Situation – In 2005, a manufacturing company was Colorado’s industry leader. However, they became very concerned about losing business to new competitors in China. Additionally, other U.S. companies were making plans to establish facilities in Colorado and achieve a significant market share.

Action – This manufacturing company engaged American Business Advisors to establish a Formal Strategic Business Plan, which included a Competitive Positioning Plan℠. The objective was to defend the company’s share of the market and allow the business to thrive and grow to the next level.

Result – Today this Colorado manufacturing company is top in their industry. They are the “800 pound gorilla.” Their competitors openly tell them it is nearly impossible to get customers away from them! Since 2005, they have worked with their customers and now treasure a 44% market share. They have grown 67% and their Net Income Before Taxes has increased 73%. They have been profitable every year since 2005, including during the recession years following the 2008 mortgage crisis, the 2nd worst in U.S. history. They are known across the nation for their innovation, technical abilities, and outstanding success. They are frequently asked to speak at seminars and workshops across the country.

“Our profits and compensation have increased substantially and are dependable. Before hiring ABA, we were working 60-70 hours per week.” – Owners

Situation – This three-year-old engineering firm was founded by a division manager of a large engineering firm and was joined by three key engineers. There reputation gave them instant credibility and the company took off like a rocket. Although making money the first year, they lost money the second year and profitability when hiring ABA in the third year was weak. Cash-flow was tight and their bank was concerned so they recommended the company talk to American Business Advisors. A needs assessment determined the owner wanted to 1) Build infrastructure to support growth, 2) Find people to fulfill needed roles, 3) Double the revenue of the firm, 4) Locate new marketing opportunities, and 5) Increase cash flow.

Action – ABA performed a series of Developmental ConsultingTM services to accomplish the company’s objectives, including:

• Performing a Strategic Financial Analysis of the company and recommend how to increase profits and cash flow.
• Developing a Strategic Financial Forecast of their profits, cash flow, and capital requirements and create a plan to get them into the top 25% of the industry
• Developing a Marketing Plan and Implementation Plan
• Creating a performance compensation plan
• Assessing current practices, processes, and systems, document them and define solutions for reengineering them
• Recommending new software
• Creating an organization design to take them to the next level.
• Providing an outsourced Chief Operating Officer
• Developing a formal Strategic Business Plan
• Developing five year exit strategies to accomplish the owner and wife’s personal objectives

Result – At the end of the first year the company’s revenue increased 29% and Net Income before Taxes increased $292,000 over the prior year. At the end of the second year revenue increased 57% over the prior year and Net Income before Taxes increased $563,000 over the base year. Systems were redesigned and new software installed so the management team could track jobs and determine profitability on them. The bank increased their line of credit. In year three they rested their line of credit for six months and increased it again to prepare for a backlog of new contracts that will create significant growth next year. They also established an effective management team. The company’s Current Ratio is 7.8 to 1 and their Debt-to-Equity Ratio is .2 to 1. Net Income before Taxes this year is tracking to end the year again at about $550,000 over the base year. Currently, the company is realistically projecting at 46% increase in Revenue next year and a Net Income before Taxes of 13.8%.

Situation – This second-generation manufacturing company had a good market niche in a very competitive worldwide industry. They were highly respected for quality service and had exceptional potential to grow. However, their financial performance had been weak, resulting in a ($286,000) loss the year before, and negative equity resulting in the inability to get the capital they needed to grow and realize their potential. The company hired ABA to establish positive cash flow and profits, establish formal business planning, understand the numbers from a business perspective, refinance and consolidate company debt, and obtain objective business coaching and take the company to the next level.

Action – ABA performed a series of Developmental Consulting Services™ to accomplish the company’s goals and objectives, including:

• Performing a Strategic Financial Analysis.
• Developing annual Strategic Financial Forecasts of their profits, cash flow, and capital requirements.
• Determining their capital requirements and assisted them in recapitalizing the business -without giving up any ownership.
• Developing a formal Strategic Business Plan to strengthen their Competitive Position and Strength, Strategic Structure and Financial Structure.
• Preparing a Vision/Mission/Purpose Statement and strategies to accomplish it.
• Preparing a five year financial business plan to assist in financing and long- range planning.
• Business coaching to effectively move through the phases of business growth.

Result – By the end of their first year of engagement with ABA, the company increased their Net Income Before Taxes by $390,000 over the prior year. In the second year of working with ABA their Net Income Before Taxes increased $552,000 over the base year and they had a debt-to-equity ratio of 1.7:1 and a current ratio of 2.75:1 after we helped them do a recapitalization of the business. Currently the company is effectively competing with small, mid-size, large and huge companies while doing business across the U.S. and internationally. Revenue has increased 480% and profits are running at 8% of sales. The company has a debt-to-equity ratio of about 1.35:1 and the company contributes 10% of its pretax net income to charities. They are now making new plans to go to the next level.

“Although successful, we were always putting out fires prior to working with American Business Advisors. We didn’t have a clear strategy for contending with national competitors to grow the company and we were always worried about cash flow. Your effective business planning services have given us a clear picture of where we are heading and the confidence that we can accomplish our business objectives. Our profits and cash flow have increased significantly and we have obtained the capital and financing we needed to get to the next level of growth. Our entire management team is focused on high payoff activities and they know what to do to reach our goals. The most valuable thing ABA has given us is a knowledgeable outside perspective and forcing us to think outside our box in order to grow the company, improve profit and cash flow, and respond to changes in the industry and economy as we grow. We are very pleased with our relationship with American Business Advisors and highly recommend other small and mid-sized businesses use your services to help meet the challenges they face.”

President and CFO, Owners

Situation – As the leading structural floor contractor in the local home building market, this company held more than a 40% market share and enjoyed an outstanding reputation for product excellence and exceptional customer service. Although experiencing 48% compounded growth over the last three years, the company’s financial performance ranked in the bottom 25% of the industry. The owner was not reading the financial statements because “they were not reliable.” The founder and CEO hired ABA to increase profits and cash flow, establish a sound financial structure, improve financial statement reliability and timeliness, establish a formal business plan, and develop an organizational structure that is self-sustaining.

Action – ABA performed a series of Developmental Consulting™ services to accomplish AFC’s objectives, including:

• Preparing a Strategic Financial Forecast of profits, cash flow, and capital requirements
• Determining the right financial structure and ideal size
• Helping reduce costs and setting financial goals and performance measures
• Getting financial statements current and reliable
• Coaching on how to use financial statements for decision making
• Obtaining new bank financing at greatly reduced cost
• Developing Strategic Business Plan
• Facilitating the creation of a Business Action Plan
• Providing management training and development of the Executive Team

Result – Financial statements became current and reliable within the first three months of working with ABA, and the owner was able to use the statements to manage the business. Profits increased about $60,000 per month and AFC ended the year with increased profit and owners’ compensation of $748,000. Their Debt to Equity ratio went from 7.8:1 to 1.2:1. Their Current Ratio went from 1.1:1 to 2:1. The bank doubled AFC’s line of credit. In spite of a significant downturn in the home building industry in year two, AFC again increased profits and owners’ compensation by $577,000. The owner and his wife contributed $176,000 to charities, and they are now spending two days per week at their mountain home.

“The way you are able to mix new insights and strategies into our plans and strategies without significantly changing how we do business is very powerful and helpful. In short, I am absolutely happy with ABA and would tell other business owners that even though ABA may not know your particular business, they know the ‘business of being in business’ very well and can advise you in such a way as to greatly improve your financial performance and get you set up to ‘drive the bus’ to your desired destination.”

Founder and CEO