Last month, I told you about Crystal Carpet & Flooring Company, a locally owned business that found itself struggling to survive when the real-estate bubble burst. Crystal Carpet’s story is one that many business owners can relate to and learn from. Here’s the second article in a series on how the company has turned things around. I’m happy to say that I played a part in what has proven to be a feel-good ending. - Rob Rickert
When the economy is good, even businesses with poor practices can make money.
Just ask Chad Garner, the owner and operator of Crystal Carpet & Flooring Company. In 2003 his business was booming, right along with the home building market in the Wilmington area.
“You didn’t have to practice all the basic fundamentals of good business discipline,” Garner said. “You could be doing right good in business in spite of yourself.”
“We didn’t think it was going to end.”
But of course it did. With the collapse of the housing market and the beginning of the recession, Garner found himself fighting day to day to keep the doors of his business open.
In 2011, he was referred to Rob Rickert. Rickert is a Wilmington CPA and has developed a practice focused on strategic planning, budgets and projections, and managing risk. Rickert and his staff support small businesses by serving in the role of a chief financial officer, helping develop financial strategies and planning for growth.
The staff of Rickert CPA began its work for Crystal Carpet by creating a weekly cash budget. After three months of closely tracking cash using Rickert’s spreadsheet, Garner was current in his accounts payable with all vendors. And after two years, he had managed to pay off more than $180,000 in debt.
The next project was somewhat more daunting.
Crystal Carpet had purchased a popular accounting software package but wasn't using it to its full capacity, Rickert said. For example, employees tracked down invoices from vendors and installers and performed calculations manually instead of using the software to automate those tasks. The old process was tedious, time-consuming and prone to errors.
Rickert’s team trained all of Garner’s employees to use the software properly so that the company could better track pending sales and corresponding expenses.
Within three months of using the accounting software properly, Rickert and Garner had the data they needed to start drawing conclusions about what types of products the company should be selling and what kinds of customers Crystal Carpet wanted to work with.
They also were able to see accurate revenue and expenses by job and could measure profit by customer and product.
“We were able to keep up with trends and data, and started really collecting data,” Garner said. “There’s a lot of strategy in what we were coming up with to find good values for people.”
The Rickert team also worked with Garner’s staff to educate them about what types of products the store should be carrying and what kinds of jobs were the most profitable, which led to overall increases in margins.
With accurate data to work with, the company was able to increase its bottom line.
Using the software to collect sales data also allowed Garner to hold his sales team more accountable for the cost and revenue related for each job. If the team failed to meet the company’s minimum margins, they had to explain why.
“Everybody has tightened up. We had to tighten up,” Garner said.
Now, instead of working harder and harder to keep Crystal Carpet in business, Garner says he is optimistic about his company’s future.
“Our goal is to be the best flooring company in North Carolina,” Garner said. “It feels good to make progress. We have big goals for 2014.”
Robert J. Rickert CPA, PC focuses on giving its clients timely, accurate and relevant financial information to help them make informed decisions about their businesses. The firm provides customized solutions to meet the specific needs of its clients. Services offered by the firm include CFO and controller services, crisis management, interim financial management, acquisitions and business buying, divestitures and business selling, litigation support, business tax services, and tax dispute assistance for individuals. For more information, visit rickertcpa.com, call 910-319-9127 or email [email protected].
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