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Start-up Transformation Case Study

Client: Cutting Edge Service Company

Client Type: Start Up/Small Business, Closely-Held Business

Overview: Helped a professional sole-practitioner transform her practice into a small company poised to expand internationally in a cutting-edge technology. RDA brought in a team of specialists to help build critical infrastructure, including an accounting and information systems. RDA also introduced many business methods, including marketing, financing, staff development, legal structure, and negotiations. The company grew at an annual rate of 40% with greater net profits, and also developed a sound infrastructure that allowed the owner to transfer her attentions to the firm's growth, rather than day-to-day operations.

Services: Strategic Planning, Infrastructure Building, Implementing Corporate Policies and Positions, Marketing and Branding, Growth Planning, Managing Work/Life Balance

Challenge: The client was an established solo-practitioner whose home-based practice provided innovative high-tech therapeutic services. Her goal was to develop her practice into a firm recognized internationally as a leader in an emerging, cutting-edge technology and service industry. The firm lacked formal infrastructure and required sales and marketing strategies to grow the business and manage growth while protecting intellectual property and complying with regulatory guidelines.

RDA's Role: Richard Dana Associates was brought in to help the client develop a growth plan, and to help implement the capabilities required to support growth. Since the client was initially a one-person firm, we began with a detailed process to understand the owner's vision — both for herself and for her business — in three to six months, one year, and five years.

Based on that vision, RDA brought together a team including a medical billing specialist, an accountant and system implementer, and legal counsel to help our client to create an action plan, and to take steps that were immediately needed. A partial list of the changes implemented:

• Deployed financial and accounting systems
• Re-assessed staffing needs, costs and impact on cash flow
• Introduced new banking relationships and obtained competitive bids
• Secured needed outside vendors and professional services
• Implemented marketing strategies for the first year.

Results: Soon after the engagement commenced, the owner took on a partner, and the action plan was in place. Within eighteen months, this closely held firm successfully managed the transformation from solo practioner to a small business, well positioned for growth. In doing so, they:

• 40% annual growth with greater net profit
• Obtained new space and negotiated a favorable lease
• Hired and expanded professional and technical staff, freeing the owner to maximize personal productivity
• Created an effective marketing plan and branding strategy by positioning the practice within the medical and psychological communities; utilized a combination of advertising, media, publication, speaking engagements
• Established a Professional Corporation structure to balance the owners' personal financial and legal situation with the firm's needs
• Negotiated favorable interest rates; refinanced loans and expanded credit line

Next Steps: Richard Dana Associates continues to advise our client on an ongoing basis to help identify the ideal rate of sustainable growth that will not result in burnout for the owners. As their business progresses, we periodically help them to retool their business plan to match and incorporate the firm's growth to date with current market conditions. The owners' key objectives now are to continue to grow the firm without as much direct personal involvement — this will require adding more staff, and developing an effective, broader management team. RDA will help the client to achieve those goals and will continue to assist in the implementation of business practices to enable their continued expansion.