AFFORDABLE FIRE AND SAFETY
Chad Connor | Owner
I hired John about 9 months ago. We now have much better cash flow, we just had our best month ever (both top and bottom line) and we believe that better months are in our future. John's team will provide a business with the resources needed to grow. We meet weekly and it forces me to focus on my business and not just get wrapped up in the day-to-day. Now that we are getting a firm grip on establishing our processes, my stress level has decreased dramatically and I'm starting to enjoy my business again.
BACKGROUND
Affordable Fire and Safety is a family owned company that provides and installs commercial and residential fire safety equipment. AFS was started by Chad Connor in 1998, and they continue to pride themselves on customer service and integrity.
AFFORDABLE FIRE AND SAFETY
www.affordablefireaz.com
CLIENT INDUSTRY:
Fire Alarm and Sprinkler Installation/Maintenance
Ignited operational improvements to extinguish inefficiencies
The Challenge:
- Needed assistance in improving the operations, overall processes, procedures, and efficiencies within the organization.
- Needed to improve gross margins and cashflow
- Lack of performance in the construction division
- Lack of exit strategy planning
- Needed to improve revenue performance
- Low EBITDA and business valuation
- Needed to focus on developing a better culture
The Solution:
Empowered the client to move the needle in his business through:
- Lean on John Waters' experience in operating, building, and growing construction businesses as it relates to jobs and job cost.
- Focus on Key Performance metrics tied to performance compensation plans to improve the efficiencies of the technicians.
- Establish the baseline on the DSO (days of sales outstanding) and then work with the entire team on tracking the leading indicators that began to move and improve this.
- Working with the entire team to refine their workflow process.
The results:
- DSO improved from 46 days down to 35 days Substantial cash flow improvements to the point where owner was able to take a month away from the business
- We worked with the owner as he hired a qualified new Operations Manager. Today they have much better people and a much better culture as a result of establishing standards for the Technicians.
- Developed an Efficiency Tracking Board to improve Gross Margins by helping the Technicians become more productive and efficient.
- We identified the key performance metrics and then the leading indicators we would track that will improve the efficiency and eventually improve the gross margins. This helped to drive higher revenue with higher margins and a higher company valuation.
- Determined that the construction division was a deterrent to growth objectives of the business due to low gross profit margins, so we made a strategic plan to close that division down and move those resources over to the Service division.
- Service division has doubled in revenue, net profits are now approaching $6 million without the construction, and the gross profit margins are trending towards 40%
- Worked with the owner to develop a strategic buyout plan with his partner and continue to grow the business towards the objective of $10 million in annual revenue.
REVENUE TRENDS:
