Wondersauce Case Study

Posted 17 May by Blaine Bertsch in Accounting, Budget, Case Studies, Cash Flow, Entrepreneur, Small Business

Eric Mayville is a co-founder of New York creative agency, Wondersauce. Founded in 2012, the rapidly growing company currently employs seventy people in New York and an additional ten in their Columbus, Ohio Office.

With a growing list of high-profile clients and projects, Wondersauce is already a cornerstone of the New York creative scene, creating outstanding products for their diverse client list is fuelling the rapid growth of the business.

Where They Started

Initially, Eric and business partner John, tracked sales and cash flow in a simple and straight-forward system that culminated in a set of spreadsheets, but soon Eric was in charge of managing their contracts and cash flow as their growth began.

Eric would run scenarios through his head, gauging the impact of hiring new staff, landing jobs and losing bids, all in an attempt to take hold of their increasingly complex business. “Everything was done very ad hoc. I used spreadsheets, sometimes we would save them, sometimes we wouldn’t,” explains Eric, “a lot of it was just like that, or in my head, before Dryrun.”

Early on, Wondersauce was in a comfortable position. They started cash flow positive out-of-the-gate. “We didn’t take any loans, we didn’t need any help, we always had our cash. Not until we reached that certain height, certain pain-point, did we start really thinking about how to manage cash flow,” explained Eric.

Their frantic growth led to some key questions: How many new designers can they hire? Can the additional staff be sustained and profitable? How will their sales need to look to stay in the black and grow?

“How do we communicate with our Creative Director when he says I need five or six more designers,” says Eric.

The challenge was in evaluating all of the different scenarios the new hires and rapid expansion posed. It was critical to understand the impact on their cash flow and decide whether they can sustain the sales needed to support the new staff.

Finding Dryrun

Eric discovered Dryrun while researching methods for tracking sales and cash flow. Working in the creative industry and “not a numbers guys,” Eric was eager to find a system that was clear, highly visual and something he could share with other “non-numbers people.” Eric needed a system that would both help him understand the state of their cash flow, sales projections and growth plans while sharing the “big picture” with his partners. Dryrun fit the bill.

The first forecast Eric built dealt with expansion into a new office. Keeping the other partners in the loop was crucial. Expenses were exploding and they now had to account for both recurring revenue while also landing new projects to feed their growth, at that point, from twenty to forty people.

Here is the actual line of reality…it was almost instant. It hit me the first day.

Managing a business of this size and complexity is truly a team effort. Discussions with the partners had to be efficient and highly informed. While evaluating their growth plans in Dryrun, Eric explained that they could “run through those actual scenarios in real time which is fantastic.” Dryrun proved to be a highly operational and on-the-fly tool.

Taking advantage of the scenario features in Dryrun, they were able to balance out their expenses, figure out what they could pay themselves, while keeping an eye on the next four to five months. Now they could track their expenses, accounts receivable and even build in sales projections.

This was the first time they were able to see a complete picture of their cash flow, budget and sales pipeline all in a single view. “We weren’t able to grasp any of that until we put the scenarios through Dryrun” explains Eric. Their new understanding revealed that they were “going to be good for the next few months” giving them room to plan for growth.

I think I spent a few hours setting up an accurate copy of that first scenario and it was great. When we looked at it and saw we could actually duplicate a scenario…and say “hey, here’s what happens if we lose an account. Here’s what happens if we get a new office. Here is the actual line of reality” …and that was great. It was almost instant, it hit me the first day. – Eric Mayville

Bringing a Finance Pro On Board

The rapid growth of Wondersauce, lead Eric and his partners to bring on some critical help in the form of Chris Sampogna, a finance pro from KPMG. The timing was right for Chris to move on to a managerial and finance position inside of the company. Being the brother of partner John, and a friend of Eric, he was eager to explore a new industry.

Chris was tasked with taking control of everything from taxes and payroll through to their accounts payable and receivable. “They were needing someone there to know the numbers, to know what was coming in and going out” says Chris.

“Now that we have an in-house accountant that has a finger on the pulse of our business, he can send us multiple scenarios, we can look at sales forecasting and it can all be put together. The picture is so much bigger now …there are so many moving parts now. I have no other tool that can do it like this” adds Eric.

Watching the Key numbers

Chris has developed a sophisticated system of four forecasts in Dryrun to keep his hand on the pulse of Wondersauce. Among those forecasts, he tracks their cash flow, what’s coming and going into the business along with their checking account.

He also tracks their ongoing budget of expenses, along with their retainer income, in order to set sales goals while keeping an eye on their bottom line. He maintains a forecast that is at least six months out.

Tracking and communicating their break-even point and sales goals on a regular basis is essential for the partners.

To further complicate the situation, Wondersauce has two locations in different states. To keep everyone in the loop in their Ohio office, Chris shares sales forecasts, along with the bottom line numbers of their current sales versus their overhead. These baseline forecasts along with other key numbers are shared to keep everyone in the loop across the entire business.

Evaluating Past Performance

Now that Dryrun has a history of company performance built up, Chris is able to look back and evaluate their past performance by comparing month over month and year over year figures. He can also uncover issues in their expenses, such as answering “why was our overhead 30 grand higher than last year?” explains Chris.

With numerous projects, timelines and payment terms, Chris can also quickly answer if, or when, different invoices were paid. This information is often the most critical to the partners.

In a project-based business like Wondersauce, “being able to come up with a bottom line analysis” is critical. With different timelines, budgets and allocation of staff, cash flow can be highly variable but expenses continue every month. It’s critical to have an eye on those bottom-line numbers and visualizing it in Dryrun is a big help,” according to Chris.

Rapid Growth Scenarios

“With the rapid growth we are going through right now, we have a lot of different changes” explains Chris, “one of the big things is knowing our overhead and monthly costs.” With Dryrun, he can scan to keep track of that critical bottom-line, “which is huge, I can’t do that with excel and it’s a great tool for that.”

By knowing when they would go into the red, based on their current sales and retainer income versus their ongoing expenses, helps them to not only know their break-even point but also set sales goals that can fuel their growth.

The Power of the Visuals

Visualizing the big picture with the built-in graph helps Chris jump from quick scenario building that’s not too specific, through to highly detailed budgets, cash flow and sales numbers. That ability lets the team at Wondersauce deal with long term growth planning along with the weekly and monthly cash flow that fuels their business.

Sharing the critical day-to-day cash flow forecast, alongside the longer range sales projections and growth plans is critical for the team at Wondersauce. The mission-critical data informs key decisions that drives the business forward.

Being able to visualize everything, it just looks more believable…you can just go down the list and see all the numbers. You know every decision is based off of knowledge. – Chris Sampogna

Wondersauce has rapidly grown into a leading creative agency in New York City. Being a member of the Society of Digital Agencies, they frequently advise up-and -coming businesses on the digital solutions that drive their business forward. As one of the most progressive companies in the region, Eric is a strong proponent of harnessing the power of digital tools.

To fuel the sales and growth of business, if you aren’t planning resources with 10,000 Feet, using Pipedrive for sales and Dryrun for cash flow, then “I don’t know how you are running your business.” – Eric Mayville


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