How this business owner overcame her resistance to the debt and generated $350k in bottom line profit.View Success
How this business owner asked one simple question that resulted in $1M in new revenue.View Success
How this business owner’s decision to outsource saved $300K annually and increased gross profit by 6%.View Success
How this family-owned company discovered $500K in fraud and saved themselves $1.2M.View Success
How this entrepreneur recognized his real cost of doing business; instead of losing his shirt, he increased profits by $400K.View Success
How this entrepreneur changed her time management processes and grew her revenue by 30%.View Success
Challenge: Fifteen years ago, Darlisa founded a successful marketing company that caters to the IT industry. She works with many Fortune 100 companies and, when working on large projects, her company has cash flow shortfalls because she doesn’t get paid until the end of the project and because she typically has to hire additional FTEs to complete the project in a timely manner. In these cases, Darlisa borrowed from her investment account and transfered funds to her business. When she was paid, she would pay herself back. This is not only an accounting nightmare; but her investment advisor could not make long term investments – limiting her estate and retirement planning options – while paying for those services.
Story: Darlisa believed that managing her company without debt showed that she was a savvy business owner. She was funding her cash flow shortfalls herself – taking money out of her personal investment accounts and then repaying herself when she was paid. She knew this was not a good practice, but did not know how to get, or use, a bank line of credit. Additionally, she did not want the liability.
Working through the BOMBA Financial Statement module, Darlisa began to understand the value and use of a revolving line of credit -- governed by the debt service coverage and leverage ratios. Darlisa was convinced to try to secure a credit line.
Using the BOMBA Business Plan developed through the curriculum and some peer group role playing, Darlisa spoke with several banks and secured a $2 million Line of Credit with limited personal liability. She found a banker who she trusted, who understood her business and its needs, and who made a couple of cash management suggestions that immediately saved Darlisa money and time.
Success: Darlisa’s accountant was pleased because he doesn’t have to track funds in and out of the company in his reporting to the IRS (which reduced Darlisa’s accounting expenses by $5,000 annually); Darlisa’s investment advisor was pleased because she could now make better long-term decisions for her retirement account (which improved Darlisa’s investment returns).
Finally, Darlisa benefited in an unexpected way — she responded to an RFP for a company with whom she had not done business. When she was awarded the contract, she was told that she won because she had the largest LOC and therefore more capacity to carry the project. This contract resulted in more than a $350,000 bottom line net profit (and she had to use her line of credit).
Challenge: Jared owns an environmental recycling company which runs a fleet of trucks that pick up commercial, household and toxic waste. The company had successfully grown to $6MM in the first 7 years, but then stopped growing over the past 2 years. While his sales team seemed to be bringing in new customers, the company was losing some of its biggest, longer tenured, clients.
Story: Jared started to identify the issue in the second BOMBA module, Customers. Jared admitted that he left most of the customer contact up to his sales team. Although he had frequent conversations with his customers when he started the business, now he’s more involved in the logistical operations of maintaining his fleet and managing his employees.
In the BOMBA exercise that analyzed revenue trends, Jared recognized that he was bringing in new clients but losing some clients that had been with him since he started the company. He didn’t know why they left; he had never spoken with them. The BOMBA exercise gave him a script to help him ask good questions and the BOMBA peer group encouraged him to call; they held him accountable.
While Jared was uncertain, he had nothing to lose so he made the calls. He learned that his Accounts Receivable clerk had been harassing the clients’ Accounts Payable team. The A/R clerk, a young guy, would stalk any young women in the A/P department on Facebook, Instagram, etc. and even show up at their offices after work. Jared’s clients made the decision to change vendors in order to protect their employees.
Jared was shocked. He apologized and explained that he had heard some rumors internally and had fired the A/P clerk a while back. However, he had no idea how far reaching the damage was. Many of Jared’s former clients confided that they didn’t know how to approach Jared with the problem – so they just changed vendors.
Now that Jared had started the dialogue, he asked how he could win back the business. Several former clients admitted that Jared’s company’s services were much cleaner, more efficient and more cost effective than his current provider. They agreed to talk again when their current contract was up for renewal.
Results: Jared made a point to talk with his major clients quarterly – to follow the BOMBA script. By reconnecting with his former clients, Jared restored two relationships resulting in almost $1 million in revenues and approximately $250,000 in bottom line profits.
It’s critical for the business owner to talk with his/her clients. Good sales people are consistent in the sales process but less concerned about the relationship. They usually do not have access to the business owner or would not ask the kinds of questions that would have uncovered this issue. Only the business owner can get these results.
Additionally, because of their frequent conversations, Jared is forming a joint venture with one of these companies to expand their offerings outside their current territory. This should result in an additional $500,000 in revenue. Jared credits his BOMBA experience and his peer group with these results and his expansion.
Challenge: Joe owns a fabrication and distribution company that creates steel products for the commercial construction industry. The product must be manufactured to precise specifications and delivered to the construction site on a very tight timetable. It's a heavy product which is expensive to transport, especially as his company serves a six-state geographic area.
Joe had always believed that one of his competitive advantages was his timely delivery. To meet his clients' needs, Joe operated his own fleet of tractor trailers which delivered product to the job site under the tight time table -- but then dead-headed (no cargo) back to the centralized fabrication site. This was expensive and wasteful.
Story: BOMBA's study of Operations required Joe to evaluate this practice. After a member of his BOMBA peer group recounted the success he had with outsourcing, Joe looked in to it.
Working with his accounting staff, Joe first segregated the trucking costs from the other expenses in his business. He finally knew the actual cost of operating the fleet. Armed with this new information and confidence to make a change, he issued RFPs for a dedicated logistics operator to ship his product. He found three with excellent reputations and selected one.
Results: During the first year under the new contract with his dedicated provider, Joe's company still had timely deliveries to every construction site and he improved his gross margin by almost 6% -- saving more than $300,000 by outsourcing the transportation.
Challenge: One of BOMBA's business owners has a successful company that manufactures specialized tools. He felt the time was right to implement his succession plan and name his son-in-law, Peter, to serve as CEO. He wanted Peter to enroll in BOMBA so Peter could learn about all elements of the business that he'd not been exposed to, and for Peter to have a peer group to turn to for support and guidance in the future.
Story: The company was well established with many employees that had worked for the company for decades. Although there were no formal policies and procedures in place, the business felt like a big family. Since the employees all "knew the ropes," no one considered the need for them.
When BOMBA's Operations chapter presented the opportunity for the peer group to discuss their respective companies' policies, procedures and controls, Peter relied on the lesson and testimony from the group to make a change.
With lessons learned in the BOMBA curriculum and with testimonials from members of his peer group, Peter implemented strong policies and procedures that led to an unfortunate discovery. Peter uncovered a huge fraud. The company's controller, who was an eighteen-year-veteran of the company and "knew the ropes" had been taking $100,000 each month out of the company and cooking the books (by increasing the A/P) to cover the theft. She planned on leaving when she reached her goal of stealing $1 million.
Because there were no policies, procedures or controls in place, this employee was able to steal $500,000 without anyone's noticing.
Results: Peter and his leadership team created and implemented policies and procedures that included initiating dual financial control practices. Once in place, the company caught the thief and recovered the money she stole. The former controller is now in jail.
Challenge: Bob's company reduces property and equipment taxes for businesses with millions of dollars of fixed assets -- on which these businesses must pay high property and franchise taxes. Bob's company has always generated solid top line revenue, but minimal bottom line net profit. He decided to join a BOMBA peer group to learn how to be make his company more profitable.
Story: TBob's business strategy focused around his pricing model. Most tax reduction companies (and all of Bob's competitors) charge a percentage of the savings they find for the client. However, Bob's company charged a flat fee for their services. While his competitors only accepted clients whose savings were projected to be large, Bob attracted clients who were turned down by his competitors because they were deemed less profitable. .
Working through the BOMBA curriculum, Bob started to understand why his company was not making a profit. In the Financial and Pricing exercises, he learned that he was not properly allocating his variable costs: research, time, overhead, and administrative costs. The actual costs and his A/R days outstanding were much higher and longer, respectively, than he estimated in his model.
With his new awareness of the factors that go into a proper pricing strategy, Bob needed to raise the price of his service to insure adequate margin. Since his "competitive edge" had always been to be the "fixed-cost provider," he approached is longest tenured client about his rate increase. The response was begrudgingly positive, so he instituted the price increase across the board. Although he lost a few clients through this transition, Bob understood that these clients were not accretive to his bottom line.
Results: Bob increased both his revenue and his bottom line by almost $400,000. Bob might not have taken the necessary steps to increase his prices if he had not been encouraged by his BOMBA cohort. Bob believes that, without BOMBA, he might have had to shutter his business.
Challenge: Abby owns a printing/technology company. She joined a BOMBA cohort because her sales were stagnated at $4 million a year -- she wanted to learn how to increase revenue and grow her business. Her expectation was that she would learn revolutionary sales tactics and her sales would increase double digits. Though she did increase sales dramatically, it wasn't through sales tricks and tactics
Story: As the founder and leader of the company, Abby is her company's best brand ambassador and the top sales person. Unfortunately, she lacked the time to spend "in the market" building brand awareness and sales and revenue growth suffered.
While participating in a Time Management exercise one evening during BOMBA, Abby learned how much time she spent "managing" the company. She was surprised at how much time was required of her to handle the finances, administration, operations, and production services to meet the clients' needs. Although she excels at management, her passion and greatest strength is selling, yet she was unable to do so because of the time she spent doing other tasks.
With new awareness and suggestions from her peer group, she set a goal to clear two hours of each day for sales and to prioritize her calls to her best prospects (which she also identified in a Customer BOMBA exercise). Her peers encouraged her to delegate and outsource tasks that others could do - giving her time to focus on her favorite task, sales. Through BOMBA, Abby learned that revenue growth is a complicated issue for business owners and requires evaluating many different factors in the business to succeed.
Results: One year after she implemented the time management plan she adopted through her BOMBA experience, Abby's revenues grew almost 20% to $4.8 million. The next year, revenues grew by more than 30% to $6.5 million. Her company was able to add two new hires to handle increased business and enjoyed a $200,000 and $450,000 net profit increase by the end of the first and second year respectively.