Painting Company
From Financial Chaos To A Colorful Comeback
Over the course of 18 months, this painting company owner was struggling, despite generating over $5 million in revenue. His focus was on his salespeople rather than the business, which led to financial losses and shark loans that worsened the situation.
Key problems identified by a business consultant included high-interest loans, poorly aligned sales compensation (based on sales price rather than profitability), and incorrect pricing that didn’t cover costs. The strategy implemented included paying off high-interest shark loans, restructuring the sales team’s compensation to align with company profitability, launching a customer retention and referral program, and revising the pricing structure to focus on minimum profit margins instead of volume.
Results:
- Shifted from $100k negative cash flow to $350k positive cash flow
- Paid off all shark loans
- Improved sales team morale and alignment with company goals
- The business became profitable with cash reserves
Marketing Agency
Dramatic Turnaround
Five years ago, a marketing agency owner was in a dire financial state, with a $350k net loss and severe negative cash flow. Despite being a talented marketer, he lacked the knowledge to manage his business finances, and his employees were earning more than him, despite him taking all the risk. After having a business consultant conduct a thorough financial assessment, the primary goal was set: to increase gross profit from his services. Over several months, the client paused sales to focus solely on this objective. Though he ended the year with a reduced loss, the following year, he saw a dramatic turnaround, generating $250k in profit and positive cash flow of $100k—a $500k improvement. Now, he runs a healthier, more profitable business with less stress and continues to be a client.
Real Estate Photography/Marketing Company
Refocusing On Profit
This real estate marketing company generated $4 million in sales but was losing $6 million due to poor pricing, high overhead, unsustainable employee compensation, and reliance on investor loans. Despite double-digit growth, profitability was never achieved, and cash flow issues were severe. Inefficient operations, excessive marketing spend, and high customer turnover compounded the financial strain.
Actions Taken:
The company underwent significant restructuring:
- Cut staff by 50% over two years, eliminated unnecessary roles, and moved to a remote workforce.
- Raised prices, reorganized sales and customer service, and eliminated discounting privileges.
- Shifted marketing focus to strategic partnerships and renegotiated contractor rates.
- Set strict profitability criteria for projects and dissolved non-profitable licensing agreements.
Results:
- COGS reduced from 62% to 50%, and operating costs fell from 87% to 50%.
- Customer acquisition cost (CAC) dropped to under $300, and lifetime value (LTV) increased to $3,478.
- Customer turnover reduced, and commercial projects grew to 50% of revenue.
- The company achieved its first net profit of $49k, with projections of $350k by the third year.
- A merger and acquisition (M&A) deal was brokered, leading to a sale and a $6 million royalty agreement.
The restructuring saved the company, provided investor returns, and restored the CEO’s personal and financial stability.
