TCII :: Management Consultants
Building Profitable Business
A successful IPO on AIM raising £3M before the existing cash resources expired, underpinning the growth phase of the company’s business.
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Early Stage business restructure and turnaround leading to an AIM listing
Our client ran an early stage internet-based business. At the time we were retained it had been operating with limited success. Revenues were modest, the monthly cash burn imposing and cash was rapidly running out. The company had attempted to raise additional finance but without success.
Our Challenge
To restructure the business to stretch its limited cash resources as long as possible, and to position the company so it would be able to raise finance to fund its growth phase.
What we did
The immediate issue was preservation of cash. A detailed cost review was undertaken. This identified duplication and inefficiency among the team, disjointed and poor execution, and a lack of cohesive, effective supplier relationships.
The management and team were restructured to eliminate duplication and bring greater focus to business execution. Competitive buying practices were also introduced. This resulted in significant savings and the available cash resources being stretched a further 4 months, thus providing management with much needed breathing space.
We then turned our attention to positioning the company for the next funding round. In doing so it became evident that the existing business plan, and the underlying business model the company had adopted, were unworkable and that financing the business would be virtually impossible.
Management accepted that contention and commissioned us to completely re-structure the underlying Business Model and write a new Business Plan.
This resulted in additional complementary business units being proposed to leverage the existing business operations, introducing a vertically integrated business model with a 360° business perspective (well before they became popular). This not only created the potential for multiple revenue streams, but also introduced the notion of recurring revenue streams, which, in turn, resulted in greater enhanced value and, potentially, a higher multiple on exit.
These initiatives were adopted by management and we were then commissioned to execute those proposals and integrate the new business units into the existing business.
The Outcome
A successful IPO on AIM raising £3M before the existing cash resources expired, underpinning the growth phase of the company’s business.
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