This week I’m writing about using a Break Even Plan. A Break Even Plan will stop the bleeding of your cash by temporarily cutting all non-critical expenses while driving sales above break-even by selling existing inventory. I have been writing about some of my hero clients and how we are able to achieve significant results from our work together. We have 21 Silver Bullets, which are areas within your business that when we improve your performance, your business will run better.
The Situation in Charlie’s Business
Our business hero this week is Charlie, owner of a bus sales and service company. I began working with Charlie and his parents when their sales were stagnant. At that point, their business had been losing an average of $40,000 per year. We implemented several of our Silver Bullets. These included a Strategic Plan, Team Meeting Rhythm, Sales Management System, Key Performance Indicators and most importantly in the near term, a Break Even Plan.
Additional Actions to Grow Charlie’s Profits
After reviewing their financials, we determined that we needed to reduce their fixed costs and grow their revenues. Their billable hours compared to their shop employee hours was too low. So, we reduced the number of shop employees. We also eliminated some extra outsourced services such as vehicle detailing. We set a goal of selling one bus a week. Billable hours and bus sales per week became two of our Key Performance Indicators. We began meeting weekly to review performance and remove obstacles.
The sales and profit growth were dramatic with our Break Even Plan. Here’s what Charlie said:
“You have really taken the blinders off our eyes to see the potential of our business and now you are taking us there. We are thrilled that you achieved growth from $651,000 to $1,100,000 and a profit increase in excess of $181,000 since we started working with you in January.”
Congratulations Charlie on your impressive growth of your sales and profits using a break even plan. You are a true business hero and an inspiration to us! You can view another case study about using an Employee Acquisition Plan in an auto repair business here.