Returning a failing business to profitability within 9 months.

The Situation:

In the late 2000's, I met an entrepreneur in the organic landscape supply business. One of the services he provided (as a loss leader), was a chemical free lawn fertilization program to residential customers in several cities in the midwest. While year over year revenues had grown, profitability, was declining. I acquired this business and set out to return it to profitability.

Goals:

  • Identify root cause of profitability challenges
  • Develop a turnaround strategy and plan to return the business to profitability within 1 year and sell the business for a 2-3x profit.

Approach

Step 1: Finding my Bearings

I started by working with the previous owner to deconstruct every aspect of the business which was largely in his head (and not written down). I defined who the customers were by conducting interviews with existing customers and talking to customers of our competitors. Then, I mapped the end to end customer journey which encompassed every touchpoint (awareness, consideration, purchase, service, support, retention, referral) and identified the existing and missing business processes and activities which support each touchpoint.

Then conducted both market and competitive research to better understand my unique differentiators and value proposition. This, in conjunction with a financial analysis led to an understanding of the current gaps, challenges, root cause drivers, and their business impact and enabled me to prioritize the issues for solving.

Step 2: Designing the Bridge

Next, I developed a vision for what I thought the business could be (based on market and competitive research) and what it needed to accomplish to overcome current gaps, challenges, and hurdles. I then crafted goals which when achieved would move me incrementally toward the vision. Then, I developed an achievable strategy and plan for achieving those goals.

Step 3: Building the Bridge

Finally, I followed the strategy and plan. I brought the people, partners, resources to the table to execute on my goals and vision and built a bridge to the outcome I wanted.

Results:

  • Grew customer base by 46%
  • Streamlined product set, supply chain, and sourcing saving 14% annually.
  • Grew revenue 60% through development and sale of new, higher margin services and expansion into new market segments.
  • Returned the business to profitability within 9 months and sold the business within 12 months for a 3x return on investment.

Business Growth Simplified