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Business Challenge
Our client had recently added product fabrication
at several locations to respond to increasing demand for
its products, as well as a desire to shorten lead times
in its highly competitive industry.
Then, the terrorist
attacks of September 11th curtailed commercial development
significantly, especially high-rise office structures that
were a prime market for the company’s products and
services.
Before long, the investment in additional production
facilities coupled with decreasing demand created a situation
where the company was losing money every month.
Business Strategy
The CEO hired Barry Worth to analyze its operations.
Barry proposed a plan that would stop the losses and
refocus the company toward profitability. Specifically,
the plan included:
- Step #1: Assessing major problems and opportunities
- Step #2: Cash preservation and restoration of cash flow
- Step #3: Pricing adjustments
- Step #4: Restructuring the company
- Step #5: Implementing a new operational and financial
plan
- Step #6: Negotiating debts and settling pending litigation
The Measurable Difference
Our client implemented Barry’s suggestions as proposed.
Specifically, this included streamlining & closing production
facilities, increasing prices, aggressively collecting accounts
receivable, reorganizing and merging of corporate entities,
settling litigation, and securing additional financing.
This plan resulted in an operating profit for our client
for the first time in two years. However, it was agreed that
for the best interest of all parties the company should be
sold. At that time, Barry and the M&A Team at Brown Smith
Wallace packaged the company, found a viable buyer and sold
the company.
What else should I consider?
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