Case Study 1: Managing for Profit
It sounds obvious doesn't it, after all profit is usually the ultimate objective. But most businesses actually manage for sales, assuming (or rather hoping) that more sales will lead to more profit - but they often don't!
This international business increased its margin by 4% in just 12 months - effectively doubling their profitability. How? Simply by us generating the right information to allow the directors to make better, profit orientated, decisions.
The sales team now know which offering to focus on - and their commission is based on the profit they contribute. The Directors can clearly see which parts of the business generate the most profit, and can easily make the right investment decisions.
Case Study 2: Rearranging Bank Facilities
As many other well run businesses know, early 2009, with the banks in turmoil, wasn't a great time to have to change facilities. An initially "jittery" bank, were quickly brought around by:
- Implementing a straightforward financial model in Excel ®, to accurately predict profit and cash flow.
- Extending the model to produce a three year forecast.
- Generating a rolling forecast by making the model easy to update with actual monthly results.
The clear visibility given by the financial model for both the short and long term provided the bank with the assurance they needed to agree the requested changes to the bank facilities.
Case Study 3: Generating Cash
As the credit crunch hit in 2008, this client started to find UK customers paying much later than usual,putting a strain on cash flow. The existing informal collection approach was quickly replaced with a new formalised - but still customer sensitive - process.
Overdue debts were reduced by 40% in just 3 months, generating over £50k cash. Profit has also improved due to a lower requirement for bad debt provisions.
Case study 4: Business Disposal
A strategic review confirmed that this business had higher value to a different owner. We carefully managed the "preparation for sale" process: refining financial projections; collating all key information; identifying risks and opportunities; presenting the financials to prospective buyers; and managing the due diligence process.
After a very intense 6 months with multiple interested parties, a trade sale was concluded at a price more than 30% higher than originally expected.
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