How To Increase Profitability of a Business

Capstone Business Performance Improvement

How To Increase Profitability of a Business: Techniques for rapidly enhancing performance and long-term value creation.

Whether you are an owner, an executive, an investor, or an advisor, learning how to increase profitability of a business is an ongoing endeavor, but at certain moments in your company’s life cycle, it can be critically important to rapidly increase value. At those critical junctures, larger middle market corporations typically hire financial advisory firms that specialize in providing professional performance improvement services.

When to Consider Professional Performance Improvement Services

Mid-to-large-sized companies who seek out a professional consultant or financial advisory firm for help with improving performance, often do so preceding one of the following events:

  • Prior to an exit or sale of your company
  • Prior to an acquisition or merger
  • Corporate turnarounds
  • Changing environment and/or competitive landscape

AMP© Rapid Value Creation – A Proven Process to Increase Profitability

At Capstone Partners, our Financial Advisory Services team provides expert performance improvement services utilizing the AMP© Rapid Value Creation program –  a proven process developed to quickly improve an organization’s performance, profitability, and value. This process brings a practical, well-defined approach backed by quantifiable metrics. Utilizing AMP© our Financial Advisory Services Team will identify near‐term opportunities, develop improvement initiatives, analyze the potential impact of performance improvement plans, and implement management practices to support durable value.

Three Steps to Improving Value with AMP©

Step One:  Assess

Through close and quick examination of the financial function, operational performance, and business plans, we will provide an objective assessment of the causes of underperformance.

  • Review short-term cash flow projection
  • Review working capital
  • Evaluate business plan and financial projections
  • Analyze credit statistics and evaluate debt service capabilities
  • Evaluate collateral and all other assets
  • Identify the reasons for underperformance

Step Two:  Model

Based on the results of the assessment, and comprehensive financial analytics, we will model a program of initiatives designed to rapidly enhance performance and build positive momentum for longer‐term value creation.

  • Identify initiatives to address the identified reasons for underperformance
  • Evaluate and model the potential impact of performance improvement initiatives
  • Evaluate appropriate strategic alternatives and model their potential impact

Step Three: Plan

Our team will develop a straightforward action plan for implementing the improvement program, involving key members of the management team, and a system for periodic re‐assessment. Transfer knowledge and skills developed through the process so that management continues to create durable value.

  • Develop discrete implementation plans for each performance improvement initiative
  • Develop metrics for monitoring the progress of the selected program of initiatives
  • Prepare a financial model of the performance improvement program for periodic reporting

As Forbes tells us in this article, increasing profitability is important for companies at all stages.  However, when it comes to planning for your business’s major transitions seeking out the advice of experts, such as the Financial Advisory Team at Capstone Partners, can significantly and rapidly increase value.

 

 

Contact Us

If you’re an owner, investor, or creditor seeking to improve your company’s performance, contact us today to start a conversation and see how we can help.