James Law’s - Etesian Group
Contact James Law on 0409 199 547
I can also be found on Twitter and Linkedin
Location – Perth Western Australia
Client base includes Western
Australia , South Australia and Northern Territory
IS THIS YOUR STORY?
I have been going to the same doctor
for many years so he is familiar with my financial and consulting background.
My doctor asked if I would meet with a friend of his who was experiencing
financial difficulties. Naturally I agreed.
The friend’s business had been going
for nearly 60 years, and had been owned and operated by his friend for some 25
years. The business has a turnover of about $20 million. There were 3 partners
in the business. One of the partners had defrauded the business of about
$800,000 and had been removed from the business.
I cannot identify client businesses,
but this was a manufacturing business. Like many it was suffering from the
economic downturn that affects many non-mining businesses. During examination the
following became apparent:
·
They
are very good at what they do and know their industry extremely well.
·
They
had been successful over an extended period.
·
Business
is tight.
·
They
had considerable assets, but also had a lot of debt on property
·
Due
to the fraud they were unsure whether they solvent or not
·
Due
to the fraud they could not rely on their accounts.
We cleaned up the financial records
and established a meaningful reporting system. We discovered they were
genuinely (excluding the fraud) losing about $800,000 per annum.
I asked the owners to tell me what
their latest month’s figures told them. They couldn’t. I asked them what
percentage return they expected on turnover. Again they couldn’t tell me. Their
actual performance was meaningless to them! They understood their industry and
market. They are very good at producing and selling their products. They are
honest and extremely nice guys. But they were also accidental managers! Profits happened by accident!
Let me tell you……..this
is the norm! Most business people are accidental managers. We worked through the
issues facing this business and by the time we left 9 months later it was
making $1,200,000 per annum. A $2,000,000 turnaround! We had installed new
procedures and reporting strategies. Most important of all the owners now
understood their figures, and how to use them to their own benefit.
Most businesses, especially family
businesses do not properly understand their results, are unable to analyse
their performance, or proactively pursue improved future performance and
strategies.
A company’s reports are not just for
the tax office or the bank. They are the manager’s greatest tool. Too many
managers undervalue and underutilize them at their own peril.
Saul Eslake, a leading Australian Economist
recently stated that the next government would have to be very proactive to
avoid a recession. The same must be said for business.
Remember, only the most
professional businesses survive in the long run!
Business turnarounds and performance
optimisation are key specialties at the Etesian Group. Transform your business
today using an outsourced or interim CFO from the Etesian Group.
Contact James Law on 0409 199 547 or
at james.law@etesiangroup.com.au today to discuss how
best a review might be implemented within your business.
Cheers
James Law
0409 199
547
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