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David reached out to us just after he read our ebook How to Double your Cash flow Overnight. He then attended our Cash Flow and Value Boost workshop in November 2018, when he decided to purchase the Cash Flow and Business Value Boost consultancy package. His business had been running for almost 30 years and although he’d managed to retain £1 million in profits, the revenue hadn’t moved much beyond £1.2 million.
He knew something wasn’t right but he couldn’t articulate what or where. On paper, the firm was performing and it had a healthy stack of cash. And it wasn’t until he started to implement his plans for management buyout that he really wanted to get answers to his concerns.
The cash flow and returns improvement opportunities
David couldn’t uncover where the real cash flow issue was and he wanted to find ways to discover what was holding the company back. He has been running this business since it’s foundation, but with size the complexities just seemed to get bigger. He had access to so many reports, but he still couldn’t put his finger on what was missing.
In March 2019, we conducted Cash Flow Boost session for David and his management team. At the session, we presented the key cash flow analytics for the business. What came really apparent was that the returns that the business was getting was not meeting the minimum expected level for its size. This gave David the clarity he was seeking, because he knew something wasn’t right but he could not articulate it.
Another important thing that came really apparent was that the business was using a lot of money to support the business cycle. And since David was going to finance the management buyout, reducing the cash cycle was fundamental in enabling the businesses to become independent of him.
With our support and guidance, David and his management team started generating resourceful ideas about shifting the numbers in the right direction. They could clearly see which cash flow drivers they needed to move and why. They were able to grasp really quickly very complex financial concepts and translate them into their business. And they had so much fun in the process. The internal conflicts evaporated. They felt like a real team again!
David, on the other hand, was so relieved to see his management team approach this very complex matter of company turnaround with such enthusiasm and passion.
Our work is not finished here though. We will be tracking the unfolding of this in the months to come and we will be providing support in the process until they are fully equipped to do this themselves.