Financial Health Case Study: From Chaos to Clarity in Cash Flow and Control
Size: $6.8M Revenue
Industry: Service
Problem: Despite generating millions in annual revenue, the company was losing $500K a year and experiencing a severe cash crunch. There was no system to track KPIs, no profitability strategy, and poor visibility into what was working. Leadership lacked financial literacy, working capital was tied up, and the business was being propped up by personal capital and debt.
Solution: We implemented a financial operating system—introducing KPI tracking (Revenue per Hour), optimizing cost structure, and aligning team targets with strategy. We streamlined processes, improved capital efficiency, upgraded equipment, and freed up trapped cash by introducing better SOPs, client terms, and inventory management.
Results:
- Revenue per Hour up 138.7% (from $70/hr to $150/hr)
- Gross Profit +$1.6M annually
- EBITDA from -$500K to +$1.3M
- Free Cash Flow from -$1.9M to +$0.8M
- Working Capital reduced from 21% to <5%
Growth Looked Good From the Outside — But It Wasn’t Sustainable
This company had reached about $6.8M in annual revenue — and then plateaued.
On the surface, things looked fine. But inside the business, stress was rising. There was no system to monitor profitability, no strategy tied to the numbers, and no clarity around what to fix.
Growth was creating more chaos — not more wealth.
Unlocking Productivity with the Right Metrics
One of the first things we did was help the business track productivity the right way — using a KPI called Revenue per Hour. This required us to restructure the org chart, redefine roles, set clear success measures, and build accountability.
Over time, throughput doubled — from around $70/hour to over $150/hour — giving the business a true picture of team performance and profitability.
Gross profit grew from $986K to over $2.5M per year, unlocking margin that had been buried in inefficiency.
As the team improved its systems, skills, and tools, gross profit began to climb.
We simplified the process, introduced smarter equipment, and removed bottlenecks that were dragging down margin.
-$500K to Profitability and Beyond
When we started, they were losing about $500K a year. But once we helped the owner align the team, set targets, and focus on what matters, things began to turn.
It didn’t happen overnight. But over the next 12–24 months, the business moved from breakeven to profitability — and once the systems were in place, profit skyrocketed.
We tell clients upfront: this takes commitment. The results are worth it, but it takes time to build the engine
Turning the Tide on Cash
Growth had created a cash crunch. At one point, the business was down $1.8M in trailing 12-month free cash flow.
When we stepped in, they were already -$900K in the red.
By improving capital efficiency, managing expenses, and boosting profitability, we helped them reverse the trend and ultimately achieve + $800K in free cash flow.
This is the money you keep. And it’s how companies build real wealth.
At its worst, 21% of the company’s revenue was trapped in working capital — things like A/R, inventory, and slow collection cycles.
We immediately introduced checklists, new SOPs, better client terms, and just-in-time inventory systems.
That number dropped below 5% — a massive improvement that freed up hundreds of thousands in working capital and made cash flow more predictable.
This Turnaround Didn’t Happen by Luck
It happened because of clarity, strategy, and the right systems.
Everything changed once this owner stopped flying blind.
When he got clear on his numbers, identified the right initiatives, and had a strategy to execute — the business turned around.
And yours can too.
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