Navigating a business through a global pandemic is a challenge that no entrepreneur could be prepared for. For the design COLLECTIVE’s Founder, James Blissett, the COVID-19 crisis threatened to derail the company’s hard-earned success and growth.
However, with the guidance and partnership of the Accountability Services team led by CEO Dave Fischer, the design COLLECTIVE not only weathered the storm but emerged stronger and more resilient than ever.
The power of financial planning and analysis can guide a business from the brink of collapse to a remarkable comeback.
Before the pandemic
The design COLLECTIVE, founded in 2007 by architect James Blissett, had grown steadily each year up until 2020. With a team of 21 employees and nearly $3 million in revenue, the firm had established a strong niche in designing movie theaters for three of the four largest theater operators, as well as projects for Starbucks and other clients. Financially, the company was doing well.
Despite their strong overall financial health, there were a few unprofitable markets that put pressure on their bottom line along with a lack of guidance from their previous accountant.
DAVE BECAME A DE FACTO BUSINESS MANAGER
In 2009, James Blissett connected with Dave Fischer from Accountability Services, who became more than what business owners often think of when they hear the term “CPA.” Dave became a de facto business manager, providing the much-needed financial guidance and partnership that James had been missing.
The pandemic's impact
Fast forward to 2020, and the devastation that would cripple and crush so many businesses. When the pandemic hit, business came to a halt. The design COLLECTIVE experienced a 75% drop in revenue, leading to layoffs and financial struggles. Despite securing PPP funds, the firm still faced significant challenges once the funding ran out. Theater operators that owed tens of thousands to the firm were going bankrupt, and nobody was building.
THE ERTC LIFELINE
It was at this point that Dave Fischer and Accountability Services introduced the design COLLECTIVE to the Employee Retention Tax Credit (ERTC).
Improving cash flow to survive
Understanding that more needed to be done in order to save the company and allow them to emerge from the pandemic with an opportunity to rebuild, Dave Fischer and the Accountability Services team focused on improving cash flow through various strategies, including:
Dave knew that the accounts receivable represented a big opportunity. Knowing that the design COLLECTIVE’s clients also received significant amounts of PPP and ERTC funding, there was every reason to tap into this opportunity to reduce accounts receivable and improve their cash position.
And, while lines of credit were difficult to get, Dave helped identify opportunities James had not even considered.
These strategies helped change the firm’s financial outlook, with a renewed focus on cash flow and making informed decisions based on revenue and expenses. Dave’s guidance went beyond financial and cash flow strategy, providing a calming presence and expert advice during moments of crisis.
This would prove to be invaluable for James, as there were more challenges in store.
More challenges, business revival & growth
As if a global pandemic wasn’t enough, the design COLLECTIVE would also be impacted by the writers’ strike and actors’ strike both of which occurred in 2023, as the pandemic subsided. Without writers and actors, there were no movies. Without movies, theater operators were not building new locations.
James leaned into Dave’s calm demeanor and expertise when at times, it appeared that the business he had built was crumbling.
A PERSONAL PARTNER IN YOUR BUSINESS
“A CPA is a personal partner in your business, ” Blissett explains. “Dave asks the right questions. He always wants to know, ‘Where do you want to go,’ because he is good at getting you there.”
As the movie industry emerged from both the pandemic and the strikes, the design COLLECTIVE has experienced a remarkable recovery. In recent months, the firm has achieved its highest billings since 2019, with projections for the best year since the pandemic began.
The improved financial position has allowed the firm to pursue new opportunities:
- Build up staff and hiring new employees
- Explore acquisitions to expand into new markets and diversify their portfolio of clients
- Implement new budgeting software to better track project profitability and efficiency
The right CPA firm is a true business partner
This experience taught James Blissett the importance of having the right CPA firm in his corner to provide guidance during the most challenging business scenarios – not just for financial strategy, but in all aspects of business management and growth.
CHALLENGES
- COVID-19 decimated the movie industry
- The pandemic impacted the design COLLECTIVE to the tune of a 75% loss in revenue
- PPP loans were insufficient to bridge the gap
- High overhead costs led to a cash flow crunch at the peak of the crisis
SOLUTIONS
- Apply the Employee Retention Tax Credit (ERTC)
- Implement a range of cost cutting strategies to improve cash flow
- Take out a small line of credit as a stopgap measure
- Attack accounts receivables by reaching out to clients who received PPP funding
RESULTS
- the design COLLECTIVE made it through the pandemic with minimal layoffs
- Business was properly positioned for rapid revival & growth following the end of the pandemic
- Firm is projected to enjoy their best year since 2019
- Improved financial position opening the door for exploring new strategic initiatives
The design COLLECTIVE is a Seattle-based architectural and interior design services firm serving regional, national, and international clientele. Their design specialties include cinema, retail and restaurant environments, and residential, hospitality, and mixed-use architecture.
