The Client:
A small professional services firm.
The Ask:
Help us pitch our bank for more financing to support our growth opportunity.
The Reveal:
The company’s ability to grow was being held back by not having enough cashflow. They were challenged by the exceptionally long lead times of getting paid on their mostly government and institutional project revenue, all while having to cover their weekly salaries and work expenses. When they finally did get paid they were in a constant cycle of catching up.
Although additional financing would give the company a short term lift, our analysis and projections revealed that increasing debt would actually do more harm than good. Even if the bank gave them more money to work with, the added obligations would in short order lead the company toward insolvency. They didn’t need more money they needed a better business design.
The Solution:
enabling ideas® began by leading the company founder and management through a combination of our Financial Achievement, Risk Management, Strategy and Sales Solution Modules. Then provided a Fractional Operating Officer to lead the implementation.
The answer to financing their growth wasn’t getting more money from the bank but by generating more consistent cash from the business with better operating income management. A re-designed sales model with more short term quicker paying projects, intermixed among the major growth projects, created more consistent cashflow. A more efficiently administrated work / billing model created better matching of incoming cashflow to outbound expenses greatly relaxing the weekly strain.
The Impact:
Through business and operating redesign the company generated enough additional free cashflow to not only run it’s operations, but also pay down debt and launch a new division. And now with a better balance sheet, negotiated improved terms and incremental financing for further growth.
Best in class, working with Best in class.
enabling ideas® and our Expert Partners work with some of the most prominent companies and organizations across North America.
