Sometimes restoring the health of a business isn’t about increasing profitability. There are plenty of instances where the revenue is there, but the way that revenue is being generated isn’t sustainable. Of course, profitability typically improves when these other positive changes are made, but it isn’t always where you should focus first.
That was exactly the case with the subject of this true story. While this company had a great regional reputation and profits of $1.4 million, it was struggling with an unmanageable list of solicitors, low closing rates on a growing list of leads, several unprofitable client segments, an unachievable promise of 24-hour completion, and very labor-intensive management of less skilled staff.
Jump nine months ahead and turnover was eliminated, skills have increased, sales jumped 21%, and the team is easier to manage and more productive. Plus, the leaders are mapping plans for expansion while enjoying a healthier integration of work and personal time.
Here’s what we did to get there in less than one year’s time.
Solution #1: Segmented Client Base and Increased Prices
When we looked at the Profit & Loss statement and costed the client experience per segment, we found too many no-profit clients. So, our first order of business was to eliminate these unprofitable segments of the client base and free up capacity by reducing the volume of no-profit clients coming in the door.
We accomplished this with two key changes. First, we modified the unachievable promise to perform service within 24 hours to 48-72 hours of the request. Second, we raised prices by 50%, to market rates, which eliminated 75% of unwanted and unmanageable solicitors. This kept no-profit jobs from coming in the door and allowed staff to focus on high-ticket clients with a larger profit margin.
Solution #2: Visualized Roles and Posted the Right Jobs with the Right Requirements
Next, we filled skill gaps and recalibrate several staff into positions that matched their skills, passion, and preferred pay. To do this, the business needed to move from verbal performance reviews and promises to written job descriptions, more communication and accountability, and a formal posting system.
We accomplished this with two key changes. First, we shifted 18 staff by creating a visual board of roles, hierarchy, potential moves, and gaps to fill. We then implemented BambooHR, Monday.com, and our collaborative Life Career Mission Statement project to clarify responsibilities and gaps to fill. This effort attracted an experienced Business Manager and six new hires for less than the cost of the offboarded personnel.
Solution #3: Mapped the Impact of Growth on Staffing and Profits and Used Metrics to Make Better Decisions
It is wonderful to dream of higher revenues and more clients. It is our job to help the dream become a reality. We mapped out growth for the next five years. Next, we estimated the cost of new hires and middle managers, and this led to a healthy discussion about the power of metrics.
This realization led to hiring a qualified bookkeeping firm, reducing the fee collection process to days vs. months, reviewing marketing metrics to identify sales process improvements, and creating a better new hire training plan.
Solution #4: Documented Processes to Eliminate Inefficiencies
We know that a team that works together can accomplish almost anything. Finally, we documented processes to uncover work-reducing ideas, improve the client journey, and enhance team communication by lowering disruptions.
The team documentation of the client journey revealed so many time-saving ideas that business team capacity increased 50%. This discovery afforded time to learn new skills in communication, collaboration, delegation, mentoring, and accountability. Most of all, it empowered the different departments to be open to change and seek, implement, and celebrate new wins to improving their workload and business.
At first, offering “incentives” to get clients in the door can sound great . . . and work! However, if that trickle of business turns into a deluge, and communication and growth stagnates, it puts strain on the owners, staff, and sustainability of the current business model.
The wonderful part of this story is that this business wanted to improve, thrive, and share success with all their team members. All we did was teach and lead them through the proper sequence of improvements and skill training. This brought the business to a healthier level of sustainability.
Will You Be Next?
We love helping businesses restore health and transform by working on the most important parts of the business, including:
- Growth and Impact Projections
- Organizational Design
- Lean® Process Design
- Client Experience Documentation
- Life Career Mission and Goals
- Tech Integration Mapping
Whatever your challenges are, we can overcome them together and build you a business that lasts.