As business owners, we’re often faced with the challenge of maintaining profitability and efficiency in the face of ever-changing market conditions and evolving customer demands, and working in business advisory we see these challenges every day. For one SCS Capital Partners client, a service-based business with under $10 million in revenue, this challenge had become particularly acute. Despite being led by a team of dedicated professionals who took pride in their work, the company was struggling to turn a consistent profit and found itself weighed down by unprofitable service lines and an inefficient operational structure.
That’s when the team at SCS Capital Partners was brought in to provide strategic guidance and support in a business advisory role. Through a comprehensive assessment of the business, our experts uncovered a range of opportunities to streamline operations, enhance profitability, and ultimately empower the owners to work less while earning more.
The Results of our Business Advisory: A Dramatic Turnaround
The transformative impact of our engagement with this client was nothing short of remarkable and this was a reluctant client since they never contracted out business advisory services. Within the first year, we were able to deliver the following results:
Reduced gross income by 50%, shocking the owners but paving the way for greater profitability
Cut cost of goods sold (COGS) by 62%
Doubled the company’s gross profit percentage
Decreased operating costs by 25%
Increased profit by 180%
Increased owner compensation by 52% while cutting their work week from 7 days to 4 days
How Our Business Advisory Achieved These Outcomes
The key to our business advisory success is built on our strategic, methodical approach to optimizing the client’s operations. Here’s a closer look at the steps we took:
Identified and Eliminated Unprofitable Business: The first order of business was to take a hard look at the company’s service offerings and ruthlessly eliminate those that were not contributing positively to the bottom line. By cutting these losing propositions, we were able to free up resources and focus the organization’s efforts on more lucrative, value-added services.
Right-Sized the Staffing Model: One of the primary drivers of the company’s financial challenges was an oversized workforce that was being compensated at rates higher than the value they were bringing to the business. We streamlined the team, retaining only the most essential personnel and aligning their compensation with their true contribution.
Optimized Operations and Infrastructure: With a smaller, more focused team in place, we were able to significantly reduce the company’s technology, office, and other operating costs. This freed up additional capital that could be reinvested into more strategic, high-impact initiatives.
Laid the Foundation for Continued Growth: Looking ahead, our team is working with the client to further enhance their marketing and lead generation capabilities, enabling them to drive more organic business growth. We’re also exploring opportunities to relocate the company to a smaller, more efficient facility that better suits their right-sized operations.
The Lasting Impact of Our Business Advisory
For this SCS Capital Partners business advisory client, the results of our collaborative efforts have been truly transformative. Not only have the owners been able to step back from the day-to-day grind and enjoy a healthier work-life balance, but they’ve also unlocked new avenues for growth and long-term profitability.
This success story serves as a powerful testament to the impact that can be achieved when business owners are willing to make bold, strategic decisions and leverage the expertise of trusted advisors. By embracing a data-driven, results-oriented approach, we were able to turn a good business into a great one – and we’re excited to see what the future holds for this thriving enterprise. If you are interested in this type of success contact us to see what we can do for you.