Increasing profitability is at the heart of what we help our business clients achieve.

Starting with an understanding of the business strategy, our approach to profit improvement  involves looking at the whole picture (rather than only focusing on cost reduction), developing a detailed set of actions that will drive bottom line improvement and then most importantly, working alongside your management team to implement these.

A good example of how this works in practice is the work we undertook for a niche textile business that had serious cash flow issues.

The challenge

Being a niche textile business brings its own pros and cons. On the positive side you have unique product, so you stand out from competitors but on the downside, being niche can mean market conditions can quickly impact your sales.

When the company to us for assistance, they had four key issues impacting their business.

  • The business was loss-making and cash-constrained
  • They were unable to extend supplier credit
  • The bank was unwilling to extend facilities
  • And the owner-directors were unable to take salary and at risk of personal insolvency

Our approach – getting to the root of issue

When presented with a serious cash flow issue our first step is to determine the short-term immediate actions needed to allow time to analyse the problem fully and get to the root cause of the issue to ensure the situation doesn’t arise again in the future.

With this in mind our consulting team’s first step was to negotiate with the bank to provide more time to implement a plan. Once this was secured, the real analysis work could take, our team:

  • Took a deep-dive of company operations and performance
  • A profit recovery and cash generation plan was developed and implemented which included:
    • A product costing review to identify and resolve loss-making products and customers
    • Demand generation to focus on direct sales vs distributors
    • Shop floor productivity & working capital improvements

Our impact – delivering results

As a result of the analysis work conducted by the team the company is now in profit but more importantly, the analysis provided real insight into the business to give a valuable basis for future planning.

The key results from this project were:

  • This business has profits of >£180K in year one and on track to generate >£350K in year two
  • All suppliers now paid on terms
  • Bank facilities now operating comfortably within limits
  • Owner-directors now being paid appropriately

Challenge us

Our Consulting team are driven by helping businesses and seeing them succeed. No problem is too big or too small. We’re so confident we can deliver value that we are happy to link our fee to the level of improvement we help achieve. To find out more, get in touch with Alistair Black at Alistair.Black@jcca.co.uk.



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