workflow-pe-value-creation-plan

# PE Value Creation Plan ## What this skill covers A structured plan for generating returns beyond financial engineering. Covers revenue growth levers, cost levers, an EBITDA bridge from Year 0 to exit, a 100-day quick-win plan, a KPI dashboard, and the impact on LBO returns. Every initiative is quantified — unquantified initiatives are deferred to the watchlist. ## Core principle Returns-focused. Every initiative connects back to its EBITDA impact and the resulting IRR/MOIC uplift. If an initiative cannot be quantified, it is categorised as "exploratory" and excluded from the returns model until a defensible number is available. ## Workflow ### Step 1 — Revenue levers For each lever, specify: initiative, responsible owner, estimated EBITDA impact ($M), implementation timeline, and confidence level (high/medium/low). | Lever | Description | Est. EBITDA Impact | |-------|-------------|-------------------| | Pricing optimisation | % price increase, assumed volume impact, net revenue | computed | | Cross-sell / upsell | Attach rate improvement × revenue per customer | computed | | New market entry | Geographic or vertical expansion, addressable TAM | computed | | M&A bolt-ons | Target profiles, expected multiples, synergies | computed | ### Step 2 — Cost levers | Lever | Description | Est. EBITDA Impact | |-------|-------------|-------------------| | Procurement savings | Renegotiation, consolidation, volume discounts | computed | | Operational efficiency | Headcount, process improvement, automation | computed | | SG&A rationalisation | Real estate, T&E, professional fees | computed | | Outsourcing / shared services | Function, expected saving, timeline | computed | ### Step 3 — EBITDA bridge Year 0 to Year 5 (or exit year), initiative by initiative: | Item | FY0 | FY1 | FY2 | FY3 | FY4 | FY5 | |------|-----|-----|-----|-----|-----|-----| | Starting EBITDA | actual | | | | | | | + Organic revenue growth | | | | | | | | + Pricing improvement | | | | | | | | + Cost savings | | | | | | | | + M&A contribution | | | | | | | | − Integration costs | | | | | | | | = Target EBITDA | | | | | | | Each row is a separate VCP initiative, allowing attribution of total EBITDA uplift. ### Step 4 — 100-day plan **Quick wins** (deliverable within 100 days with measurable impact): - Specific action, owner, success metric, target date **Organisational changes** (key hires, reporting structure, governance): - Role, rationale, recruitment timeline, interim coverage **Strategic priorities** (DD follow-up items, early M&A outreach, system improvements): - Action, owner, timeline, dependencies **Communication plan** (employees, customers, suppliers, regulators): - Audience, key message, medium, timing ### Step 5 — KPI dashboard with milestones **Monthly KPIs**: - Revenue: actual vs budget vs prior year - EBITDA: actual vs budget, margin trend - Free cash flow: generation, WC movements - Capex: actual vs budget, maintenance vs growth - Headcount: by function, new hires, attrition **Quarterly milestones**: - Initiative progress: on-track / at-risk / delayed - Budget vs actual variance with bridge - Covenant compliance headroom **Annual targets**: - EBITDA target vs plan, leverage reduction, VCP delivery % ### Step 6 — Model impact on returns Call `lbo_model` with VCP assumptions (the "VCP case"): - EBITDA growing per the VCP bridge - Compare base case (no VCP initiatives) vs VCP case - Quantify IRR and MOIC uplift from each initiative category - Call `sensitivity_matrix` varying VCP delivery % (100% / 75% / 50%) vs exit multiple ## Output format 1. **Revenue lever table** — with EBITDA impact and owner 2. **Cost lever table** — with EBITDA impact and timeline 3. **EBITDA bridge** — year-by-year, initiative-by-initiative 4. **100-day plan** — quick wins, org changes, priorities, comms 5. **KPI dashboard** — monthly/quarterly/annual metrics with targets 6. **Returns impact** — VCP case vs base case IRR and MOIC; sensitivity grid ## Quality gates - [ ] Every initiative has a quantified EBITDA impact (no unquantified items in the bridge) - [ ] EBITDA bridge ties from Year 0 entry EBITDA to Year 5 target EBITDA - [ ] 100-day plan items have owners and dates; quick wins are genuinely achievable in 100 days - [ ] KPI dashboard metrics are measurable from existing reporting systems - [ ] VCP case modelled in LBO and compared to base case; uplift quantified - [ ] VCP EBITDA bridge consistent with IC memo Section V thesis pillars ## Related skills - `workflow-pe-ic-memo` — Section V (Investment Thesis) draws on VCP revenue and cost levers - `workflow-pe-returns-analysis` — VCP case feeds the upside scenario in the returns model - `workflow-pe-portfolio-monitoring` — tracks VCP initiative delivery quarter-by-quarter - `workflow-pe-ai-readiness` — AI opportunities scored and ranked, top items promoted to VCP