Helping a small business within the cleaning industry increase revenue and profitability
Engaged, for his expertise within the cleaning industry, in September of last year, Jon Corns helped this small business, which was struggling with profitability. In that month, they invoiced just £48k in revenue, which was their poorest performance of the year. Their monthly average being £85k per month, with a 50% margin. But even with these numbers, unfortunately their profit was still poor due to the disproportionate overhead costs and wage bill, resulting in an annual loss of £3.5k.
The Challenge
The company was facing a major challenge as they weren’t growing or making a proactive effort to diversify their sales or customer base. They had become overly reliant on just 4 or 5 key customers, which had left them vulnerable to any changes in these customers’ buying patterns. In addition, their brand positioning was also a problem as it failed to resonate with their target audience. It was clear that the company needed to reassess their strategy and make some fundamental changes if they were to turn their fortunes around.
The solution
To get the project moving, Jon refocussed attention toward some key business elements that were missing. This helped align thinking, provide clarity and cement in place some fundamental details to drive the business forward. These included:
The formulation of an effective sales strategy
Creation of a company strapline to reflect their identity and make it easier for their target market to understand.
Clearly defining their product offering
Identifying their unique selling proposition (USP) – small equipment for small spaces. This meant they were not trying to compete with big manufacturers offering larger products, emphasised the fact that the equipment was small enough to get into small spaces to give a more thorough clean.
Putting sales accountability in place by establishing a clear focus and direction for market segments and niche markets
Focusing on specific customer groups such as facilities management companies, healthcare, distributors, and resellers.
The Outcome
By the end of the year the company were achieving over £100K in revenue per month, which was a great achievement for the team and a good confidence boost. The 2023 budget has set an ambitious target of £323K for the 1st quarter but executing the new initiatives has seen the business deliver a Q1 order intake of £515k. This represents a 160% increase which is an impressive result. The company’s annual target is set at £1.5m, and they have already delivered a third of this target, indicating that they are well on their way to achieving their goals. As well as covering overheads, the company has been delivering profitable returns and maintaining a positive cash flow, which is a great sign for the company’s financial health.
With these achievements in mind, the company plans to increase shareholder returns rewarding the hard work and dedication of its team.
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