The Business Group with Declining Profits
The Client
A Western Canada based business group with 7 businesses and extensive real estate holdings.
The Problem
Several years of declining profits, debt covenants that were violated, and improvement strategies that weren’t working.
The Major Risk
If profits continued to decline, they will lose the support of the lenders. With declining profits, obtaining new financing will be very difficult.
First Step, Critical Diagnosis
Profit360's proven methodologies were implemented, and the assessments discovered that;
- Manager’s roles were not defined in a way that would achieve results.
- Most essential elements for effective management systems were missing.
- The ‘Finance Function’ and ‘Reporting Systems’ were not working.
- There was no weekly dashboards or operating reports.
- There was no tracking of leads or new sales.
- There were no key indicators tracked or monitored.
- The reports that were available were not timely or useful for the day-to-day running of each business.
The owners knew that profits were declining, however, there was a very significant lack of actionable information.
Final Result, the Payoff
After Profit360's services the following results were achieved;
- Profit improvement strategies were working.
- Profits increased significantly in Year 1; all debt covenants were met.
- 5 consecutive years of profit growth followed.
- Record profits were achieved and sustained.