Business Plan Case Studies

The following case studies are examples of clients that we have worked with over the past few years. In the case study we talk about what the issue was, how we worked with them and the outcomes.

List of case studies:

How one business avoided raising capital from investors.
How one owner increased his asking price by $1 million dollars.
How one business embarked on equity funding.

How one business avoided raising capital from investors
A chemical processing operation with a secret formulation for environmentally friendly products was struggling to make a profit and fund their expansion activities. The sales process required a significant front-end expense, however the pay-off would be small sales over a number of years. In order to solve this problem, they planned to raise investment capital through an investment banker. Because of their slow growth, the investors were skeptical ( catch 22 ) and wanted a complete business plan presented related to the opportunity.

What we did: Before starting this business plan, we looked at the whole business model. It became clear that it was going to be difficult to attract investors with such a slow return on their funds, so we investigated other ways of selling and distributing the products. We were able to change the method of selling so the costs were much lower and the returns much higher and faster.

The result: "Mr. Smalley assisted us in analyzing our business model and as a result of his critical feedback we changed our approach and launched a new program. Within 6 months the program resulted in the business generating a significant profit for the first time."

Lessons learned: The best place to find funding for expansion is internally! And sometimes you can achieve this when all your experience tells you otherwise.

How one owner increased his asking price by $1 million dollars
A small business owner was nearing retirement and was interested in selling his business. Several business brokers had approached him. They wanted fees to prepare a business profile so they could market the business.

What we did: First we recognized that the broker wanted to do the transaction, but was really not interested in maximizing the price. As a result, we told the broker that we would prepare a full business plan to aid in the selling process.
The business had operated with at about 5% growth over the previous 3 years, and was profitable. During the preparation of the business plan the owner stated emphatically that he had resisted letting the business get any bigger because he felt that he could not manage it. We produced a business plan that showed a growth rate of about 20% per year, and valued the business based on this future growth.
I was concerned that the prospective buyers would not believe the forecast and completely discount the future value of the business. We agreed to run the business for another year where we would execute some of the strategies that were outlined in the plan. Within a few months the business growth increased, and we finished the year 20% higher than the previous year.

The result: The broker was forced to value the business $1 million higher.

Lessons learned: It pays to prove your point.

How one business embarked on equity funding
This business specializes in helping children with severe reading difficulties. They had invested $1 million in the development of a breakthrough approach that was being heralded by the remedial reading experts all over North America.
This business was in need of additional funding to get out of the development stage and into the commercialization stage.

What we did: We reviewed the current business model and produced cash flow requirements, then looked at various competitors business models and projected those cash requirements. After an in-depth analysis of each we selected what we felt was the best business model and developed a full business plan around it.

The result: "We had followed the advice of other so-called advisors, only to continue to be frustrated with our business model and financing activities. Mr. Smalley was like a breath of fresh air; his advice was focused, specific and accurate. He helped us refine our business model with his savvy advice, and then produced an investor ready business plan. Our plan has received excellent reviews from sophisticated investors and investment bankers with comment such as best plan I have seen in a long time. We would highly recommend his services."

Key to Success
My key to success is my overall understanding of business, from finance to sales and marketing, to shop floor operations and engineering. My broad understanding and exceptional troubleshooting skills is my key to success.

I hope I have the opportunity to help you with your business planning.

Please give VenPlan Inc a call.

Next learn more about our principal consultant, Ray Smalley.