Marc Lindner’s roofing company had a problem some businesses would only be too happy to share. Sales had jumped 50% each year since the company started in 2014. Its workforce had grown from one to 35 employees in just a few years.
But despite the explosive growth, Kitchener, Ont.-based Black and White Commercial Roofing was having cash flow issues. Lindner had focused so heavily on sales and customers that financial management had been neglected. He was making major purchases without proper planning and didn’t have a good idea about his costs.
“We never had a budget,” Lindner says. “There wasn’t a lot of planning or preparation. When we bought capital equipment, it was always reactive.”
Lindner turned to BDC for advice on how to overhaul his financial management. A BDC expert did a thorough review of the company’s finances and future goals. Lindner and his team then sat down to work out an action plan to reach those goals.
The exercise quickly paid off. They created the company’s first annual budget and cash flow projections for the coming year and also looked carefully at costs and margins.
The process was eye-opening. For example, Lindner hadn’t realized that some customers were taking over 90 days to pay bills. That, in turn, had contributed to the company’s cash flow hiccups. Lindner started working with clients to reduce payment times.
He also finally got an understanding of his costs, which allowed him to look at ways to reduce them. He was able to find significant savings by cutting overhead and unproductive marketing efforts.
Now that we have the costs down on paper, we can plan out the longevity of equipment and new purchases.