When growth on paper hides a cash-flow crisis.
(The operational lens Case Study: how invisible habits block profit and valuation.)
The managing partner of a large professional services firm with 8 shareholders came to us mystified. The company was growing, but only on paper.
Billable staff worked harder than ever — yet there was no cash for bonuses or to buy out retiring partners.
We discovered invoices were taking 45 days to send. Accounting was blamed.
But the real problem? Culture.
Billable staff saw invoicing as beneath them — a badge of honour to be “too busy” to handle paperwork. Accounting chased details for weeks.
No one talked about the business of running the business — only about their projects.
Once we taught the team financial literacy and made the impact visible, everything changed.
Profit rose from 0% to 12% EBITDA. Re-focusing the value proposition plus many other steps gave them pricing power in the highly competitive market.
Valuation grew from $7M on paper to an $18M offer with 18 months of our engagement
Hidden thinking habits drain value for current shareholders which is why so many private companies never find buyers never mind have enough cash to buy out aging partners.
If growth feels like it’s not hitting the bank account, it’s rarely the market, though that story is often used as the ‘excuse’ that defeats alignment to actions that move the needle.
It’s the way the culture talks — or doesn’t — about performance. We hear it. We teach you so you can too.
