Case Study - What's the Goal?

Previous: Case Study Overview

Next: The Discovery Process

The first step in the CFO As You Grow program is to establish some background. It is critical that we understand your vision, your company's mission, and the goals you have set for the business. We also need some basic understanding of its operational characteristics in the areas of Sales and Marketing, Operations, Management/Personnel, and Finance.

Typically, we will have an initial meeting with the owners, discussing some top-line information, laying out the steps of the program, identifying the key members who will participate in the CFO As You Grow program, and scheduling time for the planning sessions. The information below was gathered during two half-day planning sessions.

Here is the story for the Rickenbacher's and Medi-Bill:

Medi-Bill Service

Medi-Bill is a medical billing service owned and operated by Marcy and Barry Rickenbacher. It was started 5 years ago as a "second" career when the principals both retired early from other careers. Both the owners are active in the business. Barry handles all the financial and administrative duties while Marcy oversees sales and operation. They service physicians and other medical professionals in their community. They have 7 employees (full time equivalent). Barry estimates they are operating at about 70% capacity.

Sales were close to $900K in the past year servicing around 22 accounts with a Net Profit of $73K showing on the owner's Schedule C. Some of their accounts average around $50,000 per year while others generate as little as $2,000 per year.

The owners have not been aggressive in their marketing and sales to this point. Most of their business has come by referral based on their excellent reputation for thoroughness. However, Marcy and Barry are interested in building up the company to a salable level over the next five years in preparation for their ultimate retirement. They operate their business in an upscale suburban community with an aging population. Their current market share represents a very small percentage of total opportunity available.

They are concerned about the shrinking number of small practitioners, for whom their service is so well-suited. They are looking for ways to solidify the relationships they have as well as develop relationships with larger group practices. They are looking for direction on how to proceed in this area.

They pride themselves on taking care of all the details for the doctors. Medi-bill handles every aspect of billing and collections for the practitioner as well as facilitating the submission of claims on behalf of the patient. They have many "raving fans" in the community.

Marcy and Barry also love to travel. Their goal is to develop a monitoring system to keep an eye on the business from anywhere in the world. In other words, to make the business less dependent on them and therefore more salable.

Summary Points:

Medical billing service targeted at small-to-medium-size medical practices/groups
Owned by Marcy and Barry Rickenbacher
Goal to build the business to sell in five years
$900,000 in sales with $73,000 in net profit on Schedule C
7 employees
Currently 22 accounts ranging from $2,000 - $50,000 per year in billings
Little or no marketing done - growth has come from Raving Fan Referrals
Demographics for growth are good
Medical profession is somewhat unstable at this time

Over a period of 12 months, the CFO As You Grow program will give the owners and managers of Medi-Bill insights into their business that they have never had before. They will start running their business using a business dashboard tailored to Medi-Bill, focused on those key activities which are critical to achieving the goals they have set.

Previous: Case Study Overview

Next: The Discovery Process