We had been asked to review the activities of a company supplying parts to the engineering industry. The company’s turnover of c£750k was not producing anything like the profits it should have done. Overheads were being controlled but margins seemed to be continually squeezed. When we drilled down it quickly became apparent that the issue surrounded one contract which was producing 60% of their turnover. The issue involved inaccurate costing of labour when the contract was won which resulted in them underquoting the unit price of their major product line and greatly impacting the margins of one third of the business with that customer.

As a result, the company reverted to the major customer and sought to renegotiate the contract for that product line. The customer threatened to source the product elsewhere and the company called their bluff. When the customer tried an alternative, there were issues with both quality and service and so the company quickly regained the business at a significantly improved margin and profits reverted to expected levels.

Background & Problem

Turnover: £650K – £750K

The Company is well established (some 25 years) and a privately owned family business.

It had, however, been loosing sales to overseas competition over a period of several years, and this had been eroding previous profits and draining the cash reserves.

The stakeholders were at the end of their tether; the management knew where it wanted to go but with the accumulated debt and lack of funding, did not know how to get there. There was also the consideration of personal guarantees having been given to bankers and the landlord.

Action Taken

It was immediately obvious that the Company was not going to trade its way out of the situation. After listening to advice and serious soul searching by the owners, it was agreed that the only future for the business would be the use of recent protective legislation which would relieve the debt burden of the past and, with careful planning, keep all the major suppliers, customers and the majority of the staff.

Measures were taken to reduce the effect of the personal guarantees, financing was arranged and the plan executed.

The Result

As soon as the agreed actions were put in motion, the management took up the challenge and the new vision. Sales were made profitably and, beyond the forecast, to the extent that all the staff was retained and some were working overtime. The initial cash requirement was well managed and the management were relived that there were no further sleepless nights

Background & Problem

Turnover: £600K – 800K

The company is a quality provider of kitchen equipment maintenance and repair services. It had been in CVA (creditors’ voluntary arrangement) for 18 months, but was stuck in the mire of what was a very onerous CVA, never really getting its head above water and struggling to maintain the CVA payments.

Action Taken

By using recent government legislation put in place to assist the restructuring of businesses with debt, FSBA were able to eliminate the debt to the business and free up the management team to focus on developing the business forward.

FSBA further assisted the company in putting greater focus on the debt collection side of the business. They were feeling the squeeze from their invoice finance provider and on reviewing the situation FSBA were able to establish that it was the company’s debt collection process which was creating the squeeze, rather than the invoice finance provider themselves. Within three weeks, the cash flow issue was resolved.

Finally, they were levied a security deposit by HMRC in relation to their VAT payments, of some £25k. By using one of the FSBA pecialists, we were able to successfully appeal the levy so that the company was not required to pay any levy.

 

The Result

Six months after the restructuring, the business is growing from strength to strength, with turnover increasing by 33% and the business breaking even in the first three months and moving into significant profits in the second quarter.

Products and issues: Company developed range of instrumentation products that automated the processing marking and tracking of haematology (and other ologies) samples/slides throughout the laboratory process. These were world beating products and they were sold to other suppliers as branded products and well as own brand.

Background: Family run company – second generation running the company. Profitable and growing fast overseas but static or declining in UK against a growth market background.

Problem: To boost UK sales the company employed three sales people. However they had no experience or background in managing a sales team. There were no targets and reporting was by way of a lengthy written report that was barely read and took the best part of 2 days per month to collate and write for each sales person. There was no CRM system and most of the contact details were originally in a manual system but were in the process of migrating to a contact management system. Over the previous 2 years sales were either static or in decline.

Solution: We were called in to help set up the sales team and manage their performance on an ongoing basis. Initially a simple sales audit was carried out to determine size of issues, analyse what efforts sales people were making, where they were going and were they being effective.

Having analysed the data we set up territories for each sales person and allocated customers to each sales person to manage exclusively. We then set targets and monitored and fed back the information on actual performance each month. A new self funding commission scheme was devised and implemented in lieu of a pay rise in the first year.

Monthly sales meetings were held which were a review of performance for the month, proposed activities for the following month were discussed and both product and sales training given.

Results: All sales staff earned more in the following year than they would have otherwise. (Increase was self funded by paying commission on over target sales)

Sales year on year grew by 21% and indicators were that this growth would have continued in the following year. There was also a commensurate growth in profits.
Family sold company to major multinational halfway through the next year.

Bob Francis
SGBA

Products and issues: The company is one of the UK’s leading financial protection insurers; they sell Income Protection, Critical Illness cover and Life Insurance. They employ around 1000 people in administration and sales offices around the country. In 2010 new sales were up by over 20%.

Background: Successful and well respected by customers and the industry. Growing the business in 2011 and onwards required even more focus in a challenging economic climate.

Problem: Employees struggling to cope with increasing demands and workloads. Everyone was very busy and working hard but it was identified by the internal Learning and Development (L and D) team that some teams and key personnel found it difficult to keep all the ‘plates spinning’ and, if appropriate, which ones could be dropped.

Solution: Following discussions with the L and D team and a number of business managers, we designed and delivered half day workshops focused on key principles – clarity of goals and applying on a daily basis, prioritising and planning. This was supported by individual follow-up sessions in the workplace to ensure the principles were applied effectively to their role. The follow-up session was also used to help them use Outlook (organisational tool used by the whole organisation) more effectively in their day-to-day work. This programme was delivered to key teams – Sales, Marketing and Customer Services – and open workshops for individuals from different parts of the organisation.

Results: Programme is ongoing, but results and feedback so far indicate a 15-20% increase in productivity. Additional benefits are teams working in a consistent manner, feeling more ‘in control’ and generally less pressurised employees.

This programme was developed for a corporate organisation but the principles and personal coaching are relevant for all sizes of organisation and employees.