How Ram Jack Uses LivePlan to Balance Financial Health and Growth
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Ken Marquandt started moving houses back in 1994 after graduating from the University of Oregon. He got into construction and found a niche in the industry physically moving houses. He clearly had the entrepreneurial bug and created a company to fill this need in the Willamette Valley. His company literally moved houses from one place to another in town. “Lock stock and barrel I lifted it up, put it on wheels, moved it down the road.” This was the business.
Then in 2001, Ken was in his office when a fax came in, curled over the lip of the machine, and landed on the ground.
It was a message from a steel pilings manufacturer called Ram Jack. Ken remembers an engineer standing right next to him as he picked up the fax and looked at what Ram Jack was offering. Both looking at the offer thinking, “wow if this is all true, this equipment could be a game-changer in the Willamette Valley.”
A few months later, Ken decided to give Ram Jack a shot. Ram Jack Corporate is a franchisor and franchises its business to people like Ken. He and his team did their first job in Springfield, Oregon, and Ram Jack corporate sent some engineers to show the team how to work with the steel pilings for foundation repair. The pilings worked great and Ken continued to work with Ram Jack corporate on some jobs, but he was still focused his business primarily on moving houses.
Pivoting the business
Ken credits his wife with pushing him to shift his business from moving houses to stabilizing foundations and becoming a Ram Jack franchise, known as Ram Jack West. She saw the complexity and hard work in moving houses compared to the revenue and growth opportunity of working with Ram Jack and focusing on foundation repair for residential and commercial properties.
So in 2005, Ken officially shifted his business model and became a franchisee of Ram Jack. The business quickly grew from $400,000 that first year to over $14 million in 2019. Ken’s wife had been right, and this new business model provided fast growth for the company.
However, until about two years ago Ken never did any forecasting or budgeting. He is clearly a savvy business owner and used his knowledge of the business and industry to guide his “gut feel” management style.
He would get more work, need a new crew, and buy a new truck. Then he would buy another truck and get another crew for the next job. Before he knew it, he had 11 crews, nine new trucks, and lots of expenses, payables, and cash flow issues. The more the business grew, the more complicated it became to manage the finances and keep the business cash healthy.
With this much organic growth, Ken was juggling a lot. He could not grow without buying major equipment, and without growing his payroll. He was finding the need to staff up and get equipment for jobs was depleting his cash. At the same time, he was having to wait on getting paid from clients, further putting his cash position at risk. He was balancing all of this without having a clear view of his financials and how he could improve his position.
Finding clarity in business growth
At this point, Ken thought to himself:
“Wow, I should probably start budgeting for some of this to see whether all this is going to work out. It seems like it’s going to work, but how do you really know?”
That’s when Ken knew he needed to find a way to have greater clarity into his growth, his expenses, his payables, and all his financials. Ken started looking for solutions to help him budget and forecast to get on top of his business’s financial health. He needed a tool that would simplify cash flow analysis so that he could better manage growth while keeping his business financially healthy. After talking to a few other business owners and CFOs he landed on LivePlan.
Once he chose LivePlan he remembers that this transition wasn’t easy at first. His biggest hurdle was just deciding to change the way he managed the financials for Ram Jack West.
“You don’t want to change. Nobody likes change. Especially me. But now that we have done the work, streamlined QuickBooks, and started using LivePlan, I can strongly urge anyone to do this. I was afraid of the change, afraid of what sounded like a painful process, but then once you get through it, you’re like, Oh, that was pretty easy.”
“And now I can be working from home. I can be in Alaska working where we have an office. I can be anywhere, and I can get the reports I need from LivePlan on my phone. So it’s been a good transition. It was a very good idea”
How Ken uses LivePlan for better business management
For Ken, deciding to take the leap from managing his financials based on a gut feeling to using LivePlan connected with QuickBooks Online was all about better business management.
He recalls looking at his profit and loss statement that showed profits but struggling to connect those results with the state of his balance sheet and cash management. He needed to have a better handle on why the balance sheet seemed to always be going in the wrong direction, even though the profit and loss statement indicated growth. Why was he constantly struggling with cash, and pushing his line of credit to the limit?
To uncover why this was occurring, Ken worked with his accountant, and his bookkeeper, and got everything set up in LivePlan to pull actual numbers from QuickBooks online. Then, after putting a forecast together, he was finally able to get some clarity into the financials and better understood how to carefully grow without running out of cash.
One of the things Ken likes best about LivePlan is the scenarios feature. With it, he can play with the numbers and actually get a view into what would happen if he took a new job, added another crew, maybe even bought another truck. He could assess expenses, and really understand how it would impact him today, but also how to plan for the future, and even decide which jobs to take.
Prepared to face uncertainty
By tracking his expenses, and actually looking at what was happening, he was also able to understand places where he was spending too much. Before using LivePlan he was spending 8-9% of revenue on marketing, without really realizing it. Ken started managing those marketing expenses as a percentage of revenue once he actually saw and understood how much he was spending. By using LivePlan he was able to plan more carefully and has optimized his marketing expenses to be just 1-2% of revenue, without losing any sales.
“LivePlan helped a bunch. Now we’re making money and managing our cash. I plug in a lower revenue number, see how it cascades through the forecast, and go back and forth making changes until I am happy. LivePlan is game-changing. I’m going to start to get chills as I think about it because it was about the coolest thing I’ve ever seen.
For a guy who’s never budgeted ever to do this, I think, wow, this is what you’re supposed to be doing. Yeah, well, it gives me chills, because we love LivePlan and we live and breathe it.”
As Ken and Ram Jack West tackled business during Covid he realized that having LivePlan in place, connected to QuickBooks online would allow him to forecast and plan for the uncertainty. Ken was able to get a PPP loan back in April of 2020 and uses LivePlan to manage the cash from his funding in the best possible way. He was able to plan carefully and bring back his revenue from the initial standstill most businesses experienced.
LivePlan helped him bring back his revenue in a financially healthy way. And it helped him prepare to take on whatever would come next.
