Improving Processes During a Family Ownership Transition
The Client
A 2nd generation family business based in Chicago. This software company has been operating for over 25 years, working with various types of government clientele.
The Challenge
Although the mother and father of the family had founded the company and three sons were involved, many of the primary decisions on how to run the business were still made by the parents.
However, that dynamic was about to shift in a gigantic way when the parents decided to retire and gave all three sons greater ownership responsibilities.
During this transition, it became apparent that the sons would need certain pieces of essential data to make more informed decisions as owners. The problem? Until this point, many decisions were made based on a feeling for what the business needed rather than real analytics.
How would we arrive at the best information for decision-making? How much of this data would be the kind that the sons would even want to know and find useful to their operations?
Our Recommendation
To better quantify costs and time, Bronswick Benjamin advised the company to upgrade their time and billing system, so that they would have a greater understanding of how costs were being allocated to each software project.
Knowing the new generation of owners needed more practical information rather than purely seeing what was in the bank account, we converted the business’ bookkeeping to run more on a basis of GAAP (generally accepted accounting principles) versus traditional cash.
The Results
Through a stronger time and billing system, the next generation of ownership could quickly see how much is billed to each client, how much revenue is being generated on each job, if certain lines of business are more profitable than others and where the next potential product opportunities lie. For the first time, they understood the true state of their business today in outstanding detail.
With greater structure in place to stimulate profitability and improve efficiency, our client can operate at a high level because Bronswick Benjamin has taken their financial processes to the next level.
