Growth strategy
Revenue is up 40%. The overdraft is up 90%.
Profitable growth can drain cash faster than it generates it, and the arithmetic behind why is simpler, and more useful, than most owners expect.
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Operations
The stock turns four times a year. The catalogue has 1,400 lines.
A blended stock turn is an average of two very different businesses, and the one quietly consuming the cash is…
Operations
The deposit is 20%. The materials are 60% of cost.
Collections work on the tail of the cash cycle. The hole is dug in the first fortnight of the job,…
Operations
Three quotes are required. The incumbent writes the spec.
A tender with three bids can still be a single-source purchase in disguise, and the tell is not in the…
Leadership
The approval limit is £5,000. It was set when the average job was £3,000.
Approval thresholds are usually calibrated once and then left to drift, until the founder becomes the slowest step in the…
Technology
The system went live in April. Half the team still runs the spreadsheet.
Six months after go-live, the workbook on the shared drive is still the version people trust. That is information about…
Growth strategy
Churn is 8%. Half of it happens in the first ninety days.
An annual churn rate averages together two completely different populations, and only one of them is a retention problem at…
Pricing
The retainer was scoped at eight hours. It’s running at fourteen.
Scope drift is the only form of price erosion that never shows up in the price, which is exactly why…
Pricing
Three tiers were designed. Almost everyone buys the cheapest.
A tiered price list is a theory about who your customers are. When the mix collapses into the bottom tier,…
Growth strategy
The payback period is fourteen months. The overdraft is reviewed annually.
A business can acquire customers profitably, hold a healthy LTV to CAC ratio, and still run out of cash. The…
Take it further
This is the general pattern. Your business is the specific case.
Everything here is free to read with an account, and always will be. What it cannot do is tell you which of these applies to your numbers, your market and your constraints. That is the work we do with clients.