Question 1

What does The ProAction Group do?

Accepted Answer

The ProAction Group is an operations consulting firm that helps businesses identify and extract hidden value within their operations. We specialize in improving throughput, reducing waste, increasing profitability, and preparing companies for sale or succession. Our approach is hands-on and data-driven—we walk the floor, talk with your team, and execute measurable improvements.

Question 2

How do you uncover “hidden value” in a company?

Accepted Answer

We identify inefficiencies, workarounds, and waste in your processes—what we call “Black Gold”—by evaluating capacity utilization, pricing strategy, supply chain performance, and segmentation of customers and products. Our methodology is based on the strategies outlined in the upcoming book Shocking Profit, and has helped over 500 companies find 20–50% more profit within their existing operations.

Question 3

We are working hard to build a good rapport and working relationship with the leadership team during the pre-close exclusivity period.  How do you perform an operational diligence without adding unneeded stress to the situation?  We are already doing a financial audit, environmental, legal…

Accepted Answer

• We start by being respectful, and courteous, and genuinely interested in the processes and culture the acquisition target has built. We listen to Leadership about their business, what they’ve worked hard for, and their vision for the company. We look for the good stuff we can honestly compliment them on. We recognize the positive outcomes of their investment, and in the process discover what we need to know for your decision on whether to invest (and how much) – negative surprises, hidden value, and the path to scaling the company.

Question 4

What does the operational diligence process look like - from start to finish?

Accepted Answer

• Prior to the site visit, we meet with the deal team to understand your view of the investment thesis and to learn your early view of the leadership team. We review the Confidential Information Memorandum of the Target company prior to an on-site visit. During the site visit, we meet the leadership team and learn about the business. We tour the facility and observe. At the end of the visit, we thank everyone and comment on the truly positive things we can honestly compliment. Finally, we write the final report from the client’s investment thesis perspective, including negative surprises, hidden value, and the path to scaling the company.

Question 5

What are some of the main “negative surprises” that you can expose during an operational diligence?

Accepted Answer

• The negative surprises fall into a few buckets. At the end of the day, we are looking to:
   1. Calculate how big of a check you will have to write AFTER you write the check.
   2. Identify risks that can be addressed with appropriate attention and time.  And, if they are not addressed, expose the company to potentially equity crushing situations.
   3. Identify risks that will require complex solutions, investments and/or a change outside the company’s direct control.
   4. For each of these risks we will then outline the steps, costs and timeline to:
      1. Eliminate the risk
      2. Manage the risk
      3. Mitigate the risk
 • Some of the risks we look for in an operational diligence include:
   1. Reliance on tribal knowledge 
   2. A dependence on key personnel vs. a cross-trained team, especially key individuals that will receive a life-changing check.
   3. Hidden CAPEX, such as worn production equipment that looks good but requires near-constant adjustment
   4. A volatile supplier or supply chain, which adds risk to order fulfillment
   5. The stated capacity is inaccurate and either over or under stated
   6. The company has an ERP system, but it’s not effectively used. This could require a new ERP system, a re-launch, or behavior modification / new processes.
   7. The management team isn’t going to be able to execute the investment thesis
   8.  The company will need to add personnel in key roles or make other investments to continue current performance levels.
   9. There is one or more risks that could lead to the company going down in EBITDA or another key performance area.

Question 6

What are the main deliverables included in an operational diligence?

Accepted Answer

• Building a unique bridge between the buyer and the seller that a pure financial deal team may not be able to accomplish.We build rapport with the seller by understanding, and reflecting back to them, the complexity and challenges related to running their business.
 • Answers to these questions - Can the company realize the investment thesis? What negative “surprises” should the investor expect post close? What is the impact of the “hidden value”? Are there obstacles to scaling this company? How much effort and cost will it take to address the risks and realize the hidden value?

Question 7

What is the difference between an operational diligence and an operational assessment?

Accepted Answer

• In short, an assessment is a review of an existing portfolio company.  A diligence is a review of a target acquisition, pre-close.  The process and the information gathered for each is very similar, but each differs in perspective and urgency. A diligence is a buy-side service, where there’s competition for the deal, making it time-sensitive (urgent) and the question is – should we buy this company?  An assessment has no “deal” urgency because you already own the company, and the question now becomes – how do we add more value to this company?

Question 8

What do we communicate to the seller during the operational diligence process?

Accepted Answer

• We look for opportunities to give honest compliments on what they do well.  Often this includes the dedication of their people, isolated high performing processes, and evidence of customer loyalty.  
 • We also will acknowledge and vet with the management team, the complexities they face in filling demand well. Another way of thinking about this is, what does the seller believe makes them unique?What do they view as special about their business that needs to be considered when evaluating any future state, change, or new process?
 • We never communicate any unstated risk we see.  We update the deal team and let them decide what to share and when.
 • We never communicate any hidden opportunity we see.  We update the deal team and let them decide what to share and when.
 • We follow the seller’s / bankers’ lead on how we introduce ourselves.  Often, we are introduced as bankers, consultants working for the owner / seller, or even prospective customers.

Question 9

What are the critical success factors to getting the value of an operational diligence?

Accepted Answer

• Build a positive relationship between the buyer (your client) and the seller. Listen to your client to understand their investment thesis, and listen to the seller to understand why they’ve built the processes the way they have. Be respectful of the transaction and recognize that we may be in a position to be a bridge from the present to the future.

Question 10

How many operational diligences have you completed?

Accepted Answer

• Over the past 27 years, we’ve completed hundreds of operational diligences across many industries.We have completed these reviews for over 90 different PE firms with more than half taking place within the last five years. These have been done primarily in the manufacturing, distribution, consumer goods, and food industries.

Question 11

Who goes on site during an operational diligence?

Accepted Answer

• Typically, one or two consultants will be onsite for one or two days – depending on the size of the company, the number of sites, and the type of diligence the buyer is requesting. Total time for a diligence project is typically three weeks. We always provide preliminary observations about halfway through the project. This communication helps mitigate possible surprises for the buyer and allows for the diligence to be further honed during the last 7-10 business days.

Question 12

What questions will an operational diligence answer?

Accepted Answer

• Answers to these questions: Can the company answer the investment thesis? Are there any negative surprises? Is there hidden value? Are there obstacles to scaling this company?

Question 13

Is this operational diligence tied to a Quality of Earnings report, otherwise referred to as a QofE?

Accepted Answer

• The intent is similar, but they are framing different environments. A QofE report looks only at the past – what are the real earnings of the acquisition Target, what EBITDA currently is. An operational diligence recasts what EBITDA should be.
 • Often, our PE clients schedule the operational diligence to take place after the QofE substantiates the EBITDA.

Question 14

What does The ProAction Group do?

Accepted Answer

The ProAction Group is an operations consulting firm that helps businesses identify and extract hidden value within their operations. We specialize in improving throughput, eliminating waste, increasing profitability, and preparing companies for sale or succession. Our approach is hands-on and data-driven - we walk the floor, talk with your team, and execute measurable improvements.

Question 15

How do you uncover “hidden value” in a company?

Accepted Answer

We identify inefficiencies, workarounds, and waste in your processes - what we call “Black Gold” - by evaluating capacity utilization, pricing strategy, supply chain performance, and segmentation of customers and products. Our methodology is based on the strategies outlined in the upcoming book Shocking Profit, and has helped over 500 companies find 20 - 50% more profit within their existing operations.

Question 16

What industries do you specialize in?

Accepted Answer

We work with mid-market companies in:
 • Manufacturing
 • Distribution
 • Industrial Services
 • Consumer Products
We also partner with private equity firms looking to improve performance across their portfolio companies during the hold period or post-close.

Question 17

What is Operational Diligence?

Accepted Answer

Operational Diligence is a deep-dive analysis of a company’s systems, processes, and capabilities. It’s a core part of our work with private equity clients, helping assess true EBITDA potential, identify risks, and prioritize improvements - beyond what financial statements can show.

Question 18

Do you just recommend improvements or help implement them too?

Accepted Answer

We do both. We provide the insights and roll up our sleeves to work alongside your team. From strategic pricing and inventory right-sizing to supply chain optimization and throughput acceleration, we stick with you until results are delivered and sustained.And we address root causes by reverse engineering the improvements to achieve a designed future state.

Question 19

How much profit improvement do clients typically see?

Accepted Answer

Many clients experience a 38%+ increase in profitability without adding equipment, labor, or technology. The gains come from smarter segmentation, optimized pricing, better velocity, and empowered teams.

Question 20

Can you help prepare my company for sale or a transition?

Accepted Answer

Absolutely. We help business owners position their companies for maximum value at exit by increasing EBITDA, reducing risk, and documenting repeatable systems. We also help buyers post-close to integrate and accelerate value creation plans. This would be a sell-side diligence or Quality of Operations (Q of O).

Question 21

How do you work with private equity firms?

Accepted Answer

We support private equity groups with:
 • Pre-acquisition operational diligence
 • Post-close value creation initiatives
 • Turnaround consulting for underperforming assets
We act as your operational partners to unlock portfolio company potential and deliver measurable ROI.

Question 22

How quickly can we get started?

Accepted Answer

We typically begin with a discovery call and can launch an assessment within 1-2 weeks. Our initial reviews often uncover high-impact opportunities in the first few days on-site.

Question 23

What is the “Shocking Profit” book about?

Accepted Answer

Shocking Profit, coming Fall 2025, reveals the strategies The ProAction Group uses to uncover and unlock hidden value inside companies. Based on 25+ years of experience and 500+ operational projects, it’s a practical guide for business leaders and investors seeking to dramatically improve performance.

Question 24

How do I get in touch with you?

Accepted Answer

You can fill out our contact form, schedule a free consultation, or call us directly. We’d love to learn more about your goals and how we can help uncover your hidden profit.

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