Gaining Financial Health to Make a Profit
Case Study
Challenge
The challenge here was that the Shareholder was amazing at providing the care and leading her teams to produce some pretty amazing patient outcomes and high revenue year over year however, lacked the knowledge and understanding of the financial health of the business and struggled to make a profit.
Our plan:
- Improve profitability:
Reviewed & explained the books for the past 3 years to determine areas of cash bleeds. Re-map the books to make it fully functional to make better business decisions.
- Determine the return on investments made:
Created a list of all areas the business was spending money and began to track the return the business was getting from those expenditures.
- Identified critical areas that needed to be discontinued:
The diagnostic determined the hidden stressors that affected profitability and where sucking cash out of the business.
Solution
The solution JR3 Consulting came up with was simply to train the Shareholder on how to manage business decisions based on the numbers of the business. We explained the importance of clean books and how managing your business financials closely leads to profitability.
Results
This Shareholder is now more empowered and manages a far more efficient business;
The effort vastly improved the company’s profitability, created room for the Shareholder to pay herself a healthy salary and comfortably take distributions.
By the numbers, the effort:
- Increased profitability by 20%
Get Your Value Builder Score
Whether you want to sell your business now or decades into the future, getting your Value Builder Score will allow you to:
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1
Diagnose
Diagnose what may be holding you back from creating a company that can fully thrive without you.
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2
Evaluate
See how an acquirer would evaluate your business, enabling you to focus today on what will be important down the road.
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3
Identify
Identify hidden things that may quietly drag down the value of your business so you can eliminate them before they become a problem.
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4
Pinpoint
Pinpoint the part of your business that will have the most value to an acquirer so you can invest more resources in areas likely to be most attractive to an investor or acquirer.