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Incisive Financial Understanding

'T'

£300k turnover designer ladies shoe business - a profitable and cash-positive wholesale operation selling globally albeit the odd poor season had taken a disproportionate toll on the business. With support in the form of a grant the client asked us to advise on the financial implications of expaning into retail.

Hitherto running the cash flow principally in her head, the Proprietor was unclear about the financial implications for the business of funding the acquisition and operation of a retail outlet. (Not surprising given the multi-currency and seasonal peaks and troughs of her business. It was one of the more complex cash flows we have had to compile despite the deceptively small size of the business.)

After examining the cash flow design of the business we helped further the Proprietor's understanding of margins in order to refine pricing strategy. As a result of the changes she then made to both wholesale and (proposed) retail prices, she needed to sell fewer pairs of shoes each season before she made money. The retail targets were in fact comfortably within her expectations and she went ahead.

An aside in this exercise but an important point that one is perhaps more likely to encounter where a business is driven by passion rather than hard-nosed commercialism, was that the bespoke IT system that was central to the business, was geared to managing logistics, deliveries and customer relationships. But extracting even the most rudimentary financial information was near impossible and reflected the lack of priority ascribed to this area. Given the volatility in cash flow month-to-month this represented a huge gamble.

Interestingly there was also intense pressures from her key offshore sub-contract supplier to push up costs which, for any business beholden to such arrangements, is deeply unsettling. The key concern was whether their business was in serious financial difficulty and thus fail to supply the stock for the coming season or whether frankly, they were just tryiung to be opportunistically greedy. We were able, from our work on their accounts, to show that their demands were more likely to be based on greed and thus enable claims for significantly higher costs to be rebuffed.

 

What does this case demonstrate?

By tracking the cash flow of any business largely in your head, it's difficult to get a clear top-down view of where your cash is coming from. If you lack confidence in the financials, you become rightly cautious about making step-changes in the development of the business. In this case, albeit with a desperate need to upgrade the financial systems, the expansion into retail appeared entirely viable.

 

Working with you - the benefits

 

We look to make an immediate impact whatever the starting point. You can count on our proven cash flow and profit improvement expertise

  

We do what it takes to get to the answers helped by extensive cross-sector experience drawn from both our financial support and training work

  
         
 

We put your interests first and stand shoulder to shoulder with you, through the ups and downs, until you have what you need

  

We make ourselves available, including outside normal working hours

  
         
 

Unlike others, our financial support is geared to making you more self reliant not more dependent.

 

We understand funding issues better than most - particularly what's achievable and what isn't. We can also help you quantify what you need, put together the business case and help you access what you need quickly

  
         
 

You will find us extremely cost-effective. With the benefit of e-mail, scanners and sending information in pdf form, off-site and largely virtual support is usually entirely workable

 

We are as happy to look at small, one-off exercises as larger more complex turnarounds. The variety of case histories hopefully gives you a flavour of this range.

 

 

Working with you - How we charge

 

Free initial meeting (in confidence and without obligation)

  

We offer a quick initial viewat sometimes reduced rates to establish if a business can be made viable or has gone too far

 
         
 

We can work on a day-rate basis. Tends to be where work is one-off or short-term in nature or in situations that, at the time of our involvement, are inherenetly uncertain

 

We can work based on a monthly retainer where the relationship is envisaged to be ongoing or have a duration of 6+ months. Examples include non-executive finance roles or detailed profit improvement programmes

  

 

 
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