Academic journal article Business Case Journal

Communication Solutions: Moving to the Next Level

Academic journal article Business Case Journal

Communication Solutions: Moving to the Next Level

Article excerpt

"You can have it all, but you can't have it all at one time," Diane Hunter, Chief Executive Officer and founder of Communication Solutions, Inc., said to a group of college students in a talk about her struggles and successes with the firm she and her husband, Bill, founded 13 years ago in 1995. (1) She did have it all--a family, a successful business, and the prospect of continuing to grow personally and professionally. Communication Solutions (CS), her consulting firm in Rockville, Maryland, provided services to its clients including strategic communications, human capital consulting, creative services, interactive and print design, marketing, and training and systems development. The firm began as a corporate training provider, but soon was able to offer its clients integrated solutions to a variety of communications problems. In other words, the firm was in a position to offer not just marketing or not just technology, but a combination of marketing, technology, human resource management, or training--whatever solution best fit the clients' needs.

Now, at the beginning of 2009, the firm had about $7 million in sales and the expectation of continued high growth in the future. Diane saw two primary issues for the firm. First, CS had grown about as much as it could with its current bank financing. It would take more capital than was now available to grow sales to the next level. She wanted the firm to be in the best possible position with the highest revenues possible when it came time to sell out--her goal within the next five years. Not only did Diane need to consider all possible sources of financing, including additional bank financing, but needed to look at CS with a critical eye from the lender's point of view--would a lender like what he/she saw in CS? Second, the firm faced working capital and management challenges. Diane thought that if CS could get a handle on its slow accounts receivable collections and other cash management issues, it would be better positioned to obtain financing and in turn grow sales. The firm had weathered the ups and downs of the technology bubble and subsequent bust, and it had just completed a difficult year because of the financial crisis, all issues that had seriously impacted profitability. Diane believed that CS's erratic profitability was an issue that would work itself out as the firm became more experienced in bidding for consulting work.

The U.S. Consulting Industry

Consulting industry revenues in the U.S. reached close to $300 billion, with about 2.5 million employees in early 2009. Industry growth declined in the 2008 recession, but was expected to pick up as the economy recovered. Industry analysts predicted that the greatest future growth areas were expected to be in information technology and "green" environmental issues, both areas where CS had developed expertise. (2) While CS was not yet in a position to be a competitor of the big players, like Accenture, Deloitte Touche, McKinsey, Booz Allen, and Marsh & McLennan, Diane was convinced that the firm had the potential to succeed against such competitors if it could continue its current high growth trajectory.

Early Days

After finishing her undergraduate degree in English, Diane worked as a journalist on Capitol Hill, covering the telecom industry. After earning her master's degree in Instructional Systems Design and Adult Learning, Diane worked for a small consulting firm in Philadelphia that provided training services to telecommunications companies. After carefully researching salaries of people with her training and experience and bringing this information to her boss, she was told she would never be worth more than the $30,000 he was paying her. She'd thought about how she would have run the business herself, and her boss's comment was the final straw. That evening she mapped out a business plan on a restaurant paper tablecloth over dinner with her husband, Bill, and headed out the door and into her own consulting business in Maryland, near a host of potential government agency clients. …

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