Forecasting for value: Supporting a multi-service firm through sale preparation

We worked alongside the management team of a professional services firm to build a robust, insight-driven financial forecast model ahead of a sale process. By aligning operational KPIs with financial outputs, we helped demonstrate commercial value, support the equity story, and provide acquirers with confidence in the forecast assumptions.

In a data-rich but complex environment, we helped management cut through noise, enabling them to take control of the numbers and lead conversations with credibility during diligence.

The Challenge: Delivering clarity in a multi-service environment
As a professional services firm with multiple service lines and legal entities, the client needed a forecasting model that was both flexible and detailed.

Each service line had different working capital profiles and revenue drivers, so a one-size-fits-all approach wouldn’t suffice. Additionally, management wanted to leverage operational KPIs – such as utilisation, realisation, day rates and FTEs – to support the equity narrative, but without overcomplicating the model.

With a sale process approaching, the challenge was to turn a wealth of historical data into a coherent, defensible forecast tool that would stand up to external scrutiny.

Our Work: Building a driver-based model aligned to the equity story
We worked closely with management during a detailed design phase to understand the unique characteristics of each service line and legal entity, and how these translated into forecasting requirements.

Our approach focused on identifying the most relevant operational and financial KPIs – those that genuinely drove value and underpinned the commercial story being told. This included:

• FTEs (factoring in hiring plans, internal promotions, and ramp-up time).
• Utilisation and realisation rates.
• Average hourly charge-out rates.
• Grade and department splits across partners and fee earners.

Using this data, and leveraging the outputs from the historical datapack workstream, we developed a revenue and headcounts workings based on historical performance, driving forecast outputs at the appropriate level by grade and department.

On the balance sheet side, we mapped and modelled key working capital drivers by service line, allowing management to flex assumptions and produce different cash flow profiles. This was consolidated into a single group balance sheet, giving a unified view while preserving the flexibility to input different assumptions across business units.

Supporting real-time scenario analysis and commercial insight
To support the sale process, we built in sensitivity and scenario functionality that allowed management to quickly adjust key drivers and compare base and live cases. We also created interactive lookup tables and charts to compare historical and forecast performance by grade, department, entity and working capital driver. These allowed for effective trend analysis and fast, intuitive sense-checking of the numbers.

Subsequently, management were equipped to respond proactively to acquirer queries, demonstrating confidence in their figures and clarity on the operational levers behind the numbers.

The Outcome: A forecast model that strengthened management’s position
The final model gave management control over the forecast process and confidence in the numbers they were presenting. By integrating operational KPIs into a commercial forecasting narrative, they were able to respond quickly and credibly to diligence questions.

The result was a clear, data-backed equity story supported by a forecast tool that was practical, flexible, and strategically aligned with the business’s future plans.

“In professional services, the value is in the people, —and the forecast needs to reflect that. We focused on helping management connect operational reality to financial projections in a way that told a compelling story without overengineering the model.
By giving them tools to quickly flex scenarios and answer questions in real time, we helped them take control of the narrative and build trust with potential buyers.” – Swan Partners