A Memphis-based independent professional services firm has added a service to its client offerings that’s intended to help keep municipalities away from the financial precipice and avoid the fate of places like Detroit, which in recent weeks filed the largest municipal bankruptcy in U.S. history.
Strategic Resource Management, founded in 1992, has a still relatively new municipal services division it launched to complement the existing profit-enhancement work the firm does for private sector clients. The firm at the moment is working with Paris, Tenn., Three Rivers, Mich., and Sturgis, Mich., helping those and other future cities cut costs and enhance their revenue to maintain and keep a balanced budget.
Strategic Resource Management executive Jim Kurtz leads the municipal division. Firm CEO Brad Downs, whose father, Curtis, started the firm in 1992, said the municipal work is an obvious extension of what the firm long has been doing for private sector clients, which consists in large measure of “assessing opportunities for cost savings and presenting them to clients.”
Over the past 20 years, Strategic Resource Management has helped more than 2,000 organizations including financial institutions and manufacturing facilities – and now, municipalities – boost their bottom lines and reduce costs. So the firm has a model it believes is working.
“From a timing perspective, we seem to be coming to a good place right now,” said Downs, pointing to the firm’s approximately 190 clients across 40 states. “We focus on improving the bottom line through things like vendor enhancements. And our business model is built on savings we find.”
As a sample of the firm’s ability, Strategic Resource Management says many of the financial institutions it works with get savings of between $125,000 and $250,000 for every $500 million in assets. In other industries, the savings tend to be 1 percent to 3 percent of revenue.
One of the clients the firm worked with is a bank in Ohio that boasted a strong “efficiency ratio” – a figure basically calculated by dividing expenses by revenue – of less than 50 percent. Despite that healthy metric, the firm was still able to help the bank generate savings of more than $5 million over the course of five years.
Many of the vendors Strategic Resource Management works with also work for municipalities, so the service extension has turned out to have familiar elements. Downs stressed the company is focused on more than cutting costs, though, unlike other consultants in the same field.
“We bring a fresh set of eyes,” Downs said.
Strategic Resource Management works with businesses and organizations around the country from offices in California, Georgia, Texas, Tennessee and Indiana. It works with each client to target specific goals and then “leverage our existing market knowledge” to extract savings from things like routine costs and processes.
The company says it specializes in other things like lining up expenses with industry benchmarks and fostering partnerships with suppliers.
Downs’ father spent a significant part of his career working for Fortune 500 companies, where he repeatedly found himself looking for ways to cut costs and maximize profit. No surprise, then, he eventually decided to turn that knowledge into a business of his own.