Allen Lane

1. What did Allen do right?
Throughout the case, Allen Lane took a number of the right steps as part of his business evaluation strategy:
• Allen had substantial consulting experiences since graduation from business school that he leveraged in choosing the right “business fit” for his skill-set. With an MBA in manufacturing and work experience in distribution, inventory control systems and consulting, Allen made the right decision to stay as close as possible to his knowledge-base and skill-set. He focused on distribution businesses since they were usually undermanaged and had potential for high returns through better management.
• Allen decided from the start that he wanted to purchase a going concern rather than a new start-up. He rationalized that given his current position, start-ups would be too risky and he was more of a “fixer” than a “creator”.
• Unlike many entrepreneurs, Allen was very patient in his investment hunt.
    ▪ He stated that he had the time and resources to wait for a good deal.
    ▪ He performed thorough due diligence of all potential ventures.
    ▪ He developed a very thorough and consistent specs list that diversified financing and formulized the acquisition process.
• Allen set a focus prior to beginning his process, because he felt that unless you know where you going, you were bound to pick the wrong path. Goal orientation is very helpful, especially when choosing to purchase a business where anyone can be easily influenced by the surface fit of a potential venture.
• To save resources and time, Allan only approached ventures that he received some form of recommendation on. He never went on a cold call and made sure before even approaching a seller that the business was advised by his network of contacts.
• Allen was very thorough in his search because of the great number of network relationships he had developed. He spoke to everyone and anyone, from lawyers, accountants, customers, suppliers, banks and close friends....