Showcases

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Background:

Profit Guard engaged directly with the company’s owners. These ambitious leaders were obviously very good at what they do. They had well-established contacts across their community, which resulted in a long list of client orders. The company had also just applied for a loan from a major bank. The loan was refused, although the lender expressed their regret, going out of their way to praise the company’s owners for all that they had achieved in the manufacturing industry (namely the number and types of clients won). The big issue was profitability. The company had lost several hundred-thousand dollars in the previous year, and they projected an even bigger loss that year. A bank loan would have allowed them to increase working capital while reducing per-unit manufacturing costs, so the owners felt stuck in an unfortunate loop.

The Strategy:

With a broad set of issues in play, this project required a step-by-step approach: beginning with high-impact items and drilling down (bit by bit) to optimize every last detail of finances and operations. The engagement required us to conduct a thorough review of product pricing, the methodology for creating estimates, the financial structure, and the quality of bookkeeping. 

To help this client reach their evident potential, the consultation followed these targeted steps:

• Gain clarity on the company’s current shortcomings and future targets.
• Identify gaps in their processes around cost estimates, actual expenses, and the management of the gap in between.
• Develop insights into current practices around estimating, then aligning those practices with the newly formalized company targets. By re-assessing profitability, we were able to determine the right requirements for skew-by-skew estimates, balancing competitiveness with profit margin.
• Provide reassurance that prices could be raised without losing clients. For a high-end manufacturer’s clientele, a desire for quality will always stand above budgetary concerns. This belief was born out when prices increased and client retention still remained strong.
• Define rotating priorities on the positive path forward. By changing the methods of estimating and tightening up procedures involved in cost accounting, purchases, and sales, the actual expenses and sales invoices came under control. These wins did not require a reduction in services levels.

The Value:

Only three months after the engagement began, the leadership had confidence (backed by proof) that improved pricing and estimating procedures was paying off. The first big signs were visible. Refinements brought cashflow into the black, boosted gross profit, and turned net profit from a multi-hundred thousand dollar loss to a multi-hundred thousand dollar windfall: a swing of almost half a million dollars in a single quarter. With equity and profitability greatly improved, the company was then able to secure a bank loan to fund working capital.

Background:

A popular business group had been bringing owners together for more than a decade: hosting mixers, offering group discounts, promoting members to a wide audience, and advocating to local government. The Covid years took a toll. New memberships froze, in-person events came to halt, and income steeply declined. Profit Guard stepped in to keep this Society from having to close its doors permanently.

The Strategy:

This project required close collaboration with the organization’s Board of Directors. Together, we developed a series of “what if…” scenarios, carefully spelling out the potential risks and benefits for each case. The exploration hit on a series of initiatives that were most likely to bear fruit, and that each Board member could commit to.

The subsequent consultation followed these targeted steps:

• Gain insights into revenue drivers, objectives, and why incoming funds were declining.
• Identify offerings and activities that did not give a traceable returns on investment.
• Develop new, enterprise-level sponsorships backed by personal commitments from the Society’s well-resourced champions. These community leaders funded a fresh round of events, which were well attended immediately after the isolation of Covid lockdowns.
• Prove to the Board of Directors that, instead of cutting costs or eliminating salaries, the Society should invest in a new-membership drive. This would leverage the major appetite for the return to in-person events and increase revenue. 
• Define the number of annual memberships required to break even, and set rotating priorities to help drive profitability well beyond that.

The value:
After a six-month engagement, the Society has stabilized finances and new members rolling in. These funds have been strategically used to increase the value of membership, which in turn help to grow the group’s membership. The Society has recovered from the difficult Covid period, and it is now executing new initiatives in each of its verticals.