Sometimes restoring the health of a business isn’t about increasing profitability.
It’s about making the business sustainable.
That was exactly the case with the subject of this true story.
While this client’s business 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, unprofitable client segments, and a mismatch between staff time and responsibilities.
Jump nine months ahead and we eliminated turnover while increasing skills and improving sales by 21%!
Plus, the company now had a vision for long-term growth.
Here’s what we did to get there in less than one year’s time.
Problem #1: Too Many No-Profit Clients
Solution #1: A Segmented Client Base and Increased Prices
When we looked at the Profit & Loss statement, 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 match 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.
Problem #2: Skill Gaps and Mismatch Between Staff and Their Passions
Solution #2: Clear-Cut Roles and Improved Performance Reviews
The next step was to fill skill gaps and recalibrate several staff into positions that matched their skills, passion, and preferred pay. To achieve this, the client moved from verbal performance reviews and promises to written job descriptions, improved communication and accountability, and a formal posting system.
We shifted 18 staff by creating a visual board of roles, hierarchy, potential moves, and remaining gaps to fill. We implemented BambooHR, Monday.com, and our collaborative Life Career Mission Statement project to clarify responsibilities and areas of need. This effort attracted an experienced business manager and six new hires for less than the cost of offboarded personnel.
Problem #3: An Unclear Vision of the Path Ahead
Solution #3: Data-Driven Decisions
It is wonderful to dream of higher revenues and more clients.
It is our job to help the dream become a reality.
We charted growth for the next five years, estimated the cost of new hires and middle managers, and led a healthy discussion about the power of metrics.
This led to several action items. We hired a qualified bookkeeping firm, reduced the fee collection process to days vs. months, reviewed marketing metrics to identify sales process improvements, and created a better new hire training plan.
Problem #4: Unclear Communication and Bloated Processes
Solution #4: Documentation and Streamlined Workloads
We know that a team that works together can accomplish almost anything. Our final change in this nine-month transformation was to document processes to uncover work reducing ideas, improve the client journey, and enhance team communication by lowering disruptions.
The team documentation of the client journey uncovered so many time-saving ideas that business team capacity increased 50%!
This gave the team more time to learn new skills and empowered the different departments to be open to change while celebrating new wins in improving their workload and business.
From Troubled to Thriving
Offering “incentives” to get clients in the door can sound great…and it often works! But 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 existing business model.
Our client wanted to thrive, and with our guidance, the entire business reached a new level of sustainability.
Will You Be Next?
At My Virtual COO, we help service-based businesses overcome growth and business management hurdles through:
- Growth, Profitability, and Impact Projections
- Organizational Design
- Lean Process Design
- Client Experience Documentation
- Productive Collaboration and Change Acceleration
- C-Suite Training
Ready for your own success story? We would love to speak with you.