An established receptionist service in downtown Chicago was struggling with low profits and dwindling revenue.
We conducted a business assessment and identified four critical areas which needed improvement:
- Unbalanced Revenue Portfolio – Client had several revenue streams, but they were out of balance. The largest revenue stream (telephone answering service) was barely profitable and took time away from much more profitable services such as transcription, research, and editing.
- Debt – Client had a large outstanding debt at a high interest rate. She was not making enough money each month to pay off any principal.
- Staffing & Operations – Client needed to transition from working “in” the business to working “on” the business. This required hiring additional staff as well as setting up and perfecting numerous internal procedures for efficiently handling sales, invoicing, project management, internal reporting, and other tasks.
- Marketing – Client obtained most new customers from word of mouth and Yellow Pages advertising. Over the past few years, word of mouth seemed to stop working, and the Yellow Pages ads cost more than they brought in.
Ground Floor Partners worked with the client to set specific objectives in each of these areas, and helped her implement an action plan to improve profitability. We helped the client develop a preliminary marketing plan to acquire new customers at a lower cost, and grow the company at a rate she was comfortable with. We focused niche marketing efforts on attorneys and other selected groups of customers with very demanding needs, who are willing to pay a higher price for quality work. We also helped the client restructure her pricing so it was more in line with what competitors were charging (she had not raised her prices in years and was leaving money on the table). We helped the client define several new staff positions, helped her recruit several staff, and assisted her in improving numerous internal procedures. Finally, we helped her work out a debt repayment plan, where the client increased her monthly payments to quickly reduce outstanding principal.
Our client sold the low-profitability answering service, and has gained new customers that are more profitable and have higher growth potential. Gross margin has improved significantly, and she has paid off all long-term debt. She has hired several new staff to assist her with the expanded workload, and is now able to take several vacations each year. Now over 30% of her new clients come from referrals, and most clients are long-term.