Case Studies #1

• Background:
  • Retail establishment experiencing slow sales, lax controls, an unmotivated staff, and a challenging location.
    
• Analysis & Recommendations:
  • Balance Sheet and P&L examination
  • Re-evaluate current business plan
  • Develop new marketing plan
  • Analysis of SOP’s and their utilization
  • Investigate potential new location
    
• Actions:
  • Examination of financials uncovered multiple duplicate payments to vendors creating unrecognized credits on accounts, inaccurate invoicing of customers, and unnecessary recurring services and purchases, all of which pinched the cash flow of the business.
  • While re-evaluating the current business plan, we decided to shine a spotlight on profit centers we determined to be more profitable.
  • Due to inconsistent marketing strategies that were expensive with little return, we implemented a marketing strategy focused on the previously mentioned profit centers, and a steady, budget sensitive investment, followed up with tracking methods to determine accurate results.
  • Analysis of current SOP’s revealed the need for updates and documentation. We identified opportunities for streamlining personnel responsibilities, and wrote current SOP’s, training and certification materials, and an Associate Handbook.
  • We recommended delaying the relocation of the business due to the aforementioned cash flow issues.
    
• Results:
  • 150% growth in sales, while still occupying the current location
  • An educated and consistent study of financials
  • A habit of developing, continuous analysis, and updating business plans
  • Tight internal controls e.g. sales audit, payroll, vendors, and inventory
  • Personnel that is well trained, customer orientated, and involved in the business
• Future:
  • After these successful results and careful analysis, we determined the business could, in fact, relocate recognizing a 1% to 3% loss in current business, but capture 13% to 15% in new business due to the exposure the new location will bring. Our forecast regarding relocation expenses show an ROI of 18 months or less, and a reduction in annual location lease expenditures. Relocation is expected to be complete by the end of the third quarter of 2009.