake an assignment in haste wasting time & resources of the business.
Strategic services require the participation of many types of stakeholders, consultants and experts. Strategic change is usually a very long process. It becomes very difficult for a business to integrate the various elements by different consultants and the agencies involved in implementation of a strategic policy or a strategic change. Strategic assignments such as a merger or acquisition, equity funding or a joint venture require involvement of company secretaries, chartered accountants, lawyers, business valuers, etc. It is difficult to identify the agencies with adequate expertise in these areas and integrate the work they perform. Apohan typically undertakes a consulting assignments to solve the strategic problems or to fulfill the dream of growth business. Apohan’s mandate is completion of this whole work through permutations and combinations of strategies. The SME business need not identify specific activities for Apohan!
Many times the money spent on the consulting activity goes waste because there is no one to take care of the implementation of the recommendations. Apohan’s scope of work includes identification of the problem, study of available option to solve the problem, selection of a solution, formulation of a strategy to develop the solution and implementation of the strategy on the ground. We also provide handholding services for 3 to 6 months till the management of company gets accustomed to the new business environment.
An SME business is required to carry out a wide variety of compliances throughout the year. Many consultants are associated with a business merely for carrying out this basic minimum compliance required as per laws. The perspective of these consultants is to be complaint to the laws of land and all the strategic business decisions have to be taken by the businessman himself. The government regulators have their own perspective and intention behind requiring a business to carry out all these compliances. These consultants appointed for these compliances tend to look at a business only from the perspective of legal validity of the business actions, required permissions, procedures, forms to be filled in, additional compliance requirements, etc.
While all these activities are necessary, they do not add value to the business in all usual circumstances. Nor these consultants are able to comprehend what can make the business rise to its potential. For example, many chartered accountants carry out only the process of preparation of financial statements and do not act as the chief financial officers company.
As against this, Apohan does not carry out any statutory work. It carries out the company development strategic consultancy. Hence our focus is on solving the problems of the company and achieving superior financial and operational performance. Our focus is on making a company reach its fullest potential. We focus on making a company financially stable. We see to that the company’s performance is sustainable over many years!
Every company is different in terms of its products, its production process, its technology, its management, its human resources, its market, its business environment, its opportunities and its problems. Equity funding, financial strategy, e business strategy, corporate management, mergers and acquisitions, succession planning, improvement in the financial performance, etc take entirely different shape for each different business. No standard solution can work for all of them.
Customisation of a solution requires personal involvement of the expert people. Apohan does not apply any standard rule in solving the problems of companies. Search standard solution just don’t work for complex strategic problems. We evolve strategic solutions tailor-made for each business. We understand the profile of the company in detail. We understand the profile of the management. We study the business environment of the company. We appreciate the philosophy of business for each business separately. We try to remove the misconceptions. We try to impress the management of the business the importance of modern professional way of running a business. However, we respect the discretion of the management it and try to find a solution that suits them most.
Many management consultants and strategic consultants offer the solutions the problems of a business from within the standard set of solutions. This does not address the specific requirement of the client business. Most consultants do not take risk of exploring the new options that would be unique and applied for first time in the industry. This is mainly because they are risky, time consuming, requiring huge efforts for development, requiring radical thinking, etc. Most of the time these consultants are able to make a business accept their standard solution with all its disadvantages. Apohan believes that a consulting company should keep itself abreast of the developments in the industry, customize standard solutions, evolve new solutions and provide a satisfactory solution to the client addressing their major concerns.
Business person is tied up in multiple number of activities. Their schedule is always hectic. Requiring them to travel away from their place of work or city of work generally delays the completion of the assignment due to packed schedule. We make an attempt to travel to the client’s office and undertaker all the discussions and meetings there. We tried to select the place of mutual convenience for meetings with the investors. In the times of COVID-19, we try to conduct as much business as possible online or through video conferencing.
It requires a lot of time to complete and equity funding assignment by its intrinsic nature. The period required for closure of a merger and acquisition transaction typically ranges from 6 months to 12 months. However, a lot depends upon the competence and professionalism of the merger and acquisition consultants. The transactions take a lot of time basically to identify the problem and to identify a solution along with a development framework. Involvement of brokers by the businessman who keep the opportunity of investment close to their chest also increases the time required for closure of the assignment. Approaching in correct type of investors and going to the advanced stages of negotiations with a wrong type of investor also waste a lot of time. This lack of development of suitable elimination for screening criteria also affects the confidence of the business man about being eligible to get investment. Another reason for delay in the closure of assignment is involvement of many types of professionals and a long corporate process. It is the iterations of taking up the investment proposal to an incorrect investor, stopping the efforts on other friends on exclusive agreement, and then discarding the investor due to inappropriate screening is the major reason for delays and failures of funding assignments.
Apohan has a very wide network of investors for all categories of investments in small and medium enterprises. It has a wide network of professionals of all kinds to carry out the Complaints work for mergers and acquisitions or similar strategic initiatives. Apohan has a wide array of template documents saving the time on drafting fresh documents from the scratch. Apohan’s experts with prolonged experience in the sector can perfectly customise this template in a very short period of time. Apohan also quickly realises which negotiations are not visible and did not be explored anymore thus directing the resources on fruitful opportunities.
Office is centrally located in Shivajinagar, Pune, Maharashtra, India. This provides a very quick access to all client visiting in the city and from outside the city.
Apohan is aware of the the sensitivity of the the confidential information of a company. It has a very strict confidentiality policy within the company. All the information, data, and documents received from the clients including within our business development phase are kept with very high security. Apohan signs a confidentiality agreement (an NDA) before accessing or possessing the confidential information. Also, Apohan signs a confidentiality agreement with the professionals, experts, partner involved before passing on the information. It also helps the client in sign in an NDA agreement with the potential investor taking into account all the important provisions. Apohan returns or destroys the client information after the assignment. If some information is retained, it is with explicit written approval of the client and only for reference purposes in future queries.
Many a time, the advice of the consultants may be governed by self interest. The benefits, fees, new Consulting assignments, increase in scope of work, etc might be governed by what the consultants recommend the gullible client as a part of ongoing work. The business requires assistance of the client in taking decisions. However, the outcome of the decision itself may decide the remuneration for the the total benefit of the Consultants. This is called an agency effect in the consulting world.
Apohan is a highly ethical company governed by the highest standards of professional conduct. We do not give any illegal, inappropriate advice to a business which may put it in danger at a later point of time. We do not provide any advice of convenience which may harm the interest of the parties in the future. We do not undertake any manipulative actions that would harm the interests of the absent, vulnerable, rightful stakeholders. We espouse legitimate growth means and fair treatment to all the concerned stakeholders. We do not fall prey to the pressure by any stakeholder to do do anything unjust & illegal.
The merger and acquisition transactions are highly confidential & sensitive. The information about the very existence of the merger and acquisition initiatives or consulting assignments itself is a very sensitive matter for a business. Further, it has been observed that many companies take the situation, especially in financial distress, of having to take equity funding as a reputational loss. Depending upon the sensitivity of a document, Apohan takes written permission for sharing the information further with the stakeholders. Apohan prepares an anonymous profile of the company and the investment opportunity for circulation in the investment forums.
Apohan gives the complete clarity of the assignment of equity funding to a business. Apohan believes in the clarification of the basic important concepts regarding mergers and acquisitions or financial strategy. Apohan informs the management of the client company in detail about the ramifications and effects of the the implementation of the strategy. It gives them the idea of the total cost of the transaction and the time-frame required for the completion of the assignment. It provides them the information about the uncertainties involved in the process. Apohan makes a presentation at the kick off meeting of the assignment in which various roles, inputs and involvements of the various management stakeholders are elaborated. If the management of the company of the client is interested in internalising the the strategic decision making expertise, Apohan helps in the same and encourages it.
Apohan does not believe in keeping the management in dark about the future steps in the assignment only to increase the importance by withholding knowledge and information. This is very much required for the SME businesses led by technocrat businessmen.
In the course of a consulting assignment, a consultant logically comes across various areas in which a business needs improvements. The consultants are exposed to many kinds of businesses in different varieties of assignments. This experience can come handy for improvement of the trouble making and inefficient areas of the client business.
Apohan makes an attempt to inform the business about how the other large professional companies handle these issues and problems. Though the elaboration or detailing of these recommendations would not be the integral part of the ongoing assignment, we identify many areas where our client company can add value to their business by undertaking simple measures.
The process of financial performance improvement, equity funding for growth or financial turnaround of a business in repayment default is very complex. The discussions with the client company during the business development phase by Apohan for getting the consulting assignment are elaborate enough but there is a logical limitation to time spent them. Many times it happens that a technocrat SME businessman does not get sufficient confidence to undertake a specific type of strategic activity due to lack of complete clarity. He is not well aware of what kind of consulting assignment should be given. He is also not aware of the full scope of work all the agencies involved. In large companies where there is a separate finance function headed by a chief financial officer, the problem is identified internally; a good degree of structuring of a solution is also done internally; and the execution and implementation work is handed over to the consultant. This is not possible in case of a SME business.
An SME business also needs to provide the confidential and critical information if it wants to get an idea about the solution in the business development phase itself. Understandably so, consulting company is not expected to seek such kind of information from the client at Business Development stage. A technocrat businessman does not have complete orientation in corporate management, business strategy, financing strategy, mergers and acquisitions, business alliances, their financial models, equity contracts, corporate processes, etc. Also, there are lot many areas of misconceptions and apprehensions about complex transactions such as mergers and acquisitions.
Apohan provides paid counselling services (paid on hourly basis) before possibly undertaking long-term strategic consulting assignments. This enables the teknokrat SME businessman to understand the context of the problem and how the professional companies address and come out of these kind of problems. The counselling sessions enable an SME businessman to undertake a strategic growth, performance improvement, financial turnaround initiative with full conviction.
Many Consulting companies prepare flashy reports only to make recommendations that have no practical relevance to the actual situation of the business. This is mainly because implementation of the recommendations is not a part of their scope of work. None of the works of Apohan in the nature of secondary research which the business has to consider and implement. Apohan itself provides the implementation service of the solution of the problem that it has identified. Not only we identify the problem, we also develop a solution and implement it on the ground.
Apohan realises a major component of its consulting fees only after implementation of its solution and success of the consulting mandate given. For example, the deal structure in a funding assignment changes very dynamically with the circumstances of the business and preferences of the businesses & investors. A consultant should be able to suggest a mechanism that satisfies the requirement by both the parties. Additionally, the consultant should be able to evolve and implement contractual and financial course of action.
Mergers and acquisitions, strategic financial changes, changes in capital structure, business restructuring, strategic business alliances through contractual or equity joint ventures, foreign direct investment, overseas direct investment, new projects, new corporate policies, mechanism for performance and incentives of the board of directors, change in the legal format of the company, equity funding for growth, turnaround through equity funding, succession planning, slump sale, acquisitions of business, divisions of company into two, formulation of a long-term business strategy, improvement of financial performance through several initiatives, etc are not routine activities in a company.
The middle management, employees, suppliers, clients, other stakeholders may or may not be involved in the formulation and implementation of the strategy. However, they have to accept the strategic changes and leave as per the norms of the new framework. They need orientation about the nature of the change, change in their role, new policies, new environment, etc. The management of the client company suddenly comes to know unforeseen issues after implementation of the strategic initiative.
Apohan provides handholding support for 3 to 6 months depending upon the consulting contract to assist the management in resolving these issues.
Apohan has divides consulting charges into the following components: 1. Mobilization fees or preparatory fees. 2. Milestone based charges against the submission of important deliverables. 3. Success fees upon signing of the investment contract. GST is paid extra on these basic fees. Specific expenses such as outstation travel, stay are undertaken with the prior approval of the client and reimbursed at actual as per the provisions of the Consulting contract.
In the SMB companies apohan has to organise the information about the business model, unique attraction points about the investment, etc. It has create a documentation set from the scratch. The work required to be done for equity investment in a SME business is much more than the one in a large company. In the course of assignment, financial infrastructure about the company gets created. The final decision whether to take investment from investor or not is always the choice of the businessman and upon has no say in it other than making a recommendation. Business can use his submissions at any future point of time to revive the assignment or undertake a fresh assignment.
In order to mitigate this risk, Apohan does not undertake any consulting assignment without payment of milestone based fees against the deliverables. Even the businesses in financial distress need to arrange payments other than success fees trusting the capability of Apohan to get them equity funding.
There is a fundamental difference between carrying out merger and acquisition activity or any strategic consulting activity for a large organised company and a small and medium enterprise. The large companies have a dedicated finance department, adequate number of staff in the finance department, financial Software, financial compliances, documentation, reports. Moreover, in a large company, the fundamental concepts of the the chief financial officer or the Managing Director regarding strategic transactions are clear and the only work left for the consultants is execution of the assignment. The scenario is by far very different in a small and medium enterprises.
Many companies in consulting sector charge of fees over and above their cost plus profit margin expectation. This is done in the same manner the banks charge excess interest rate to take care of unexpected level of non performing assets. The consulting companies generally expect that they would not receive the last milestone payment. This happens when the services are dis-satisfactory and there is hardly any probability of getting the last milestone payment due to client dissatisfaction. Apohan does not indulge in such kind of practices as it is confident of successful completion of the assignment which have been chosen very carefully.
In SME Business, Apohan has to prepare the exhaustive documentation required for equity funding. This includes, from among others, business plan, financial models, equity contracts, presentations, communication templates, etc. Apohan has to prepare meaningful reports addressing the concerns of the investors. A lot of time is spent in collecting the information scattered at various places in the company. Apohan has to organise the raw data of the company into meaningful information. Apohan has to provide strategic orientation to the management of the company about the process. It has to explain the relevance of various activities to the management in the language they can understand.
In nutshell, the hardship required in strategic consultancy for SME businesses is much more than the the similar type of work for large companies. Moreover, the M&A consulting companies, investment Advisors, investment banks handle very large size of investments, usually more than rupees 300 – 500 crore, effectively reducing the fixed costs per transaction. Against this, the size of deal in a SME equity transaction would be relatively very small, typically ranging between Rs. 10 cr to 300 cr with an average value of Rs. 70 -80 Cr .
Despite this, Apohan charges are highly competitive looking at the quality and professionalism of the service which is at par with the one that is provided by the reputed investment banks to large publicly listed companies or MNC companies.
See image below: Apohan’s unique consulting approach