Background:
Our client is in the Hotel & Motel industry in Townsville. The business has been established for 10 years and they had held it already for 4 years.
Issues:
Some major issues that we had identified within the business included partnership concerns, family succession planning, growing the business to maximise the sale price, and the introduction of the smoking laws which became a drawback for the gaming industry.
Process:
We met with the client on a monthly basis to implement and monitor performance standards. In these monthly meetings we provided them with an action plan of what we feel was required to be changed, implemented and improved. This included the following:
They had a silent Partner which they wanted to cease. We negotiated the removal of this Partner which resulted in a win-win process.
The Clients wanted to work less in the business. We trained and monitored a Manager who we put in the business to run the hotel so that the owners had more time for their personal life. We implemented improving staffing numbers by assessing the amount of employees they had in each service area, improved the processes, enhanced the type of food to be served to gain more clientele, re-positioned the gaming machines and assessed ways to increase their gross profit percent on alcohol and food sales. We advised on how to benefit from supplier discounts/specials, how to maximise benefits from supplier royalty & loyalty schemes. We also helped manage the refurbishment and negotiated for costs, etc as the Client was overseas.
We discussed cashflow for their retirement, as they were retiring after the sale of the business. We minimised the capital gains tax on the sale of the business and reduced their potential capital gains by $1.3 million by ensuring we maximised the advantages of the structure we had implemented with the Client.
Result:
As a result this gave the Client a 62% increase in their gross profits and the client sold the business with ease due to assistance with our negotiation phase and our extensive reports we provided on the performance on the business over a 4 year period.
If you would like us to help you improve your business so that you can achieve your business and lifestyle goals, please call us on 5413 9300.