A Cash Gap Plan In A Service Company
This week I’m writing about using a Cash Gap Plan in an service company. A Cash Gap plan will help you to quickly collect your outstanding receivables, get your customers to pay faster, and negotiate better terms with your vendors to improve your cash. I have been writing about some of my hero clients and how we are able to achieve significant results from our work together. We have 36 Coaching Modules, which are areas within your business that when we improve your performance in these areas, your business will run better.
Robert’s Service Company Challenges
Robert is this week’s small business hero. He owns an service business that has been in business for over 50 years. When I met Robert he was interested in selling his business. Although he had been successful in growing his business, it was having financial problems. To make things worse a very large customer had defaulted on a payment of nearly $200,000. This event had him thinking about filing bankruptcy. He was working very long hours and was constantly interrupted by customers and employees. This was affecting his health and personal relationships with his family, in particular, his wife. He was spending very little time with them.
Solutions for Service Company: Strategic Plan, Team Deployment, Tactical Marketing, Lean Program
We decided to implement several of our Coaching Modules to address his situation. These included a Strategic Plan, Team deployment meetings, Tactical Marketing Plan, but most importantly a Cash Gap Plan, Time Management Plan, and a Lean Program.
A Cash Gap Plan for Robert’s Business
A Cash Gap Plan is all about carefully monitoring your plan to improve collections, lengthening your payments with vendors, increasing your prices aggressively as possible, and eliminating operational efficiencies. In all things in life, we tend to get what we focus on. During our coaching sessions, we focused on his cash flow.
Time Management for Robbie’s HVAC Company
We developed his Strategic Plan and held team deployment meetings. Additionally, we discovered a serious time management problem. Employees and managers were constantly interrupting one another during the day. This wasn’t causing chaos and stress in the business. We began to track interruptions and developed policies and strategies to reduce distractions. We also implemented team meetings in the business.
Results for Robert’s service Company
As a result of these strategies, his results were immediate and dramatic. Here’s what Robert said:
Alan first worked with me one-on-one, then met with me and my managers, and finally with all of the employees. Our cash flow has started to improve and continues to improve daily. After six months our profits had increased over $152,000, which annualized is over $300,000 per year! We have started paying off our accounts payable to our vendors. We have reorganized our office and improved our staff with Mr. Melton’s help. We are starting to achieve many of the actions in our action plan. I have a clearer vision of where we are going and what it takes to get us to the next level. With this clearer vision comes renewed hope. Most importantly, I am working less and have started taking my wife out on dates. I would like to thank Alan for seeing hope in me and my company, and helping us through this difficult time.
Congratulations Robert for your remarkable success in using a Cash Gap Plan and other strategies to improve your company! You are one of my business heroes and an inspiration to other business owners. You can view another case study using a Team Building System in a landscaping company here.