Sound financial planning that saved this business and eventually helped it sell for a healthy sum
The Problem: Like many businesses that have multiple owners, it is often difficult to get everyone on the same page about where to spend money to grow the business. A client of ours, with two business owners (both with very different approaches to spending) was losing money. Their disagreement led to a lack of planning, overspending, and severe angst between the partners. If they didn’t resolve this problem quickly, they were going to go out of business.
The Solution: Gemsbok worked with this client to evaluate where they were spending money and why they were losing so much. Next we established a spending plan, creating reasonable guidelines for spending in each area. Implementing a budget allowed both owners to acknowledge overspending habits and hold themselves accountable to spending targets. Gemsbok continued to work with this client on budgeting and helped evaluate actual spending on a monthly basis to make sure the owners remained on target.
The Result: Establishing a budget helped the owners stop overspending and held them accountable to specific spending goals. In addition, it helped resolve the fight between the owners, as it was no longer personal. The budget essentially created an ‘operating agreement’ where budget-to-actual variances could be discussed more concretely and dealt with more effectively. Within 12 months, this company was operating in the black and recently sold for a healthy amount.