When Jerry first came to us things did not look too great in his business! On average, over the previous 4 years, they were spending 322% of gross profit on operating expense.
After 12 months of working together, they spend 8% of gross profit on their business operating expenses.
They also now have very healthy positive cash reserves.
A significantly smaller (and much more effective) team.
And some considerably more happy investors.
A completely incredible turn around in his business which is now set up to flourish for years to come.
How did he do it?
He implemented the Profit Plan and Profit First
Step 1 – Where are we know.
We looked at the business, got the numbers in order, accurate and making sense.
Step 2 – Where do we want to be.
We draw up a forecast and financial plan for the business.
Step 3 – Addressing the Money Leaks!
We looked at where money was leaking from the business, and there were quite a few places that the leaks needed to be plugged.
Step 4 – Tweaking the plan.
We reassessed the plan now that we were plugging leaks.
Step 5 – Work the plan.
We worked the plan, month by month, getting us closer and closer to the ideal position; working with stock ordering and when that needed to be done.
Step 6 – The finance team.
Jerry outsourced his entire finance function to us to make sure that everything would run smoothly and someone would always be keeping on top of the finances.
Step 7 – Daily, weekly and monthly habits.
Together we established who needed to do what each day, week and month for his targets to be hit and we worked out responsibilities and accountability structures which worked for the business and us, as the finance function.
Step 8 – Feedback loops & Dashboards.
Making sure you know what is working and what isn’t working is critical to moving towards a significantly more financially healthy business.
We have to keep track and monitor the data to ensure that we are making the right decisions as a team and making sure that we are moving the business towards where it wants to be and we implemented this with Jerry.
We present the data in easy to read and quick to understand Dashboards so that the business knows where it stands against KPIs and targets at any point in time; this is crucial for a CEO to run an efficient business.
Step 9 – Find the hidden money.
Once we have the money leaks and systems sorted out, the next thing is to see where the hidden money is.
It can be really easy to chase the next sale, to be looking at lead generation when some things are right in front of you. We are great at finding money being left on the table and we did exactly that with Jerry.