170% growth in sales in 12 months seems too good to be true, right?
Well, in the video above, Don takes us through the 4 key levers that SME Growth Services (SME) pulled to help its client achieve the unachievable.
It always starts with the business strategy to manage the priorities. For this client in particular, the 4 keys they needed to focus on were:
- Setting the Net Profit margin
- Meeting the market
- Accountability on site and in projects management
So, let’s start the story at the beginning.
The client is a construction company in Melbourne with a $4 million turnover and losing 2.4 cents in the dollar (So for every dollar they invoiced, it was actually costing them 102.4 cents)
First step – SME cleaned up the client’s books and started creating timely and accurate accounts.
The next step was to set clear targets and get to work on them. Ahmad, SME’s Head of Management Consulting, worked daily with the client. The strategy was to increase sales whilst decreasing overheads (sometime the simplest solutions are the least obvious).
In order to tackle the sales, the business had a gap, so recruitment was necessary. The new salesman was a major key to this transformation. Having someone who knew the industry, who was hungry and who was a team player was vital.
After a while, it became obvious that in order for the leads to start converting, the company needed to become more competitive in its pricing – they needed to Meet The Market.
Gross profit had to drop to 15% – which meant the operations and sales costs needed to be tightened. This led to improving accountability and accuracy across the business, mainly through the introduction of customised job costing and project management software.
Creating transparency between operations, management, and what’s happening on site has been the key to ongoing growth and improved net profit for the business.
In the past 3 months, the company has grown sales by 170% and seen an average of $84,400 Net Profit per month which is 13.5 cents in the sales dollar.