The problem

There is a desire to grow “but not too quickly as we want to remain profitable throughout that journey”. It is expected that an exit might be sought in 10 to 15 years.

The company is nicely profitable but the directors recognise they need to develop a more rounded and commercial skill set in order to successfully take the business to the next stage. 

The client

The client is a small £300k lift company run by two directors: a father and daughter top team.

The father is a time served apprentice with 30 years’ experience of the lift industry and technically brilliant. The daughter, also a qualified lift engineer, takes responsibility for both onsite works and the administration activities.

The approach and solution 

The initial phase of the work concentrated on understanding the income expectation at exit. A number of calculations* were made with regard to the revenue generating potential of existing assets; pensions, ISA’s, “buy to lets” and the income generated today and predictions for the future. Astonishingly, it was identified that the income from existing assets would today produce an income stream just above their future expectations.

This revelation allowed the director’s two choices 1) to decamp and wander off to Barbados now 2) to take perhaps more risks with the business knowing that “the downside” is already covered. One word of warning however – at the moment whilst the income is in theory, “sufficient” there is currently no “margin of safety” necessary to accommodate any potential financial shock; for instance a stock market or house prices crash.

  • The decision made has been to grow the business cautiously, build a margin of safety and spend time improving processes and practises.

*Statius Management Services are not qualified financial advisors and as a result professional help was also sought

The outcome 

As a result of the intervention outcomes to date include:

  • A monthly target was set & processes developed in order to win new repeat business – The target is regularly beaten
  • The target market was reviewed in order to identify and attract a small number of “ideal clients”
  • A series of case studies have been developed to appeal to the specific problems identified as critical to the ideal clients
  • A quarterly planning process has been developed which ensures attention remains focused on the high priority issues
  • A financial plan has been developed which provides crystal clear visibility via 1-page window into the entire years finances