Ephor’s Newsletter Q3 2020

August 2020

Our Strategic Practice Lead, Garry E. Meier has been advising, investing, and stewarding emerging BPO service businesses for nearly 25 years. Over those 25 years, he has experienced many recessionary and disruptive economic times for the small business community. In addition, he has been a senior advisor to the US Senate Small Business and Entrepreneur Committee for nearly 15 years now. 

As we migrate to the “post-pandemic and a new normal” for the remainder of 2020 and into 2021, we as small business entrepreneurs need to be aware of the many exogenous factors that will affect our business including some of the operating adjustments we all need to institute into our business models:


Trends Influencing Scaled <$50M Service Small Businesses:

  • Credit capital availability will significantly tighten. Debt capital will become a “sole source of capital” for the marginal and mediocrity-centric business models.

  • Asset-Based Lending will be more prevalent versus cash flow lending.

  • Private Capital will only be accessible to the “best and most economically efficient and scalable business models”.

  • Institutional investors will require a proven, previously “backed” proven executive or “executive chairman” to attract equity capital.

  • Valuations except for only “the best” business models, will be flat and stagnate in the near-term.

  • Small business bankruptcy rates will continue to increase and will remain at record levels.

  • Baby Boomer founder/CEOs are “surrendering” or selling their businesses at a faster rate than in previous periods. As such valuations will remain flat.

  • Consolidation activities in the BPO business services sector will be more prevalent as Private Capital/Private Equity and Family Offices increase “platform” investing initiatives, coupled with “strategic” acquiring for e growth expansion.


As such: 2021 will be a pivotal year for many BPO businesses.  As leaders, it is critical to effectively “CHANGE & ADAPT” to our fluid exogenous environments!”
Some of the more BASIC CHANGES to our business models should include: 

  • Revenue generation will need to be a portfolio” of sources: single-threaded sales processes that are solely dependent on direct sales will have the highest “failure/bankruptcy” rate.

  • Partnering and Channel Distribution will be a “Key to Revenue Growth Success”.

  • Effective Marketing and Digital Marketing to reach and engage with the “Ideal Client Target Profile” will be required.

  • Effective Lead Generation and Lead Scoring of Ideal Client Profile will be the “Key to Sales and Partnering Success”.

  • Service Business Models that are “Process Driven” versus People-Centric will illustrate cost scalability and be the most attractive for capital sources.

  • Founders/Entrepreneurs & Leadership will require more so than in the past, outside expertise that rounds out the needed “holistic” skill set required to succeed in this “new normal”.