Meet our clients…
One particular client is in the florist industry and focuses on a niche market to retail outlets on the Sunshine Coast and Brisbane. The business started as a venture between two partners, with our client buying out the other partner within a couple years of establishing the business together.
With now only the one principal in the business, our client’s initial focus was on ensuring the survival of the business. This left little time to review their existing business practices, many of which were totally inefficient.
As a result of hard work and a strong reputation in the industry, business sales remained steady. However, considering the amount of time and effort invested just to maintain this, our client felt that the cash flow and returns should be a lot more significant.
Initiative identified inefficiencies within the business and worked closely with our client to alter these with the result that cash flow is now easily managed and with higher returns.
This is how we did it:
- Benchmarked our client’s business against similar businesses
- Reviewed overheads
- Analysed sources of revenue
- Tracked the profitability of individual service lines
- Monitored debtor payments and terms of trading
Our analysis revealed that one service line of the business was actually losing money and was therefore having a significant effect on cash flow. This service line was labour intensive and resulted in other increased overheads. We discussed the following options with our client:
- Improving efficiencies with the service
- Outsourcing the service
- Selling this particular service line
Our recommendation was to sell this service line. Our client had not contemplated that this segment of her business would be a saleable asset, however within weeks she had a buyer. It has taken just six months to increase the cash flow and net profit of the business. Buoyed and excited by these results, our client is now working with us to further streamline the business.
Cash flow management is essentially the difference between all the money that is spent by a business (outflows or uses of funds) and all of the money that flows into the business (inflows or sources). Simply put, it doesn’t matter how much money is due to come into the business in the future if your business doesn’t have enough money to get there.
Initiative is constantly ensuring that our clients maximise their cash flow.
Based on the Sunshine Coast, Initiative Group are all about making the complicated simple for our clients.