Case Studies

The following case studies are examples of clients that I have worked with over the past few years. All came to me with problems, and in many cases the owner concern was really a symptom of an underlying issue. In the case study we talk about what the issue was, how we worked with them and the outcomes.

Remember that the process of growing a business is not a one-shot miracle. No single business strategy or tactic can be responsible for doubling or tripling a business.

It takes commitment and it takes time and it takes action to achieve sustainable results.

List of case studies:

How a manufacturer solved their cash flow problems.
How two partners solved their communications problems.
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 a manufacturer solved their cash flow problems.
This owner was losing sleep every Wednesday night worrying about making payroll on Thursday morning. It was so bad that he considered selling the business.

The business was growing, and was always short of cash. There was always equipment to buy, vendors to pay and employees to pay. Customers had to be hounded every week. There were several times when they paid to have customers send checks overnight, so they could be deposited in the morning before payroll would be withdrawn from the bank.

What we did: I worked with the customer to prepare a comprehensive cash flow forecast for the next 12 months. We reviewed all the things that were placing pressure on the cash flow, and then developed a plan to refinance certain portions of the business. This plan was presented to their bank and refinancing was organized. We also organized a contingency loan that we set aside in a separate account as insurance and then we invested the funds in a short-term account. These funds were used in a few emergency situations, but then replaced the following week.

What we learned: It is always better to arrange financing when you dont need it!

What else we learned: One of the most serious reasons for the cash flow problems related to shop operations. Many times material was short and whole shipments were delayed because a small, inexpensive but critical part was missing. This led to selecting and implementing an integrating manufacturing system. In this process the client reworked all the bills of material so they would lend themselves to better shop control in the future. Once the manufacturing system was operational, the parts shortages stopped and shipments flowed much better.

Another learning opportunity: We helped the client compare his operating ratios to those of similar companies. We found that the cycle time between shop start and shipment was significantly longer the best-of-breed companies. This has led to an ongoing program to reduce the shop dwell time by 50%, and order-to-shipment time by 50%.

The result: "We were cash flow restricted in our business before our involvement with Mr. Smalley. He worked with us to develop a financial strategy, and then began work on a process improvement program that helped us control the process flow much better. We would highly recommend his services."

How two partners solved their communications problems
The two partners in a successful insurance underwriting business were constantly going their separate directions with the business and arguing the merits of their decisions with each other. Business growth had stalled somewhat and there was disagreement on the future direction they should take.

What we did: We agreed to embark on a formal strategic planning process over a period of 3 months. During this process we focused on analyzing each portion of the business, from competition to operations, using a structured planning process. This led to a number of key priorities for the business. It was from these priorities that the partners developed together, that a unified sense of direction was formed. There was less conflict and the communications problems disappeared.

Lessons learned: Many times the key to solving partner problems is more related to understanding the underlying issues in the business than it has to do with communications. No amount of communications improvement and coaching would have resolved the partner's issues in this case.

The result: Ray was very instrumental in helping our partners develop a unified and organized set of priorities for the business. Prior to this, the partners were going in their own directions. We find that we are much better able to communicate and we have moved the business ahead significantly. We would recommend this process for any business.e

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 make your business work better.

Please give VenPlan Inc a call.

Next learn more about our principal consultant, Ray Smalley.

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.e

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.