Business Improvement

Business improvement is the ability to extract the optimal potential of an active business and to bring it to peak profitability and effectiveness. Business improvement enables to manage the business in its new state continually, without external assistant, over a long period of time.

KCR’s concept of business improvement is based on three main aspects: business and economy, structure and operation, and financing and funding. Our improvement squad performs in-depth analysis and closely tracks these three aspects using three main stages: business and economy diagnosis, formulating an improvement and streamlining plan, and finally – ongoing business support to implement the improvement plan. At the end of the support process the company managers are handed back control.

The business economy aspect refers to all economic data of the company, including: the asset composition, the economic value and accounting value, the state of liquidity, the budget, cash flow management, locating and minimizing actions resulting in loss, locating unrealized potential actions and improving them, analyzing activities according to varied business dimensions, up to the individual product or service (activity sectors, market segments, geographic distribution etc.), analyzing debts and liabilities as well as diagnosing the financial needs.

The structure operational aspect includes the company’s legal structure – the holdings structure, transactions with related parties, and prices of transfer; the ownership and management structure – transactions of interested parties, dividend policy, quality of management and the nature of relations between the owners; the company’s structured organization, its information systems and reliability of reports, process of inter-organization improvement and streamlining processes, conduct with suppliers and clients, inventory management method, manpower structure and from a wider point of view – analysis of needs and understanding the market in which the company operates.

The financial and funding aspect includes the following data: debt and capital structure, repayment power and meeting financial stipulations, streamlining and reducing financing and credit expenses for the company, as well as negotiating with the banking system, clients and suppliers, creating trust with financial institutions, credit management and fundraising.

Business improvement is a long process which involves business focus, continuous measuring and determining KPIs, changing habits, creating appropriate organizational culture and changing and improving work process is in all organizational department and layers. Business improvement can be done by changing the structure of activity, changing the business mix, changing the product mix, developing products or developing a market, merging and acquiring and creating strategic partnerships. In each improvement project we ensure to examine each company individually and to adapt the improvement process for it according to its state and to the goals defined by the management and the board of directors. Despite this, it is possible to state a number of stages which constitute a theoretical basis for the required method of action for an effective improvement process.

First stage: business diagnosis and extended financial review

At this stage, the KCR improvement team prepares an extended financial review which includes one or more of the sections described here. The review is meant to clarify the company’s existing state precisely in order to locate the improvement drivers:

• Operational profit and loss statement for the previous fiscal year and the current year – at a monthly detail level and divided into activity sectors and the company’s profit centers.
• Analysis of the company’s financial state based on the audited reports of recent years, and based on the ongoing report and estimate for the current activity year.
• Detailed analysis of the relations with the banking and off banking system, including the structure of credit limits and their composition; the features of short-term and long-term loans; the structure of guarantees; the reasonableness of prices and commissions of the banking services; the state of stipulations and securities; liquidity relations; profitability relations; capital structure and such.
• Preparation of cash flow for the next activity year, in a way which will enable the company’s continued activity as a solvent company and will also guarantee support of the improvement plan.

Second stage: formulating the improvement plan

Based on the comprehensive situation report, the KCR improvement team formulates an improvement and streamlining plan for the current and subsequent work years. The improvement plan handles all company’s activity interfaces:

• Handling faults thoroughly, if any were located; handling loss factors which cause concealed or exposed wear of the company’s operational profit.
• Saving and streamlining sections in all of the company’s activity components in order to improve operational efficiency and return on investment (ROI) for current resources, creating a new stable situation for ongoing management.
• Recommendations for taking advantage of opportunities for renewal and growth.
• Recommendations and prioritizing structural changes for long term streamlining at the financial and banking level.

Third stage: ongoing business support

At this stage, the KCR improvement team accompanies the actual realization of the submitted improvement plan, in complete and tight cooperation with the companies management:

• Participating in management meetings and providing close support to the members of management in realizing the improvement plan.
• Preparing managerial and operational reports to improve the ability to control business results. For example – meeting sales goals, budget control and meeting cash flow goals.
• Setting sales goals based on the company’s activity sectors and controlling the achievement of said goals.
• Creating a budget based on the improvement goals for the different activities and formulating control mechanisms regarding procurement processes, in order to prevent budget deviations.
• Continuous obligo tracking as well as ongoing support to the company vis-a-vis the banking system during the improvement term while providing ongoing maintenance and reinforcing the trust in the banking system by the company management and its owners.

If you are interested in changing the state of the business, to grow and to change the rate of growth, or if you feel a sort of “business stagnation”, random or permanent difficulties, “trudging” in place – business improvement unequivocally results in a turnover of business results.

For this purpose, it is required to perform wide and in depth work and research by a team of experts – which we provide.

Following are several reasons why you should hire KCR’s improvement team:

1. Real business improvement requires comprehensive interdisciplinary observation, and not specific analysis. Your business is not just one department or another (sales, production, accounting, customer service etc.). Each business is a complex array and it should be analyzed and diagnosed with a wide observation.
2. Business improvement begins from the current state and is not based on increasing the company’s sales. We focus on improving the operational and financial infrastructure of your business.
3. At KCR we implement the improvement plan we offer with full cooperation with you. We are committed to the success of the process – our consideration is derived from improving your business results.