Manufacturers, fabricators and engineering and technical services firms share a pattern: pricing, working capital, plant and overhead were built for a smaller company, and growth consumes the profit and cash it was supposed to produce.
The decisions that shape value
- Where the business should compete. Which customers, products and markets earn a return — and which are held out of history rather than economics.
- What the next tranche of capital should buy. Plant, capacity, systems, people or an acquisition, compared on the same economics.
- What the operating model and ownership arrangement now require. The business is often still run on a model — and a founder’s involvement — that suited it at half the size.
Where value gets lost
- Revenue growth that does not convert — margin absorbed by pricing drift, discounting, mix and cost-to-serve.
- Quoting that carries yesterday’s costs and none of today’s risk, filling the order book with work priced to lose.
- Inventory, WIP and receivables absorbing the cash growth generates, so the overdraft grows with the order book.
- Plant earning below potential, while the case for the next machine is argued without knowing what the current ones return.
What management tends to see
The order book looks healthy and margin does not follow. The same questions get different answers from different systems, and an approaching decision exposes how much of the business exists only in a few heads.
Where Graham Montrose can help
- Enterprise Performance — profitability, cash conversion and working capital; plant utilisation and the capacity already in the business; an operating model that fits the company it has become.
- Commercial Finance — pricing and quoting integrity, customer and product economics, and the investment case before the next machine or system is bought.
- Corporate Development — growth strategy, acquisition versus organic expansion, target assessment and diligence, and readiness for succession, investment or ownership change.