Overview
This facilities maintenance company, generating $70M in revenue with 2,000 employees and 11 national retail customers, pursued aggressive revenue growth by expanding contracts with large, dispersed retailers. While top-line revenue soared, the company’s leadership team was alarmed by rapidly declining profit margins, cash flow issues, and customer dissatisfaction.
Business Goals
- Improve profit margins and cash flow to stabilize operations.
- Align service offerings with cost structures to ensure customer profitability.
- Build operational processes that scale efficiently with revenue growth.
Key Results at a Glance (Powered by Profit Inc.)
- 27% of Customers: Identified as unprofitable, costing the company $2.5M in profits annually.
- $12.4M in Lost Value: Resulting from uncontrolled costs and poorly managed expansion.
- 64% Decline in Company Value: Caused by service-level inefficiencies and poor cost allocation.
Original State
- Growth Without Planning: Expansion was executed without a financially informed plan, leading to increased service-level costs and inefficiencies.
- Cash Flow Challenges: Onerous payment terms from large customers created gaps that the company’s credit line could not bridge.
- High Turnover and Personnel Costs: Poor onboarding, inadequate training, and operational inefficiencies resulted in escalating labor costs and declining service quality.
- Unaccountable Management Layers: Overhead costs increased due to ineffective leadership, further straining resources and eroding service quality.


Post-Engagement Success
- Disciplined Pricing Strategy: Implemented a detailed pricing configurator to ensure all direct costs were accounted for, improving customer profitability.
- Operational Restructuring: Streamlined leadership by removing redundant management layers, promoting the best field leaders, and replacing the CFO to ensure financial alignment.
- Cultural Transformation: Launched a “Company Way” campaign to standardize service delivery, improve accountability, and enhance employee retention.
- Cash Flow Optimization: Renegotiated customer payment terms and credit line agreements to stabilize cash flow.
Outcome: The company rapidly improved profitability, margins, and cash flow, achieving a debt-free status while rebuilding its operational foundation for future growth.
Key Takeaway
A company must clearly understand its costs before expanding revenue. Misaligned cost structures and service-level inefficiencies can destroy profitability and long-term value.
The Profit Optimization Program
Program Details:
Phase 1: Analysis
- Identified that 27% of customers were unprofitable, costing $2.5M annually.
- Uncovered $12.4M in lost value due to inefficient operations and poor cost management.
- Highlighted cultural gaps and leadership inefficiencies contributing to service-level failures.
Phase 2: Implementation
- Designed and implemented a pricing strategy that reflected true costs.
- Streamlined operations through leadership realignment and standardized workflows.
- Improved cash flow by renegotiating payment terms and optimizing credit usage.
- Developed a cultural shift to prioritize accountability and service excellence.
Process Highlights:
- Allocated direct costs accurately to reveal true customer profitability.
- Developed operational frameworks to reduce inefficiencies and align service levels with profit goals.
- Introduced leadership training and cultural campaigns to embed sustainable practices.
Discover how profit optimization can transform your operations and drive sustainable growth.
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