Business To Business
Client Situation – AT A GLANCE
- Inaccurate accounting
- 1 Customer = 60+% of revenue
- Family-owned and operated business that employed a number of family members
- Industry rules / regulation changes that were significantly impacting many areas of the business
- Losing $150,000 in 2013
- Established Key Performance metrics in Production, Sales and Customer Service.
- Found a good accountant to work with the leadership team to identify and correct important issues
- Diversified customer base so that no customer is responsible for more than 20% of monthly revenues.
- Trained GM to allow for more business owner time off
- Made necessary expense reductions to get to Break Even within 120 days.
- Negotiated compensation terms with owner operators to share risk
- Reduced fixed overhead costs by eliminating unproductive assets
- Increase Net Profit to $358,000 in 2015. A change of over $500,000 in 3 years
- The business owner is now working about 20 hours/week, owns the property he rents and has a strong exit plan in 2017
HERE’S THE STORY
A family-owned business for over 30 years. The owner purchased the 1-truck business from his father in 1983 and has grown the business to over 30 trucks serving customers in the Mid-West. The frustration was that although there was good revenue volume, the bottom line profit was not there.
The business owner reached out to Advanced Business Coaching in 2013 in hopes that we could provide a path through the challenges they were experiencing. After a thorough Alignment /Roadmap with the client, team members, vendors and suppliers, we were able to see a clear picture of the current situation and present a long-term plan to achieve the short and long-term goals envisioned by the business owner.
Immediate focus was placed on expense reduction and strengthening the balance sheet of the business. Cutting costs, liquidation of assets and alternative financing options were evaluated and implemented over the first 120 days to stop the ‘financial bleeding’. During this period, we also developed a clear understanding of employee productivity, contractor expectations and how those things related to Margin contribution to the business.
One major long-term risk to the business was that a single customer was responsible for such a large portion of revenue. We created a strong marketing/sales plan to generate new customers. Over the next 8 months, we were able to increase the number of customers so that no customer was responsible for over 20% of revenue.
The following 36 months have been focused on integrating cost-saving technology and systems to the business. The desired results were to have a strong reliability in the key performance numbers being generated and then the confidence to make management decisions based on that data. Internal accounting software was integrated within the business to automate and streamline information flow. The result was improvement in cash flow and better management of AR systems.
Industry-specific load management software was integrated to allow for the automated and detailed tracking of all aspects of the customer experience. From load assignment to Accounts Receivable, the software allows for faster, more accurate information flow.
These upgrades positioned the client to be very well positioned to take advantage of industry changes. These changes resulted in 2015 being the strongest year ever.
In late 2015, the business owner purchased the building he’d been renting for 9 years, opened a brokerage business to compliment the current production available through the trucking company and outlined his exit plan from the business in the next 3 years.
To your success,
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