What an Operating Partner Actually Does

I'm launching a short newsletter called The Exit Brief — one story, one insight, one thing business owners can use. You're getting this because we've crossed paths and I think you'll find it useful.

What an Operating Partner Does

I'm an Operating Partner. The next question I always get is: what does that mean?

The answer is value creation. Value creation is different than income. A P&L shows what a business earns every year. Valuation is what a business is worth — and those two numbers are rarely the same.

Most business owners think about income because it's immediate. It's what pays the bills this year. Valuation is intangible, not urgent, and only becomes real at the moment of exit. So most owners don't think about it until it's too late to do much about it.

Private equity thinks about almost nothing else. Income isn't PE's primary outcome — exit is. So they hire Operating Partners to increase the valuation of every business they own before they sell it.

Here's the model: A PE fund raises capital from investors. The fund buys businesses. Operating Partners go to work increasing valuation. The fund sells. Investors get a return.

I believe business owners can — and should — have access to the exact same model. That's what Fenwick does. I bring the PE Operating Partner model directly to business owners with $3M–$50M in revenue, before they go to market, when it still matters.

A Real Engagement

An Operating Partner is a quarterback. You distribute the ball across the field to where it's needed most. You run the offense, use every asset on the field, and increase the score.

I stepped into a business that looked great from the outside. Profitable. Established. Three offices across two continents. 25 years in operation.

Within the first 90 days, I found this:

Keyman risk. One owner was responsible for more than half of all revenue. The other had every single employee reporting directly to him and kept all critical business knowledge in his head. No management layers. No bench. If either of them stepped away, the business was worth significantly less — maybe nothing.

Stagnant and no unified financials. The two owners had never seen a combined P&L. Three offices, three separate ledgers, no unified financial picture — for 25 years. They measured success by how much was in the bank account.

No infrastructure. No CRM. No documented processes. No HR policies. Multi-million dollar contracts written on handshakes.

This wasn't a bad business. It was an unoptimized one. And the gap between what it was worth and what it could be worth was enormous.

What Changed in 2.5 Years

We built management depth so the owners could work on the business instead of in it. We significantly grew revenue in underserviced product lines and geographies. We unified the financials across all three offices — the first time they'd seen the full picture in 25 years. We fixed the tax structure. We built a real sales team with accountability. We implemented a CRM, documented the processes, and put proper legal agreements in place.

Profit increased 20% year over year. The effective tax rate moved from 28% to 11% — cash that flows directly to enterprise value. The keyman risk — the single biggest valuation discount a buyer applies — was eliminated entirely.

Why This Matters

Whether you're a business owner thinking about exit someday, or an advisor with clients who are — the worst outcome is going to market before this work is done. Value gets left on the table, deals are harder to close, and everyone wins less.

As a starting point, I offer a complimentary Exit Readiness Assessment — a clear, honest picture of where a business stands today and what it would take to close the gap before going to market. No commitment, no pitch. 15 minutes is all it takes.