Case Study: How to Increase Revenue Growth Before Acquisition

July 1, 2018 | by admin

A Silicon Valley technical staffing company with less than $12 million in revenue had a primary goal of being acquired within three to five years. Revenue growth in terms of new customers was non-existent; revenue was sustained by several large publicly traded customers for more than eight years. Unfortunately, the business was not scalable

Challenges Facing Securieon’s Business Consulting Experts

Consulting for family run companies with less than a million in revenue is a challenge mainly due to pride of ownership. In this case, best practices specific to business policies, procedures and lack of professional, non-family member management were lacking. In addition, overall operations were run with no employee training. Although 401K programs were offered, employee investment was minimal. As a result, a transient organization existed.

The Securieon Group’s Assessment

Our business consulting experts noted the client had all of the classic symptoms of a founder who had done well in acquiring revenue during a growing economy, where demand for employees clearly outweighed supply; however the founder failed to execute in an industry undergoing consolidation and moving toward outsourcing to the India and China markets. Specific factors included:

• The company was a lifestyle company: it sustained enough revenue to live a comfortable lifestyle for the owners
• The company financials were intermixed with personal financials, which provided a distorted set of accounting books
• There was an unrealistic valuation of company’s assets and people
• The culture was less-than customer centric

Our Business Consulting Experts’ Plan of Action

Securieon’s business consulting experts provided a two-phase approach to assessing the current state of affairs of the company:

Phase I:

• Identified original objectives and reviewed the business model to business plan
• Analyzed company financials
• Provided a quickassessment of staffing market trends and the competitive landscape
• Assessed management and employee roles and expectations
• Understood customer experience and comments about what changes were required of the company

Phase II:

• Confirmed the founder was committed to making the changes required and set realistic objectives
• Developed a revised approach to target market
• Expanded the business’ consulting practice to provide additional revenue to supplement the staffing model
• Implemented process, procedures and quality program to increase perceived value to prospects and customers
• Established alliance programs to expand market reach
• Opened communication between departments to ensure a team approach to accomplishing company objectives

Revenue Growth & Acquisition Results

The company’s revenue growth increased four timesEarnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) since Securieon’s engagement, and the business received several offers for acquisition within three years of Securieon’s business consulting experts’ involvement.

Want to find out how our business consulting experts can help your company? Contact us today!