- NSW based construction business was stagnant in a rapidly growing industry
- The business made an average profit of $2 million annually for the last 3 years
- However, their competitors kept growing while they kept drifting along without clear plans
- Key individuals couldn’t agree on what their unique selling proposition was
- Clear Path Commercial Consulting delivered a realistic and achievable 5-year strategic plan coupled with a performance management scorecard within 7 weeks for $18,000
- Goals included growing at least 7% in revenue yearly while maintaining current costs
- In their first year of the 5-year plan, the company smashed their target as profit grew 11.5%
Flatlining In A Booming Industry
“Direction is more important than speed. Many are going nowhere fast.” - Anonymous
One of the tell-tale signs that a business will run into problems in the future is when their goals are uninformed and set without a realistic plan. For one project management business working in NSW’s construction industry, the owners found themselves with a problem many SMEs don’t even realise they have.
On the surface, everything looked good on paper. They had been making an average of $2 million profit annually for the last 3 years. They had a regular client base, focusing on construction and restoration projects on commercial properties.
However, upon closer inspection, it was obvious that the business had been plateauing for years in a construction industry that was growing rapidly. While they were going through the same humdrum yearly, their competitors were winning larger contracts, growing their market shares and bottom lines.
Based on a word-of-mouth recommendation, the owners approached our team at Clear Path Commercial Consulting. The project took 7 weeks, and came slightly under budget at $18,000 from an estimated budget of $20,000.
Key Issues & Solutions
Issue #1: Unclear about what sets them apart
After our early meetings, it was clear that none of the key people in the business could agree on one unique selling proposition (USP). Although it sounds trivial, failing to have a strong identity can make you lag other competitors in the long run. Having a USP that everyone believes in and executes upon can mean the difference between the company growing or failing.
Solution: Redefining the USP
- After many rounds of discussions and workshops, we got all the key individuals to agree on a USP. As a small player among big construction outfits, they felt that their best differentiator was delivering exceptional services to their clients, beyond what was being offered by other firms.
- We devised a new strategy based on this USP. One of the targets we set was for the business to achieve an average score of 8/10 in customer satisfaction.
- The owners got everyone’s buy-in on this new client-centric strategy, resulting in a culture change.
- The business could now easily target specific customer segments in the market as opposed to trying to chase down every prospect.
Issue #2: They didn’t have concrete plans for their goals
The owners wanted to grow their revenue by at least 5% yearly, but the map to get there was missing. As a result, the business was just humming along doing unremarkable things year after year.
Unfortunately, a lot of people we talk to often face this same issue, especially after years of running a business. It’s easy to lose direction and get stuck in the day-to-day operations.
Solution: Establish a realistic and achievable 5-year plan
- We helped them understand their business from top to bottom covering their business model, USP, revenue streams, threats and opportunities.
- We then assessed their finances to ensure that the 5-year strategic plan was achievable, especially given the company’s complex timing of revenue and cost streams.
- From our calculations, we established that they could increase their revenue by at least 7% yearly while maintaining the current cost.
- The 5-year strategic plan had clear business goals with detailed plans on what needed to be done. We established performance management scorecards, encompassing financial and non-financial measures, to monitor their progress towards their long-term goals.
- We built a reporting framework so everyone understood their role and is held accountable.
Currently in their first year of the 5-year transformation plan, the business has already grown significantly after plateauing for years. With the new focus on delivering exceptional service, they have managed to attract new clients outside of their regular clientele. To top it off, their bottom line grew 11.5% in the first year, far exceeding their target.