True Story: Blindsided New Owner Transforms Unprofitable Business in 12 Months

What happens when you buy a business and get blindsided with hidden problems?

Read how the owner and our team identified, solved and overcome hidden problems and secured 27% net profit within 12 months.

Our client acquired a business with general business financials in hand, a seemingly solid client base, and a revenue stream that supported the purchase price of 2x. Upon “arrival” into the business, something seemed off and the team wasn’t leaning into the transition with eagerness. Part of our assessment included a documented summary of clients, revenue, and services. This uncovered glaring problems:

Problem 1: Revenue missing

The books weren’t reconciled properly and the revenue didn’t match the expected revenue.

Solution: Profit & Loss Projection

We encouraged the hire of a qualified bookkeeper to clean up the books while we compared received revenue to expected. This effort uncovered past due fees of $150,000! We sprang into action to implement a fee collection process, hire a billing outsourcer for future fee billing and reporting, and increased client communication to retain the clients while implementing tighter billing protocols. This effort paid off with $140,000 collected, not-fit/unprofitable clients leaving, and improved financial reporting and billing in place.

Problem 2: Work falling through the cracks

Everyone said they were too busy to take on more work, and reporting and marketing wasn’t being completed. The owner was inundated with client meeting requests and no help with the client meeting prep work. And the pipeline was dead due to the lack of marketing.

Solution: Clarifying Responsibilities and Standards

We taught everyone the power of documenting and benefit of receiving credit for doing the work. Next, we collaborated on documenting responsibilities, which taught team members what their peers were doing and where duplicate efforts could be eliminated. We tied all this together with a weekly staff meeting to celebrate progress, revisit business goals to give purpose to the work, collaborate on solutions to work bottlenecks, and hold everyone accountable.

Problem 3: Inappropriate Communications

By improving financial and task reporting, we discovered that a staff member had trained clients to call their personal cell phone and wasn’t completing crucial tasks.

Solution: Marketing and HR 

We overcame this obstacle by increasing the owner’s outbound communications with clients, instituting an HR log of infractions, repeatedly communicating the company’s main phone number to call, and onboarding a skilled contractor to take over responsibilities from the properly offboarded, problematic staff member. This group of solutions was all done while retaining and improving client relationships and recouping $60,000, which was set aside to hire full time help and provide bonuses to current team members.

Outcome: Profitability and Culture

With $200,000 recouped, the owner moved forward with our recommendations to contract:

  1. A remote receptionist to free onsite staff from calls and have time to learn new systems and skills
  2. A company to perform fee calculation and collection work
  3. An experienced client manager to prep for client meetings, manage clients, and free the owner to develop new business
  4. A website firm to revitalize the company’s brand

These efforts improved the bottom line and galvanized the owner to take further positive actions to grow the team and client base. All in, this business achieved 27% profitability and is thriving with a better team, purpose, and pipeline of clients.

Ready for your own success story? 

We heal business wounds and guide companies through successful improvements of People, Productivity, Profitability, and Growth using our C-Suite techniques:

  • Growth, Profit, and Loss Projection
  • Organizational Function Design
  • Process Improvements (IDEOS™)
  • Client and Staff Experience (CX meets OX)
  • Technology Integration Mapping
  • Collaborative Business Improvement Planning


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