Next Level

Case studies – Business Development

Established business with falling profits

An established business had sales of £6m with sales rising every year but profits had been falling every year for the last four years.

• Reviewed the last 5 years financial results to analyse ratios and trends.
• Established that gross margins were falling every year, overheads were rising every year and that in about 6 months time the business would move into loss making unless those trends were reversed.
• Highlighted items which were not achieving a satisfactory level of profitability and the company dropped some items and re-priced others.
• Terms were re-negotiated with certain customers.
• A new sales manager was appointed.
• Worked with the sales team who had got into the bad habit of getting sales by discounting and showed them how this was putting the business at risk and the company issued guidelines to limit discounting.
• Changed the basis of remuneration so the sales team were profit focused rather than volume focused.
• Held a meeting of all employees to explain the position and why changes were being made to engage everyone with the new approaches.
• Overhead savings in excess of £200K pa were identified.

Nine months later the Company made more profit in one month than it had the whole of the year before we started working with them.

Rapidly growing business

A successful business was growing rapidly. The directors were very experienced in their fields and needed to develop a middle management team to grow and develop as the business continued to grow.

• Reviewed business processes including who did what.
• Worked with the Board and managers to develop and operate a business planning process.
• Developed KPIs as part of the planning process and a monitoring process.
• Established a performance related bonus scheme for managers.

Directors now focus on their key roles with tasks delegated to managers and results monitored against targets. The business growth continues to accelerate and the management team grows in confidence and is able to support the growth of the business.

Relatively new business

The business model was proven over a period of about one year and was at break even but the MD was not able to take any time away from the business which operated seven days a week and was working long hours for little income.

• Established what the MD wanted from the business in terms of time and income.
• Developed a long term business plan to set a “destination” and a short term plan to start on the journey.
• Worked with the MD to develop a management team and put in systems and control which enabled the MD to take time off on a regular basis and go on holiday with the business running efficiently in their absence.
• Worked on the gross margin and overheads (mainly payroll).

By month 3 the MD was able to take time off every week and a holiday every quarter.

Six figure profit at end of Year 3.

Business performing in the top 3% of its sector.

Established business hit by recession

An established business in a sector hit badly by the recession was in real danger of its bank withdrawing or reducing facilities which put the future of the business at risk.

• Developed a realistic business plan with the directors which demonstrated the viability of the business.
• Met the Company’s bank with the Directors and presented the business plan which was accepted and facilities increased.
• Worked with the Directors to help them achieve the business plan.
• Reviewed all business processes and identified items being done by the MD which took him away from sales and profit generation.
• Improved business processes, changed roles and responsibilities of key people to allow the MD to delegate more.

Results

• Increased facility from bank.
• Systems put in place to allow more work to be delegated.
• MD freed up to spend more time on getting in new business and control costs to improve profitability.