- Unable to take on more work, the company was losing revenue, yet actual amounts and capacity levels were not well documented or understood. This also made it difficult to accurately measure utilization.
- Planning and scheduling was performed manually, hindering efficiency.
- The lack of defined business processes and supporting tools meant that expansion and the ability to execute was difficult to justify.
We leveraged our core Value Assessment & Roadmap approach to assess the company’s operations, leadership team and the proposed expansion plan. We then defined an expansion strategy and supporting business case to build sales while improving operations to maximize ongoing value creation.
1. Current State Assessment
- Operations Assessment – We analyzed every business process and supporting system to identify areas of strength and weakness. Our benchmarks and process models helped the company’s team understand how similar firms excel and identify the company’s most valuable areas of opportunity.
- Human Capital Assessment – Using our proprietary CultureView toolset, we assessed the company’s leadership team and company culture to identify specific areas where targeted changes could be made to support success as the business scales while maintaining the intended culture.
- Expansion Assessment – As part of our overall approach to the expansion strategy, we assessed the company’s market position and competitors to understand the market dynamics and barriers to expansion. We also spoke with the company’s existing customers to understand their motivations, concerns, and ability and willingness to expand business with the company.
2. Future State Visioning
- Capacity & Utilization – We defined a new model based on leading practices to more accurately define the company’s capacity and track utilization.
- Expansion Opportunity – With true capacity and historical utilization better defined, we painted a picture of what the expansion opportunity could look like if utilization trends continued, while gains in efficiency represented significant additional upside.
3. Roadmap & Business Case
- Customer Segmentation & Sales Planning – We segmented the company’s existing customer base using revenue composition analysis and defined a unique growth strategy for each segment. Leveraging our market analysis, we defined the amount of expanded capacity that could be filled from existing accounts versus new work the company would need to win from competitors.
- Business Case – With the true opportunity defined, we built a detailed business case to understand the cash flow impact and potential return on investment of multiple growth scenarios. We also worked with Cohen & Company’s tax team to incorporate an optimized depreciation schedule to maximize tax savings.
- Roadmap – To realize the benefits from this opportunity, we defined a clear roadmap. It included the expansion-related sales strategies as well as necessary process-, system-, and culture-related improvement initiatives to support the company’s expansion while improving efficiency and enabling long-term value creation.
The company and their private equity partner are now aligned around the expansion plan, supporting strategy and the ongoing value that this opportunity can create for the business. The company understands the key activities that need to be executed to ensure the success of this initiative and is in the process of planning these efforts.
When this expansion strategy is put into effect, the company stands to increase facility revenue by at least 25% with a five-year internal rate of return of 24%. They are expected to scale to fill the expanded capacity within 15 months.