All managers at some point face challenging questions that they don’t have the resources to answer effectively.

Hiring a new employee or learning the needed skills may not be an option due to limited funds or time.

Brightleaf Consulting Group can provide individuals with years of professional experience in a range of industries to help answer questions and overcome challenges.

Case Study 1 – Answers and advice about Raising Capital

The Situation:

Tracey Hawkins, the mother of two children on the autism spectrum, had the idea for an app that would leverage technology to help children learn behaviors to manage and regulate their condition. Autism spectrum disorder (ASD) presents challenges with social interaction, speech and nonverbal communication, and restricted or repetitive behaviors that create some issues in daily life; however, techniques have been developed to learn behaviors that decrease these issues. Because of her direct experience as a parent as well as involvement in ASD groups with other parents, she realized that such a tool would be helpful for other parents and their children.

As she was not a programmer, she had to hire a developer to build the tool. Launching it would also require hiring publicists and marketing services. Tracey decided to formalize her idea as a company and formed Thriving On The Spectrum, LLC. She soon realized that running a company requires a lot of time and work… and money. Though she was able to pay for many expenses out of pocket and from her crowdfunding campaign, it became clear that the expense of starting and running a company would soon exceed what she had available.

An individual who believed in Tracey and her idea offered to invest in her company. She read and spoke to several people about taking on an investor, but wasn’t sure what percentage of ownership she should give an investor. She was also curious about the potential size of her market and how much of the market she might be able to capture.

The Need:

Tracey needed assistance in determining how much her company was worth and in answering specific questions about taking on investment. She also needed to identify what options she had, the ramifications of these options, and which made the most sense.

She spoke with her attorney who, while able to help with many specifics once decisions were made, referred her to Brightleaf Consulting Group for help with getting a valuation and clarity around the possible options.

The Solution:

Tracey was connected with Brightleaf and explained that she needed a valuation for her company to determine how much ownership to offer for a pending investment. After a conversation about the potential investment situation, Brightleaf explained that a formal valuation would be expensive and may result in her surrendering more of the company than other investment options.

Among the options that Brightleaf suggested was using a “convertible note”, something Tracey had heard of, but didn’t fully understand. This would allow her company to accept money from an investor as debt that would later convert to equity if not paid back in a certain time period. What was most attractive about this option was that it would postpone both the expensive formal valuation and the decision of the equity percentage going to the investor. This investment vehicle also provided some protection to the investor such as setting terms around repayment or getting discounts on the conversion to equity.

After explaining in more detail how convertible notes worked, Brightleaf worked with Tracey to better understand her plan for the company and estimate expenses for the next year or so. This information was then used to craft the initial terms and to create a draft of the convertible note. Brightleaf also shared the ranges to allow the terms to still be useful to Thriving On The Spectrum and attractive to the investor. Finally, Brightleaf gave suggestions on how to negotiate the final terms.

The Outcome:

Tracey shared the convertible note as drafted with the investor and used the information she’d learned to come to a final agreement with the investor. They both agreed on terms and finalized the agreement. Tracey used the new funding to help with application development and other costs. Also, due to her own outreach and public activities successfully attracting attention to the issues faced by those with ASD as well as to Thriving On The Spectrum, the allocations for marketing were less than expected and allowed more funds to go towards developing the application.

Case Study 2 – Determining The Best Avenues For Growth

The Situation:

The client, a trucking company owner who also performed dispatching and driving duties, was performing well relative to his competition by providing reliable service to many satisfied and loyal customers.  He was interested in expanding his operations and, to determine how to grow, asked his customers how he could better meet their needs.  One customer wanted to reduce trucking suppliers and shift more of their needs to the client, which meant that the client could expand by increasing his trucking fleet.  Another customer expressed an interest in warehousing services to refine their distribution.  The warehousing option was of interest to the client because it would also provide a central area for a mechanic to service the trucks, a necessity if the fleet size were to increase.

The Need:

The client needed to evaluate the expansion options such as leasing, purchasing, or building warehouse space; hiring a full time dispatcher; contracting third party mechanic labor; initiating freight brokerage services; and adding trucks to the fleet to satisfy increased demand for services.  To establish a business case required an analysis of the possible outcomes that would develop a clearer understanding of the key decisions and their effect on the expected profitability.  The optimal timing of implementing these options also needed to be determined.

The Solution:

After first interviewing the client to deeply understand his situation and to accurately determine his needs, Brightleaf Consulting Group (“Brightleaf”) researched the trucking and logistics industry using market reports, company profiles, financial results, and trade journals.  This was followed by interviews with the client’s existing customers, regional warehouse operators, and local real estate professionals.  Several rounds of financial simulations involving a wide range of financial and operational variables were then performed.  The analysis determined that, despite a surplus of inexpensive facilities and very attractive mortgage and lease rates, the warehousing option would not be profitable due to the desired scale of investment, current economic conditions, and the client’s customer mix of products.  Instead, it was recommended to continue gathering market data from drivers, brokers, and customers while a custom tool was provided to analyze the data collected that would show the client when starting a warehousing operation would be profitable.

Increasing fleet capacity was also analyzed and a plan for growth was provided that would increase profits over several years using a combination of company owned trucks and owner/operators.  An additional recommendation was to take advantage of our client’s consistent performance and strong relationships in order to develop freight brokerage services.  Given the additional time required to manage implementing both of these recommendations, it became clear that a dispatcher would need to be hired.

Brightleaf suggested that the client diversify his freight hauling services to other industries as the majority of his current customers operated in industries hit hardest by the recession.  Other recommendations were to increase the company’s web presence in order to capitalize on its changing identity, to utilize technology to better track shipment locations and arrival times, and to outsource accounting and other services so that the client could dedicate more time to company expansion.  It was also suggested that he reduce his time on the road for the same reason.
 

The Outcome:

The client evaluated the research and simulations provided by Brightleaf and agreed with the results.  He is now confidently pursuing a growth plan that he both understands and believes to be achievable.  As the warehouse option would not be profitable, he acted quickly on the other recommendations.  To allow the owner to step into a full-time sales and management role, both a replacement driver and a dispatcher were hired.  A new business entity was established for the brokerage portion of the business, and an experienced agent was hired to rapidly build the new brand.  Web presence development was initiated through a third party web design service and the freight brokerage URL and web site were created