The company was continuing to increase turnover year by year but was constantly running out of cash and the owner could not understand why.

Keith was asked to offer some guidance and advice as to the causes of this.

This was a classic case of management taking their eye off the ball, delegating responsibility without putting in safeguards to check what was going on.

Two fundamental mistakes were being made, firstly undertaking work at a loss without realizing the pricing and estimating model was way out and nobody was checking the workings being made and secondly, too much responsibility was being given without proper controls being in place.

A new director had joined the business as a result of his cash injection as a shareholder and had been allowed to get on with things without controls, leading to poor performance on jobs, cost overruns, and claw backs by clients as penalties for over running on time.

This also had the potential to damage the company’s reputation.

This person has now ceased to be a director but remains a shareholder. The mayhem he was causing has been stopped.

Keith completed a pricing revue and put a structure in place to control and monitor the pricing and estimating process, allowing responsibility but linked to accountability, with proper reports and a system that requires two people to have reviewed and authorized this process.

He also spent time changing the financial reporting and explaining to the owner and staff what the figures were telling them.

By adding the discipline of a monthly review system, management now produces a monthly report explaining what the numbers say about the business.

In this case, Keith came in when the business had a turnover of £1.5m, but only a net profit of £5k, and was experiencing cash flow difficulties, and again, could not understand why.