2 x more money in the company account!

Challenge

Maciej Budkowski, Managing Director of ExplainVisually, wanted the company to operate more predictably.

As he put it:

“I approached Casbeg to have the company’s revenues under control. I want to focus time and financial resources on what works. I wanted peace of mind and confidence that the company is heading in the right direction.”

Where does cash (and peace of mind for management) come from in the company?

With a financial cushion of cash reserves covering three months of operating expenses, the CEO can now rest more peacefully, free from the stress of financial uncertainty.

Building such a cushion requires systematic profits and streamlined cash flow. To achieve this, the company needs to:

• Measure the profitability of each project with clients,
• Avoid situations that unnecessarily increase project costs,
• Regularly check the cash balance,
• Forecast revenue levels for the next quarter,
• Properly and systematically manage CRM.

Those bullet points became the focus of our collaboration.

Measuring Project Profitability

“If you can’t measure it, you can’t manage it.” – Peter Drucker.

Previously, profitability was measured based on intuition. This approach led to challenges, such as:

• Difficulty determining whether a project was profitable or dangerously close to the cost threshold,
• Weak negotiation power with clients regarding additional fees for project changes,
• Difficulty creating accurate pricing estimates—without measuring profitability, the company couldn’t learn from its mistakes and make more precise estimates over time.

We introduced a simplified equation to show whether a project was profitable:

Invoice value paid by the client – Costs involved in completing the project = Profit from the project

By systematically monitoring projects using this equation, ExplainVisually could rely on numbers rather than intuition.

To make a project profitable, it was necessary to:

1. Set an appropriate invoice value (i.e., know how to price the project),
2. Estimate project completion costs and ensure not doing work for which the company does not get paid

In our collaboration, we focused on the cost side of the equation.

We recommended breaking project costs into two groups:

• Production costs (script, illustrations, animation, logistics),
• Account management costs (i.e., the time the account manager spent managing the project).

The company calculated the profitability of projects over the past few months. The results were as follows:

With a clear understanding of project profitability, we were able to confidently identify 20% of projects that are 2-3 times less profitable than the rest, empowering us to make informed decisions.

Understanding the true costs of projects Has relieved the stress of client negotiations, as we can now clearly see the project costs and confidently target a higher profitability threshold.

Reducing Project Costs

Many ExplainVisually, clients are commissioning an animation for the first time. Often, several people from the client’s side are involved, creating the risk of misunderstandings.

Therefore, ExplainVisually employees always educate clients step by step about the animation production process.

That point of no return is when the storyboard—sketches of each animation scene—is approved.

Sometimes, however, clients wanted to make changes after approving the storyboard. They often didn’t want to pay for those changes, claiming they didn’t understand the significance of that stage.

This led to two options: either defending the project’s profitability and straining the client relationship or covering some of the client’s mistake costs at ExplainVisually’s expense.

We recommended that when the project approaches storyboard approval, ExplainVisually remind clients that they are approaching one of two scenarios:

1. They manage to gather all the changes, and the project cost won’t exceed the original budget,
2. They miss gathering all the changes, leading to extra work and costs.

This reminder helped motivate clients to submit all ideas before the animation moved beyond the storyboard stage.

Monitoring Cash Flow

Measuring project profitability and eliminating unnecessary costs is the foundation of a profitable company. Ultimately, this translates into more cash in the company account.

ExplainVisually aimed to build a financial cushion—practices ensuring cash reserves can cover upcoming expenses.

To prevent cash flow issues, we recommended the following:

• Regularly update the company finance spreadsheet,
• Analyze the numbers on the same day each month, ideally after payroll when the account balance is lowest,
• Shorten payment terms and introduce payments for partial project milestones,
• Strive to reach a core capital target—where cash reserves cover three months of expenses.

Following these guidelines, ExplainVisually created a spreadsheet to track company finances and regularly fills it out.

“We check the company finance spreadsheet every week. We know how much cash we have. We also monitor which invoices are due in 60, 30, and 14 days. That attention to cashflow lets us predict how much cash will be in the account shortly, which helps us sleep better.”

„What will our revenue be in a few weeks?”

Answering this question without a sales forecast is guesswork. Creating a sales forecast is also guesswork if the company hasn’t measured critical metrics like:

• Conversion from lead to qualified lead,
• Conversion from qualified lead to win,
• Average monthly number of leads,
• Average win value.

Using CRM data, we calculated these metrics and started building sales forecasts for the coming months.

“Thanks to the quarterly and annual forecasts, we know where we stand regarding sales. We compare our revenue aspirations with metrics like lead volume, conversion rate, and average win value, which helps keep our plans realistic.”

„CRM became a source of insights rather than a headache.”

We recommended the following to improve CRM usage:

• Separate sales funnels by lead source,
• Organize sales stages,
• Add common reasons for losing potential clients,
• Measure key data points that could help segment customers later (e.g., country, contact type, prior experience).

“The CRM is well organized, so we now check it frequently. It turned out that referral leads are valuable and easy to capture.”

Results

Thanks to the collaboration:

• ExplainVisually’s cash reserves doubled,
• We identified 20% of projects that were 2-3 times less profitable
• We reduced the CEO’s involvement in day-to-day operations
• With an organized CRM, the company is always aware of what’s happening in sales,
• Maciej sleeps better and can plan the company’s development more confidently.

Would you like to achieve similar results in your business? We’d love to have you as a client. Feel free to contact us at [email protected]