Competing in a Private Equity World
EFBC Breakfast Club Recap
EFBC members and guests recently gathered at a Breakfast Club conversation with Greg Stanley, Founder and President of Accelerant Consultants. The session explored how private equity is reshaping the competitive landscape for closely held and owner-led businesses.
Private equity firms have traditionally focused on larger companies, but that is changing. Many are now actively investing in the lower middle market, placing them in direct competition with independent businesses across a wide range of industries.
Greg noted that even if business owners are not pursuing private equity, private equity may still be influencing their market.
Why Private Equity Is Expanding
Several forces are driving this shift. There are more private equity firms than ever before, with significant capital available to invest. Smaller companies often present attractive opportunities due to lower purchase multiples and strong growth potential.
At the same time, an aging population of business owners is creating more potential exit opportunities. Private equity has also broadened its industry focus beyond traditional sectors and is now active in areas such as manufacturing, professional services, consumer services, and industrial businesses.
A New Type of Competitor
PE-backed companies often enter markets with meaningful advantages. They tend to be well funded, highly structured, and focused on accelerating growth and building value. This can allow them to invest heavily, professionalize operations, and pursue market share aggressively.
Independent businesses, however, still hold important strengths. Owner-led companies often benefit from agility, strong customer relationships, deep institutional knowledge, and a long-term perspective that is not driven by a fixed investment timeline.
Rather than trying to operate like private equity, the opportunity is to understand how these competitors think while continuing to leverage what makes independent businesses distinctive.
Building Value, Not Just Revenue
A central theme of the discussion was the importance of focusing on value creation rather than simply increasing revenue.
Greg shared a framework for how businesses are evaluated, including past performance, future growth potential, and risk. Organizations with a clear strategy and operating model are better positioned to improve performance while reducing uncertainty.
He also emphasized that not all revenue contributes equally to long-term success. Pursuing every opportunity can strain resources and dilute value. Being selective about customers, projects, and growth initiatives can lead to stronger outcomes over time.
The Importance of Being Intentional
Intentional growth was a recurring theme throughout the session. Businesses that clearly understand their value drivers and ideal customers are better equipped to compete in a changing environment.
Leaders were encouraged to consider questions such as:
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Why do customers choose us over alternatives
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What truly differentiates us from competitors
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What characteristics define an ideal customer
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Which opportunities may not align with long-term goals
Clarity in these areas helps organizations allocate resources more effectively and build stronger customer portfolios.
Preparing for the Future
Even for owners who are not planning to sell, operating with long-term readiness in mind can strengthen the business. Greg described preparation as involving three areas: personal readiness, financial readiness, and preparation of the revenue function.
Research referenced during the presentation suggests that many businesses attempt to sell but only a small percentage achieve optimal value, often due to lack of preparation.
By focusing on value drivers, aligning strategy and resources, and building systems that support consistent performance, organizations can improve both competitiveness and resilience.
Key Takeaways for Business Leaders
The session concluded with practical ideas leaders can apply immediately:
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Identify where and how your business creates value
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Be intentional about growth and customer selection
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Align expectations, resources, and incentives
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Focus on long-term improvement rather than quick wins
These principles can help businesses scale more effectively, improve profitability, and compete successfully in an evolving market.
Private equity will likely continue to influence industries for years to come. For owner-led and family businesses, success does not require becoming something they are not. It requires clarity, intentionality, and a strong understanding of what makes the organization valuable.
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