Building Banking Relationships in High-Growth Company

Challenge

This scaling, emerging growth company grew organically without any outside funding for it’s first five years. Over those years, company grew revenue 10-fold and began to turn a profit; yet during growth their working capital needs grew disproportionately to their expanding revenue. The management team had five-year goals that included geographic expansion, partner expansion, and acquisitive growth.  Thus, they were looking to refinance and restructure debt, while also increasing liquidity to fuel their growth.

The business owners knew they needed increased liquidity to fuel their growth. They also knew they needed assistance to build a robust and scalable foundation in accounting and HR while building a business strategy and corporate development functions. The challenge was how to do this cost effectively yet, with an elevated approach. Without deep corporate finance capability, they needed help in navigating banking relationships to restructure the capital stack.

Solution

Working with the business owners, GrowthLab focused first on building out virtual accounting capability and processes to leveraging greater technology. In parallel, GrowthLab developed a corporate finance and accounting calendar to implement cadence, expectations, and ownership.

Due to the urgency of the customer’s financing needs, the GrowthLab Team quickly developed their first Annual Operating Plan with integrated cash flow planning. The work during the first six months of the relationship focused on refinancing and restructuring their banking relationships in order to fund growth. The GrowthLab Accounting, FP&A, and CFO Teams worked hand in hand to build the accounting foundation, memorialize the company’s story, and establish the initial annual strategy documents. The GrowthLab team used these to work with the bankers to move through underwriting, credit committee, and funding within eight months.

GrowthLab leveraged all of this work to help the management team develop and adopt an annual strategic business cycle process that included AOP, Compensation structure, Shareholder reporting, and Long-range planning. As acquisition opportunities were identified, GrowthLab also assisted with screening and due diligence.

Results

After working with this company, GrowthLab was able to get their debt refinanced with favorable terms while consolidating other debtors. A year after we initiated this effort, the balance sheet is cleaner which gives the company greater financial flexibility and positions them to take advantage of new acquisitive opportunities. The new accounting system gives transparency and visibility to project planning and management. We also implemented cadance and rigor around monthly and quarterly meetings for communication. 

The Annual Strategic Planning Process has positioned the company and Executive Leadership Team to think strategically, long-term about the risks and opportunities to the business while improving on feedback loops using dashboards and metrics improving agility around execution and communication with team members. 

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice.