A sole trader approached Business Doctors Maidstone. Their business was under pressure. During the 2010 recession they had reduced staff until only the founder remained. One particular client had had a unexpected reorganisation and 25% or revenue disappeared overnight.
Business Doctor, Peter Searle was engaged and carried out a strategic review over four months, in sessions lasting two hours.
At the end of the sessions it had been ascertained that the sector had altered significantly during the recession, with a large proportion of the service being conducted via the internet and not on the phone and by personal relationships.
Technology changes had caused a shift which had not been picked up and a significant investment would be required to catch up with the new entrants using the internet. Despite many workers in the sector having a bad reputation, elements of the sector still functioned in the traditional way and recognising this, the people who acted with traditional values would become the focus of the business and generate profit. However, because the business relied on personal relationships it had no value when the founder planned to retire in 5 or 6 years’ time.
During the review, it emerged that the founder had a side-line business which had a lot of attractions for building a valuable business to sell. Customers had issues which caused them to seek the service, the sector is not an attractive one for new entrants, public sector funding cuts meant that the private sector has an opportunity to fill the void and there was the opportunity for reoccurring revenue.
With the help of Business Doctor Peter Searle, the “business to sell” was shaped and in the first year increased revenue by 30%. At a monthly meeting, issues arising from the growth are addressed and plans put in place ready for the next growth step.
During the second year more contracts were secured and existing contracts retained. The reoccuring revenue began to give stability and a VPA was engaged to formalise processes.