- Loss-making home renovation company was contemplating closing the business
- Sales were down after a downturn, cash flow was erratic, employees lacked direction, and felt products and services were too expensive
- Top-to-bottom transformation was done covering coaching, product and service strategy, team development, sales and marketing
- Turned around a tidy profit in less than a year after a sizable loss the previous year
- The business is now on track to triple their profit within a year
- The next step is for the owners to be less hands-on while still growing their bottom line
Contemplating Closing Shop
After being in business for decades, the last thing you want is to be forced to close shop after all the hard work you’ve put in. For one company, the founders found themselves at a crossroad nobody wants to be: fold over or bleed slowly to death.
But after 15 years of blood, sweat and tears – and growing to 20 employees not to mention the reliance of many subcontractors – closing shop was easier said than done.
As home renovation specialists, they had been losing money for some time. They had endured a two-year downturn and were in bad shape financially, with a considerable loss in the previous year. Clearly, cash flow was a big issue and the situation was unsustainable.
The writing was big and clear on the wall – in red ink.
What were the key issues and solutions?
Issue #1: The sales team didn’t believe the offerings were value for money
Regardless of how fantastic a product is, the mindset of the salesperson can determine whether a purchase happens or not. Let’s face it, if the person selling to you wouldn’t buy it, they will have a tough time selling it to you.
After talking to the sales team, we discovered that they were very uneasy about the price tag of their offerings even though they understood the pricing was correct based on the quality. Their sales language did not help convince prospects either.
- It was crucial for us to educate the sales team to understand the value and benefits of what they were selling
- As their knowledge grew, their mindset shifted and they started to believe fully in the suite of products and services, which made closing sales easier.
- Individuals and teams received sales training to polish their skills.
Issue #2: The team wasn’t efficient and productive
We quickly realised there was one employee who was underperforming, and bringing the whole team morale down. The staff weren’t particularly happy or productive.
Another problem was the nature of the business: not everyone is in the same place at the same time. This is natural as tradies are usually on site and the designers may be out of office visiting the site, while the sales, admin team, and everyone else worked full time in the office.
On top of that, several of the processes or software were either outdated or inefficient. The employees’ time was spent working on tasks that could be streamlined, eliminated or automated.
- We sought feedback from every employee, asking what they would do differently if it was their business and what were the company’s strength and weaknesses.
- We recommended the removal of the underperforming person. Eventually, the person left and morale went up soon after. The team was happier and more productive.
- After several employees left, we started everyone on a clean slate so they understood the new goals, policies and procedures.
- Outdated software and processes were replaced with ones that increased productivity and efficiency.
Issue #3: Sales and marketing were half baked
They had a minimal marketing budget, which was a big challenge for us. Furthermore, their marketing campaigns were mainly used for branding purposes, and were sorely missing a proper funnel for leads.
- We designed and implemented new campaigns, which educated their target market on the value and uniqueness of their suite of offerings. This included an information pack to convince and convert their prospects to buyers.
- We made certain processes transparent to the prospects, so they could understand the value of what they would be paying for.
- The sales process was redesigned, assigning their design consultants as high-level experts to help guide prospects before a sale.
Issue #4: The pricing structure needed to be more attractive
We looked at their pricing structure and saw several avenues for improvement, to make it more appealing to prospective buyers.
- We offered and discussed several alternatives with the founders.
- Although the profit margin for several jobs were slightly reduced, overall sales increased and the average transactional amount per job shot up.
What is the result?
LESS THAN A YEAR LATER:
• Recorded a handsome profit after a significant loss the year before.
• The team is more productive, committed and happier at work.
• The founders could finally take an overdue overseas holiday after years of slogging it out.
• Expected to continue their profit increase in the next 12 months
• The owners are working with us to slowly let go of the reins while still growing their bottom line
• Programmed holidays for the owners is moving up the priority list for this year and top priority into the future