Case Study 1 - Creating a successful exit strategy

Why we were called in:

This company specialised in the design and installation of high quality technology solutions for the TV Media sector including high profile clients such as Sky and ITV.

It was, essentially, a successful business, with good profitability, an annual turnover of £4m and a prestigious client base. It did, however, operate within some potentially crippling constraints.  The company structure was not well suited to maintaining profitability through peaks and troughs. More importantly, though, the owners were completely ensnared in the business. This meant that the corporate value of the company was significantly diminished.

What we did:

Following a detailed review and in consultation with the management, a strategic development programme was designed and implemented, with three key goals;
 

• Improve sustainable profitability
• Enable the owners to reduce their intense day to day involvement within the details of the business.
• Increase the corporate value of the company.

Following the implementation of the programme the company was re-established as a business built on new foundations. A new organisational structure freed the business from its past constraints, enabling it to grow further without losing the credentials that had contributed to its previous successes.

How the owners benefited:
 
During the period some dramatic changes took place;

• The company more than doubled in size growing from £4m to £8.5m+
• The customer base was expanded significantly – spreading risk, smoothing dangerous sales peaks and troughs and strengthening the company’s ability to negotiate with clients
• Profitability was more than doubled – not least because organisational processes were re-structured in order to handle the increased work flows releasing cost savings and improved efficiencies
• An effective and impressive management team was built from in-house personnel through a tailored management development program
• The business owners were able to step back from the business to further develop the company’s strategic direction and also importantly, to take time out to actually enjoy the fruits of their labours

As a direct consequence of these changes the risks were reduced and the corporate value of the business was significantly enhanced.

The business is still in the hands of its owners and is going from strength to strength. When the owners do decide to sell, the value will have been increased by 300% or more from the levels prevailing before they called in Business Astute. And then the owner can finally exit the business and indulge his passion for scuba diving.

Case Study 2 - Breaking through the barriers to growth

Why we were called in:

This business was a Facilities Management company based near London, supplying services to numerous organisations, many of them Blue Chip.

The business was well established and had enjoyed a long history of success, however at the point at which the company asked Business Astute to become involved there were some increasing barriers;

• Turnover had plateaued
• Profit Margins were coming under increasing pressure
• The Management team were continually being pulled down into the day to day running of the business

The business owners knew what their primary challenges were:

• to drive up turnover
• to stabilise and grow margins
• to free up the management team to enable them to focus on strategic development issues not tactical problems.

They just didn’t know how to achieve their aims.

What we did:

A thorough strategic review was initiated which resulted in the creation of an exciting and ambitious plan to revive the company.

The following 3 key actions were implemented:

• A new sales and marketing initiative was launched
• An acquisition strategy was executed. Two complimentary businesses were successfully acquired and integrated – one of which was previously a competitor
• A tailored and focussed management development program was delivered

How the owners benefited:

The results, following the implementation of this carefully planned and executed development strategy, were dramatic.

• The customer base was significantly increased by over 300%
• Turnover was increased from £1.2m to £4m
• Margins and overall profitability went up by a factor of 3
• The Management Team were able to concentrate on strategic goal setting and not “day to day fire fighting” as in the past

As a direct consequence of following the programme set in place by Business Astute, the business was able to move beyond potentially dangerous barriers. The change was dramatic.  From a company that had seemingly reached its limits, it transformed itself into a dynamic and driven organisation, with a clear path for further growth. Delivering a strong performance in all key areas significantly boosted its overall corporate value making it an attractive proposition to potential buyers.

It’s no surprise therefore that the business owner and the Management Team decided to cash in on their success and the business was acquired by a larger organisation - to the considerable benefit of all involved.

Case Study 3 - Tapping the source of increased profits in a new acquisition

Why we were called in:

This company supplied products and services to the UK and international petrochemical industry and had just been acquired by an investment group. The investors had bought the business for a good price because much of the experience would depart the business with the exiting owner. The new owners were equally aware of the risks that came with the ‘bargain’ as the business would lose valuable management.

The previous owner had been a well-known and highly respected figure in the industry and had been fundamental in the day-to-day running of his business. Following the acquisition concern spread both internally and externally that without him at the helm, the business would fall into decline. This fear was reinforced by the fact that an old adversary, a larger competitor, was taking advantage of the situation through a sustained attack based on aggressive pricing. Morale within the company was dropping rapidly.

What we did:

In close collaboration with the remaining management team, Business Astute developed a strategic plan, which was agreed and rolled out across the company. No area of the business was left untouched by the new strategy.

Through their department heads all individuals in the business were;

• Made fully aware of the company’s new strategy and goals
• Coached to understand the key objectives and, most importantly, how they in their everyday roles could influence and deliver against those objectives
• Kept regularly updated of the company’s progress towards it’s goals

A key part of the strategic plan involved overhauling and re-energising the international sales activity. In a dramatic restructuring exercise the existing number of 40+ international sales agents was halved to just 20. These remaining agents were subjected to an intensive tailored training programme and a properly managed sales support structure was created. As a result, the remaining 20 agents surpassed the sales and profitability figures of the original 40!

The effectiveness of the sales effort was further enhanced by increasing the number of languages spoken by internal sales personnel from two to nine.

Profitability more than doubled in just 18 months!

How the new owners benefited:

An equally satisfying outcome was the fact that the company’s old adversary - who had previously been putting them under pressure - increasingly found themselves outsold and outperformed by the rejuvenated sales agents.

Following the departure of the original experienced business owner, people expected the company to flounder without his strong leadership. The irony is that there was already a pool of untapped management within the company with the capability to outdo previous performance. The key role of the programme was to unlock the in-house management resources by providing structures for a new team to take advantage of their existing industrial knowledge, and to apply their skills and abilities to meet the challenges. The new management team, backed by sound corporate values and armed with clear objectives, consistently delivered against targets and dramatically enhanced the company’s fortunes and their own security.

The increased profitability and reduced risk greatly increased security to staff and significantly enhanced the value of the original investment to the new owners.