The Evolution of Business Services: A Strategic Perspective

Ephor Newsletter Q4 2024

We at Ephor hope that your 2024 was full of achievement and progress despite the many exogenous and economic challenges we have faced.

As we usher out 2024, we have chosen to focus the Ephor Q4 2024

Newsletter on the following two objectives:

  1. We would like to solicit your input and knowledge such that we can provide to the New Trump Administration input and knowledge from “the small business community” to ensure that The New Administration provides the small businesses the kind of support programs and operating environment that will assist us in achieving “good fortune”.

  2. We want to provide some high-level guidance to the sector, both operators and investors, on how we can maximize the value from a more positive operating environment, and most importantly what are and will be the critical enterprise value drivers in the near-term that we must provide in our business models and investments.

Objective 1: The Trump Transition Team (Outsourcing Business Services) Needs by the “New” Administration

By way of background: as many of you know or may remember, back in late 2016 when Trump was first elected the 45th President; I was asked and did participate as a team member for the Dept of Commerce Business Services Transition Team. During that work effort, we outlined many of the “Pro Small Business” support initiatives that assisted our sector in the first Trump Administration and allowed us to operate within a “friendly small business” environment. The great news is, that due to Trump’s re-election, we get the opportunity to do it again, only this time we can build off on what we learned in 2016.

On November 8th, I again agreed to participate as a “special envoy” for Small Business Outsourcing Services, and once again participate with the Transition Team leads to identify the bureaucratic, unnecessary regulatory and compliance issues that are burdening us either from the Biden Administration or holdovers from past administrations.

Therefore, I am asking for your input for the Transition Team on the following 2 subjects:

  1. What are the bureaucratic, regulatory and compliance issues that you would like to see removed?

  2. What Support, Programs and Assistance can the New Administration do to support your business over the next 4 years and hopefully beyond either through Executive Orders (EO) or Legislative Initiatives?

Please take a few minutes of your time and list out with a brief explanation of each area, such that Ephor can consolidate “our inputs” into a “doctrine” document that is due to The Transition Team by 12/17/2024. The new administration intends to carry out as many Executive Orders as is appropriate on day one.

Please provide your input and thoughts. Feel free to provide your input via any anonymous venue you may choose. Our objective simply is to provide as substantive input as possible to the Trump Administration on our needs.

2. The Evolution of Business Services: A Strategic Perspective for Post-Election 2024 & Beyond

The business services landscape is experiencing and will continue to experience fundamental transformations. These transformations include having access to a global service delivery capability and talent, scalable customer acquisition costs, and upselling initiatives for current customers.

Finally, the continued labor supply imbalance in North America will continue to make for a challenging operating environment irrespective of a “more favorable small business legislative environment” due to the new Trump Administration initiatives.

We, as a sector, and our leadership have a very attractive opportunity before us to execute transformational CHANGE that will divide the sector players into those that will “tHRive” and create exponential wealth, or those that will be left behind because they just are not willing or able to CHANGE. Effective CHANGE & a Focus on enhancing our business processes and leadership attributes are now more fundamental to creating wealth than ever before.

Market Dynamics Reshaping Our Industry

The surge in outsourcing demand is expected to accelerate to annual growth of >10% -12%, beginning in the 2nd half of 2025, once the Trump Administration has the time to reinstitute its “capitalistic attributes” both in the North America and Global Markets.

To set expectations effectively, the economist we have access to suggest that it will take until Q3 2025 before we see meaningful decreases in inflation and interest rates. As such the lending community, especially small and regional banks will continue to be “risk averse” and provide limited access to growth capital in the near term.

This means there will be a structural requirement for CHANGE and how we operate and deliver value to overcome the short-term lack of access to capital.

What makes this evolution particularly noteworthy is that it represents a unique and timely opportunity to create exponential wealth and Enterprise Value that we have not enjoyed for nearly 5 years now. Over the next few months, we at Ephor will be providing the sector leadership teams and institutional investor community our guidance and learning, which represents our 24 years of learning, experience and results as stewards, investors, advisors, and operators in the sector.

As a preview, this guidance and learning are sorted into Seven Critical Value Drivers:

Seven Critical Value Drivers

  1. Consistent Revenue Growth & Profitability (EBITDA)

  2. High Client Retention & Customer Satisfaction

  3. Diversification of Services and Expansion of Client Base

  4. Productization of Services into Service Packages

  5. Hire, Train, and Retain a Skilled and Productive Workforce

  6. Implementation & Utilization of Technology & Innovation as a “Core Competency”

  7. Leadership Teams that Illustrate -The Ability to CHANGE and Adapt

In closing; as you embark on preparing your operating plans, budgets, strategic initiatives etc., for 2025, we would guide you at a minimum to include these 7 business model attributes & processes in your objectives and milestones as “Value Drivers”.

At Ephor we wish you and yours only the best as you conclude 2024 and a holiday season that is filled with joy, love and quality family time!

We thank you in advance on your input to the Trump Transition Team Initiative & All the Best in 2025.

Garry E. Meier

Strategic Practice Lead

Ephor Group, Inc.