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Registered Training Organisation

An existing training organisation with offices in each Australian capital city. The business was experiencing significant cashflow issues, with some training centres consistently underperforming to their targets.

We immediately saw tremendous value in the business; however, early investigation identified the owner had other underperforming assets and investment activity, which combined with a cross pollination structure placing enormous strain on the core business.

As with all our work, we began with a deep dive into the numbers, the people, the culture, addressable market, unique attributes, gap analysis, and identification of opportunities. To do that, we also had to ensure there was internal support for change at senior management level.

Whilst always challenging, the early steps are critical to future strategy and pathways. Walking into an existing business, interviewing management, asking direct questions, exposing of inconsistent numbers of ‘actual v forecasts’, and narratives between key personnel means all parties must have buy in and take ownership of the review and assess process.

It was evident the lack of structure between the different assets and operating companies had failed to enable a clear separation of accountabilities and performance. This was also evident within the internal management process and the acceptance for parties to operate outside of the organisation structure. Immediate action was taken to address these issues and create a more transparent accountability process with a united team culture.

The adoption of new processes and consideration of divesting itself of external assets interfering with the business with consideration of immediate preparation to raise capital and/or a joint venture partial sale was a critical consideration.

This was part of the overall works to achieve an initial financially sound basis to enable a more robust operational and growth strategy to be structured and managed. The separation of the businesses into their own pillars of accountability then also enabled each to be prepared as ‘investment ready’, which enabled the structure of any further investment to be assessed as to whether it be organic internally, joint venture or external capital.

Working closely with the owner, and CFO initially, the internal works included detailed analysis of budgets, monthly P&L’s, balance sheet, forecast student numbers and operational overheads. This involved each State being assessed individually with a central administration cost and subsequent development of strategies and roadmaps for each.

In support of this, an internal business valuation process was developed with the provision of a final valuation report. To achieve this, we performed a risk assessment of the business and identified several areas likely to be non-compliant if not addressed as a priority. We sourced a national group interested in the joint venture and facilitated and managed those negotiations. At the same time, we also met with the tier 1 and tier 2 financiers to keep them abreast of the work, the current position of the company, and where it was headed.

A successful outcome was achieved over an 18-month period with the business trading into profitability, reducing debt and being compliant with both its financiers’ terms and operational requirements. The work required for investment readiness enabled the business to expand its unique value proposition and prosper going forward.

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