A sales director keeps his family’s metal fabrication business from joining a growing list of such businesses for sale in Australia. Here’s how the great turnaround happened.
Client: Anonymous
Overview
Fabrication and engineering firms face tremendous pressure from cheaper imports and tech-driven changes. Despite keeping nearly 80-hour work weeks, this sales director and his team couldn’t make the revenue needle move faster. It was a high-risk, low-reward position the business was in but he had the good sense to ask for help before it got too late.
Initial Presentation
In Summary: Although his official job was sales director, as the founder’s son our client wanted to do more to protect the business. He knew he had to explore ways to diversify the projects they were capable of handling and to get clients from more sectors. He had to help his father find ways to make the nearly 20-year-old business run more efficiently but most weeks was too exhausted or simply didn’t have the time to do so.
Initial Analysis
Spending more time on prospecting and nurturing leads didn’t yield the additional sales the business needed badly, which only demoralised him and his sales team.
It’s one thing to sell a business because you can afford to retire in comfort or want to devote your time to growing other ventures. But it’s a far more painful thing to have to consider selling a business, especially one so closely tied to your family history, because running it no longer seems to make sense.
- Revenue: $650,000
- Profit: $44,000
- Hours invested in business per week: 75+
Prescribed Intervention
Phase 1 - Days 0 to 30 - Setting Priorities
Our client was right about needing to diversify. Nearly three decades of steady growth in the overall economy and a construction boom in recent years have kept Australia’s metal fabrication sector going but most businesses have not grown as fast as they did pre-GFC. It also became clear, upon the full diagnostic, that hardly anything new had been done in the business in terms of improving sales and marketing in the last five years, and addressing that was one of our priorities.
Phase 2 - Days 31 to 90 - Starting
We installed a sales process that was designed to match this particular business’ conditions and needs. Although the nearly 3,500 metal fabrication firms in Australia face similar challenges, they obviously should not address these in the same way. (But most do!) Bespoke solutions are the smart option, and with the right coach these need not require a large fee upfront. We also walked the team through the process of rethinking their KPIs, providing for sustained coaching, and identifying the lead measures that would drive their performance best.
By arranging for overdue support in sales, our client freed himself to devote time and willpower to strategic thinking, in particular exploring what investments were necessary so they could make a greater variety of products. This bespoke sales process not only gave the business the ability to win new leads and customers but to book more repeat orders as well from their existing customers, whose needs were changing rapidly.
Phase 3 - Days 91 to 180 - Gaining Momentum
Many SMEs are hobbled by what their owners perceive to be the lack of capacity for R&D and innovation. Yet in some cases, they simply need to change their focus. In this case, this meant that our client had to rethink his role from one of sales leadership to that of business development. The openness and humility to ask for help where they need it — in this case, more effective sales leadership from an independent sales director — may be what will keep some businesses from going under. There was no urgent need to add to the business’ five full-time employees but they had to commit to the sales training needed to unleash better outcomes, while their business development director committed to work on his mindset and executive reasoning.
Phase 4 - Days 181 to 365 - Positioning for Growth
After nearly 20 years in operation, the business applied for the first time for a grant that, once approved, will help it build the capability to fabricate not just a few product segments but to shift product lines to areas with greater demand. They’re working on being able to produce inputs not only for the construction market, where they had mostly focused, but for the manufacturing sector as well.
Their project pipeline is fuller now than it was before their year with Keystone began, thanks to a stronger culture of growth in the sales team and the entire business. And by being less directly involved in sales, our client could finally do the things that would strengthen the business’ position, such as sourcing more affordable components and learning about tech changes that would boost accuracy and lead times.
Outcome
This was not an easy case. For one, it required a top-level change in how the business operated. But the emerging rewards, which include our client’s having more time to spend with his family and less anxiety about the business’ prospects, are worth it. A business’ survival and success are pointless if these are won at the cost of family relationships.
Whilst he is no longer involved in day-to-day sales operations, our client now has a better-designed dashboard that gives him a quick and up-to-date view of the business’ overall financial position. He is also prepared to take on increasing oversight and control over the business, rather than considering its sale.
- Revenue: $890,000
- Profit: $124,600
- Hours invested in business per week: 50+
