Type of business: Project and Maintenance Engineering
The business had $3.4m in revenues but was running out of cash, struggling to pay wages week to week, and was on stop credit with some suppliers. The bank was unwilling to lend more money, and the owners were unable to put in more cash. The owners were seemingly too busy working in the business. They had previously been a successful business, and had a great reputation in the market for its services, but that wasn’t enough.
How we Fixed It
We first identified the root causes of their cash flow issues. Primarily they had unbilled revenues of $180k up to 6 months old. They also had low pricing compared to their competitors, no recording of their costs against jobs, and were not charging for work in progress at the end of each month. So we implemented a rigorous 90 day action plan actioned to remedy their cash flow. We had monthly owners meetings in place to help them work on the business
We go the bank on side to support their cash flow for the next 6 months. We put plans in place to reduce their debtors, and work in progress, which saved them $250k and we generated profit by $240k a year!