$146,000 BUSINESS LIABILITIES REDUCED IN JUST 6 MONTHS!
As a small business owner, you wear many hats. Keith and Tracy Brubaker know this all too well. Their leather business started nearly 20 years ago from selling on weekends, to selling out of their garage, to having a brick and mortar store and online store. They expanded from a few hides to all types of leather, leather tools, leather dyes, conchos, lacing, patterns and more.
Tracy was in charge of accounting but was quickly becoming overwhelmed. She remembered a friend and fellow small business owner once told her, “Hire an accountant. It’s well worth the investment.”
“I’m great at data entry, but I’m not an accountant,” said Tracy. Tracy connected with Fulling Management and Accounting through the EntreLeadership Facebook page. She reached out to Rusty Fulling to ask for more information, and The Leather Guy soon signed on as a client.
Initially, Fulling worked with Tracy on financial cleanup. Each month going forward, Fulling met with Keith and Tracy to review the prior month financials and updated cash flow projections for the year. By providing accurate financial data in a timely manner, Tracy was more confident in her role and had time to work on the business.
“Part of our monthly management meeting includes reviewing budget-to-actual variances and why those variances occurred,” said Heather McCoskey, Fulling account manager. “Keith and Tracy have done a great job using the budget to manage their business and make sound business decisions.”
Fulling discovered a lot of the company’s cash was tied up in inventory. They had more inventory on hand than they needed based on how often they were turning inventory. To help The Leather Guy improve inventory management, Fulling created an open-to-buy budget. Even with a 28 percent increase in sales, The Leather Guy was able to reduce their inventory by 20 percent due to better inventory management.
“Fulling is there to guide us and make suggestions, but the choices are still our own,” said Tracy. “Just having a person to call or email and get advice from is a huge relief.”
The Leather Guy was also able to reduce their liabilities by $146,000 within the first six months of working with Fulling due to increase in cash flow. Carrying costs also decreased by $90,000 from 2015 to 2016.
“It was a drastic improvement that allowed us to allocate more money to paying off debt,” added Tracy. As a result, The Leather Guy was able to improve their asset-to-liability ratio from 1.44 to 2.15 and expect to have a majority of their long-term debt paid off by the end of the year. “I might not have ever gotten there on my own without Fulling,” added Tracy. “We’ve been in business for 20 years, and I’ve been dragging my feet for 19.”
Keith and Tracy are dedicated to their business and have a passion for what they do. With systems in place, The Leather Guy is now positioned for future sales growth. As they grow, they will have the financial infrastructure in place to support them. The Leather Guy and Fulling Management and Accounting continue to work together to make financial progress.