STRATOSFEAR’s goal for businesses in the Infancy Stage is to position them well for the next stage of growth. We want to accelerate the Growth Path and avoid “predictable problems” which then manifest as “abnormal problems” limiting growth or result in early business mortality.
We want to avoid management getting lost in the “fog of war” and have a strong long term focus on value creation.
STRATOSFEAR seeks to focus on building long term value…….because greatness is difficult to achieve on your own.
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- Endeavouring to establish scale while seeking to maintain profitability – Often difficult to generate commercial returns.
- Difficulty of investing ahead of the curve to enhance productivity and efficiency – The solution often feels just over the next horizon and remains just out of reach.
- Constant sense of financial pressure - Reliance and dependence on bank funding with few alternative options.
- Chasing revenue to support cash flow, often at the expense of margins and overheads – profitability remains challenged.
- Absence of time and space to focus on systems, policies and process - Reliance and dependence on key people rather than systems.
- Sub optimal resource allocation – People and Equipment.
- Overstretched and under resourced management – Management are stuck working in the business and not working on the business.
- Time poor - absence of planning, review and follow up.
- Unsophisticated accounting and reporting – Reporting is used more for tax and compliance, rather than business analysis and decision making.
STRATOSFEAR Service Solutions
The service solutions for SME’s include, but are not limited to:
- Business Mentoring.
- Budgeting –‘Three Way’ Financial and Economic Modelling.
- Pricing and Margin Management.
- Cash Flow Forecasting and Management.
- Revenue expansion – Business Development and Client Management.
- Financial Literacy Training – Understanding the impact that all staff have on financial outputs through their decision making.
- Establishing basic management processes.
- Assist with Contract negotiations.
- Establishing systems.
- SWOT Analysis and strategic ‘limits to growth’ analysis.
- Assist with funding and establish guidelines.
- Build overall management and staff bench strength.
A business owner came to us wondering if he was throwing good money after bad as he continued to invest in his business, despite continuing to just break even. The task was to identify and tailor financial strategies to identify the underlying cost structure and look for the critical touch points. Our first step was to evaluate the quality of the proposed spending.
<$10 MILLION TURNOVER
HOSPITALITY AND LEISURE INDUSTRY
We developed an “Investment Paper” template to focus on the returns to evaluate the quality of spending. Priority was given to the best returning expenditure items, with a focus on productivity and efficiency. The key question was “Does this spending make commercial and economic sense?”
THE STRATEGY AND OUTCOMES
- Improved returns then helped finance the next level of expenditure. The business was more capable of self-funding capital expenditure, which resulted in a reducing reliance on bank funding.
- Next we constructed a three-way Budget Forecast (an integrated Profit & Loss, Balance Sheet and Cash Flow). We then played with a number of key assumptions to determine a realistically achievable “Best Case Scenario”. This produced three key business metrics to focus on.
- How do we increase revenue?
- How do we increase the average client spend?
- How do we increase the average Gross Profit Margin?
- The resulting strategy action items saw the business go from breakeven to a $400K profit in the first 12 months, almost identical to the “Best Case” Scenario forecast.
Results like this are not just about the strategy, they are highly dependent upon the ability to execute the strategy. That is the STRATOSFEAR difference. We help the client develop and own the strategy and we work with them to ensure appropriate execution.
STRATOSFEAR harnesses the knowledge and experience of our staff in order to help clients transition from each of the various stages in their Corporate Lifecycle evolution. If clients conquer the transition points in the business lifecycle, they often go on to achieve something truly special.
This is what makes STRATOSFEAR one of a kind. Very few advisory firms can successfully help businesses grow to become large corporates as STRATOSFEAR does. If you have the desire to become an aspirational business, we want to hear from you.