For the past few months I have been working with a wholesale company helping them understand some of the issues impacting their business and coming up with ways of making things better.
My role is one of Virtual CFO, a part time resource brought in to help the management team analyse their past performance and identify areas of the business that can be improved upon, not just for growth but also to improve the bottom line.
The business itself was medium sized by NZ standards but not really making any money, at least not what it should be if compared to other wholesalers. While the management team was experienced, they were very much sales focused at the expense of margins, costs and efficiencies. This left the business growing without really seeing the benefits of their collective efforts.
An Independent Perspective
By bringing a different perspective to the way to review the business, including industry benchmarks to compare them to, allowed me to provide a level of independence that helped the team better understand the areas of weakness. To their credit they then switched their attention to correcting or rectifying the problem areas which quickly spawned the fruits of their labour. The impact on their monthly bottom line performance was significant and consistent, to the point where the profitability of the business was heading for a 6 figure improvement.
Some of the changes were to do with improving gross margins. Others were on squeezing out unnecessary costs while some money had to be spent on improving processes and systems but with quick payback. This case study highlights the impact I can have on businesses who are sometimes too busy to see the wood for the trees and yet are dealing with changes all across the business.
In this case we’re now meeting quarterly to ensure we as a team see the business and its performance for what it is. We are collectively improving the governance and analysis of the business so that future growth is good growth. Planning has become an important ingredient into how they focus their attention and resources going forward. It’s a good business that will only get better.
If your business sounds like it too could use a bit of outside help and perspective, why not consider the Virtual CFO option. It’s a cost effective service built around the needs of your business. If you want to understand more about how it could work for you, give me a call – happy to chat [0800 236662].