+8.5% Gross Margin Expansion → $3.26MM in Additional Annual Profit
Client
- Size: $29 million annual revenue (at engagement)
- Ownership: family owned
- Type of Engagement: Fractional CFO (3.5 years, ongoing)
The Situation
The company was growing — but flying blind financially.
- No CFO
- No Budget
- No KPIs
- Reporting consisted of printed statements from Sage 100
- Gross margin erosion post-COVID with no clear root cause
Gross margin had fallen to 26.7% in 2022, driven by rising material costs that were never priced into customer contracts.
Revenue was increasing — profitability was not.
What We Did
We installed investor-grade financial discipline:
- Built structured monthly reporting decks with KPI dashboards
- Implemented formal budgeting and rolling forecasts
- Conducted cost-driver analysis to identify margin compression
- Instituted pricing discipline tied to material inflation
- Established reporting cadence within 20 days of month-end
This was not accounting clean-up.
It was performance management.
Results
- Gross Margin: 26.7% → 35.2%
- +8.5% margin expansion
- $3.26MM increase in annual profit
- First formal budgeting process in company history
- Transitioned from reactive reporting to proactive financial leadership
Margin improvement combined with revenue growth delivered $3.26 million directly to the bottom line.
Why It Matters
Founder-led businesses often grow revenue before they build financial infrastructure.
This engagement professionalized the company:
- Clear visibility into gross margin drivers
- Pricing discipline
- KPI-driven decisions
- Board-ready reporting
- CFO-level strategic oversight backed by a full finance team
Anyone can produce financial statements. We build financial performance.