For the past seven years, I have supported a husband-and-wife team as they pursued their dream to build a business that would allow them to live the life to which they truly aspired.  During this period, the business has experienced significant growth, doubling in size, and generating a steady cashflow, enabling them to live a comfortable but not extravagant lifestyle.

However, recent developments have challenged the couple’s perception of what is business success.  Their bankers declined their application for additional funding to renovate their home citing insufficient cashflow in the business to service the debt.  This decision puzzled the couple especially when the business had experienced its most profitable year to date and the capital value of their home had increased.

The rejection prompted them to start a conversation to better understand the factors driving the profitability of the business and how to improve performance.  They were clear in the view they wanted to maintain the business at its current levels.  Given this they drafted a budget for the fifteen months to 30 June 2025 and sought my input.

During my review of the budget, I raised whether it included salaries for the couple.  They confirmed it did not.

In response, I proposed revisions to the budget incorporating equivalent salaries for them both as if they were employed in the business in their current roles.

Upon incorporating those salaries in the budget, the business moved from earning a healthy surplus to a substantial loss.  From a purely financial standpoint, the couple would be better off closing the business down and seeking employment elsewhere.

This revelation came as a shock to them, given the benefits they enjoyed from owning a business, notably the exceptional work-life balance it afforded them.  Whilst the couple were determined to preserve these benefits, they understood the need to implement fundamental changes in their approach to managing the business.

Since then, we have been collaborating to improve the efficiency of the business operations, with a focus on optimising the utilisation of existing resources to improve profitability.