MicroCap Business Cashflow Stabilization: ERP System, Divestitures & Spin-Offs

Company restructuring, merging & acquisition should be done in concert with ERP system tuning up or building up. Sometimes you should consider switching to cheaper and more efficient ERP solution

The MicroCap space may be viewed as a jungle containing many hungry predators who may view you and your company as just another meal.
Within six degrees of separation from nearly everyone in the American business community, unfortunately, you are likely to meet someone who has been victimized in a reverse merger transaction or some other transaction that was poorly structured, ill conceived and designed to fulfill the selfish interests of a few.
Divestitures or Spin-Offs may substantially improve you cash flow:

o Sometimes companies can be burdened by assets or divisions that are not relevant to their current business focus.

o This can cause financial problems and can create a lack of clarity on the part of their shareholder base.

o What is the solution? Maybe your company should consider getting operationally and financially back into focus by spinning out a division or divesting itself of an asset?

o Usually you need specialist to assist in identifying a target for divesting or spinning off, valuing the asset, finding a buyer and/or assisting in a public or private spin-off of the asset to your shareholders.

ERP System – structuring your business processes. It is not a secret that when you are trying to sell the company – first potential buyer question would be your ERP system and structuring around it.

o Do you have Accounting/Inventory/Supply Chain management automation system?

o How expensive is its annual support?

o Is it general industrial ERP or custom made one (risks to lose IT support)

It is common scenario when your IT budget is overburdening and you can switch to ERP system which is cheaper in software licenses cost and annual support. We saw successful scenarios:

o Switch from expensive ERP: Oracle Financials, PeopleSoft, SAP to budget ERP: Microsoft Great Plains, Navision

o Switch from legacy CRM solution, such as Siebel to budget CRM: Microsoft CRM