Edmund's client was the CEO's of a £30K turnover farming business who wanted to grow his turnover to £5M. The CEO had obtained the first round of funding to diversify the business into food processing. His challenge was that he was not meeting his business plan targets as the costs had not been worked through properly. He could not achieve his targets with the available funding.
Objective
To develop and implement a revised business plan, that was achievable with the finance and revised costings available, to then grow the business to over £5M turnover.
Action
- Analyse capital expenditure to equip the factory
- Produced accurate product costings
- Review selling prices, and changed product and or specification when required, increased the focus on added value product.
- Staff trained to meet production quotas and added value production requirements
- Coached the factory manager to handle the more flexible production requirements
Results
Capital expenditure was reduced by buying second hand equipment. Accurate product costings enabled selling prices to be revised to meet the required gross margin. Production of unprofitable lines ceased. Overheads were revised to achieve acceptable returns so that the business could more closely achieve financial objectives set out in the original business plan.
So What
The business was saved from possible closure and with the recruitment of a sales director grew to a profitable turnover of £8M.
Edmund Hill is a member of the Executive and Business Coaching Network (EBCN). His website is CE Hill and Co.