How do you set the goals for an operations plan after a private equity acquisition?
After an acquisition, agree on two things first: who holds control and the one goal. Profitability, growth and process cleanup lead to different plans. Profitability means cutting expenses and no new hires. Growth means a set budget for winning customers, a pace and a limit on how far EBITDA may dip. Write the guardrails down first.
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Start with control
For me, the most important thing is who holds control, and what goals are set.
Control means four names, written down before day one:
- Who sets the goal and who can change it.
- Who approves spend above the guardrails.
- Who the operator reports to, and how often.
- What the owner still decides after close, and up to what amount.
With owners, there are a lot of ups and downs: one thing today, something else tomorrow. With a fund, what matters to me is that we agree on our goals. That agreement is the first deliverable of the plan.
The three goals
Is it profitability, growth, or getting processes and data organized and cleaned up? Our approach depends on the goal.
| Goal | What you do | What you don't do |
|---|---|---|
| Profitability | Cut expenses, hold headcount, review every vendor and every recurring cost | Add people, raise marketing spend, start new channels |
| Growth | Set the budget to win customers, set the pace, agree how far EBITDA may dip | Cut the sales and marketing capacity the growth depends on |
| Process and data cleanup | Write the top processes, set decision limits, get one source for customer, job and invoice data | Launch AI or new systems on records nobody trusts |
If the goal is profitability, I cut expenses as far as they go. I make cuts, no new people, no more marketing spend. I squeeze as much as I can.
If the goal is growth, we need to set how much we can spend to win customers, and how fast we want to grow.
Pick one goal for the first 100 days. A plan that tries to do all three does none.
Guardrails in numbers
I need to know how far we can dip into EBITDA. Agreeing those guardrails together is ideal for me when working with a fund.
A guardrail is a number with a name next to it. Every number below is an example. Set your own.
| Guardrail | Example | Who can change it |
|---|---|---|
| Headcount | No net new hires before day 100 | Operating partner |
| Customer acquisition budget | $40,000 a month | Operating partner |
| Growth pace | Revenue up 15% in 12 months | Fund partner |
| EBITDA dip | No more than 2 points below plan, for two quarters | Fund partner |
| Spend without approval | Up to $10,000 per item | Operator |
Write them on one page. Review them weekly, against the numbers. Only the person named changes one.
How the goal changes the 100-day plan
The 100-day operations plan keeps its three phases: stabilize and map, write the processes and set limits, then a weekly rhythm and one pilot. The goal decides what goes first inside each phase.
- Profitability: the cost review comes first. The decision map starts with spend approvals.
- Growth: the sales process and the pipeline get written first. Limits start with discounts and acquisition spend.
- Cleanup: the processes and the data come first. The pilot waits until one process is ready.
For the read before close, see operational due diligence.
Where AI fits
AI goes only where the data is trusted, the process is written and one person owns the result. You always need to know who is responsible. And it can't be AI.
How it ties to SCOPE™ by Efficiency Sprint
We install systems in companies that make them run without owners and ready for automation. SCOPE™ by Efficiency Sprint places each company in one of five states: Stabilize, Codify, Ownership, Pulse and Engine. AI starts at Pulse. The state tells the fund where the work starts, whatever the goal. More on the PE work: how we work with private equity.
Efficiency Sprint makes companies operationally ready for AI. The operational AI readiness check takes about two minutes and shows where a company stands.
Questions
Can the fund pursue growth and profitability at the same time?
Pick one for the first 100 days. The other becomes a guardrail. Under a growth goal, profitability shows up as the limit on how far EBITDA may dip.
Who should hold control after the acquisition?
One person on the fund's side sets the goal and approves spend above the guardrails, usually the operating partner. The operator runs the plan inside them. The owner's role is written down too.
What if the owner who stays disagrees with the goal?
Agree it before close, in writing. The owner holds the decisions the plan needs, so the owner's limits go on the same page as the guardrails.