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 Todd was the president and majority owner of a company that marketed a
leading software package for sales tracking and forecasting. For
many years his company was a leading provider in a number of niche industries.
However, over the course of about four years of rising sales, the company
was still losing money. Todd knew he had a top product, great customers
and healthy margins. However, nothing was getting to the bottom
line. Todd employed a series of minor changes to address the issue
with little success. It was at this point where our firm entered
the picture.
We viewed this situation as being somewhat of a "turnaround."
With the company's very existence at stake, we took the approach that
there would be no such thing as a "sacred cow" during the turnaround.
We reviewed every single facet of the company. During our review,
we found areas in which the company could save significant amounts of
money. Among other items, we cut insurance costs, rental outlays
and restructured some equipment lease agreements to free up cash flow.
In some cases, we recommended additional expenditures that would have
a quick ROI. Investment areas included an accounting control system,
marketing support and order tracking software.
After all was said and done, the company became profitable even in the
midst of stagnant sales growth. When sales did pick back up, the
company was positioned to show significant profitability due to the changes
implemented. As a result, the company began to attract outside investors
and two years later, was sold at a strong multiple. Even though
the eventual sale was not part of Todd's original plans, the steps he
took to achieve greater profitability helped position the company for
the opportunity that presented itself.
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