Services company - Independent Business Review (IBR)A services company in the B2B space approached KSA Group to look at the growing pains it was experiencing and to possibly raise some working capital. At our initial meeting we agreed that the business had real potential, having grown from £600,000 in 2014 to over £1.5m in 2016, but it was at risk of collapse if cash flow and business structural issues were not rapidly addressed.
As normal we asked what the company’s and the directors' objectives were and what threats they faced. Survival, improving management information and funding fast growth were the key objectives. The company commissioned us to prepare an urgent independent business review. Our 30 page report included:
• looking at its insolvency, and the insolvency options,
• a detailed financial forecast and a detailed statement of financial affairs
• comparisons of outcome for creditors and investors if the business failed
• a time to pay arrangement with HMRC for over £250,000 of PAYE and VAT, over 11 months – this after HMRC stated no more time to pay.
• we highlighted issues with marketing and in particular its poor web presence
• we identified weaknesses in its bookkeeping, financial reporting production of management information
• we helped set the parameters for a business plan.
• we identified that research and development tax rebates had not been fully explored
• we identified that executive management needed strengthening and the board needed support from experienced business people
After the report was delivered, the board commissioned our growth expert George Davis to build a new high quality business plan.
We introduced Insight Associates to replace the whole accounting reporting functions.
We also introduced R&D tax experts GGTC to explore the full possibilities of tax rebates, and finally we have agreed a structure that will allow new equity and debt funding in 2016 with follow on funding of up to £500,000 to support growth to £5m of sales in 2017-18. The company has appointed a new sales director, a new marketing director and a non executive director. These are roles the company could not previously afford because of tight working capital.
The company has avoided ANY form of insolvency and we believe will not need to in the future. Our work has effectively helped to save 30 jobs and a lot of investors monies.
The company is growing fast. it has recently won a major industry accreditation that will increase enquiry flow and the business has a strategic plan with milestones to follow.