Our Life through Private Equity
Stumbled upon this great article “This is your life, Brought to you by Private Equity” in the NY Times sent by my girlfriend. It’s definitely more pictures than words, but it does a great job simplifying the world as we know it run by private equity firms. private equity firms manage more of the world’s wealthiest people’s money, one way they can invest and grow their funds is to buy smaller or failing businesses, turn them around, and help to make them profitable again.
I think it’s necessary to say that I’m a big believer in business, especially business done well and executed well. With the right processes in place, services can be run in the best ways that serve people and communities as well as providing a profit. I think we all need to think of creative and innovative ways to run our businesses to that they are successful in doing their duties. That’s just a given in business. We all need to strive towards doing something better. There’s so many things to take into account for every business, in terms of how much of a profit should you be focusing on to where it slows down or deteriorates the service in order to gain a profit.
“When you Dial 911 and Wall Street Answers” is an article that is a part of this series that opens up a bit more into how private equity firms have bought companies that take care of services such as emergency ambulance and firefighting. Personally I didn’t even really know that there were private firms that provided these services, though I knew of some of these services there were performed by volunteer groups, like the volunteer fire department in Ithaca.
It is a scary thought knowing that services that save lives are put into the hands of firms whose sole purpose is to turn a quick and fast profit. I an only imagine that efficiently running these firms in ways that best serve the people might not neccessarily be ways that reduce the most cost or bring in the most profit.
It’s through private equity’s strong desire to turn around these service firms that provide lifesaving services for a strong profit that worries me. Because as we look into these services, many of these services are very costly to perform and need to be done on demand, which also brings up cost. And as you think about how to cut costs and raise prices, we are raising prices on people’s well being or very lives. So maybe we need to understand that there must be certain standards that must be met before cutting any costs or changing processes.
If changes need to be made, which of course they need to if the company is failing, placing certain restraints on your possible decisions is actually a great way to work your creative muscles. I hope that with private equity firms that deal in these types of companies, that they would take the extra step to analyze what ways they can save a company while still upholding a high standard of service that saves lives.
These might need to be innovations in supply chain or working out systems where you can almost predict needs before they arise in order to be prepared for them. Let’s think of a hundred possible solutions, even if 99 of them might not work, just one will be what you might need to fix the company and make the company a great addition to the world, not just a good return on investment.