​A $7 million manufacturing company, experiencing continued growth, was running out of space to accommodate expected volume increases.

Challenges:

• Their facility lease, which required a 6 month notification, was expiring.
• A year ahead of the expiration, the company began to evaluate their alternatives.
• Possibilities included adding to the existing leased facility, building new or moving to an existing building.
• The estimated cost of moving to a different location included $200,000 to move and reinstall the manufacturing equipment.
• Major considerations of relocation were the retention of a skilled workforce and staging the move to cause minimal disruption of customer deliveries.

Solution:

• The Lauber Business Partners CFO, working with the management team, developed a financial model to evaluate multiple scenarios including various purchase options.
• Using the financial model, the bank was kept apprised of the financial ramifications of the various alternatives and how the move would potentially impact the loan covenants and cash flow.
• An existing facility that met the size requirements was identified. The financial model was used to validate feasibility. A review of the employee roster indicated minimum disruption to the workforce.
• The financial model was used to calculate the impact of the new facility on overhead rates and break-even, as well as the impact on cash of adding equipment needed for future growth.

What this meant to company:

• The company was positioned for long-term future growth.
• Setting up the new facility provided for a better workflow which resulted in improved productivity.
• The company incorporated new technology to improve shop floor control.
• Based on forward looking financial information, the bank was very supportive of the move and provided funding for the future equipment needs.

The value of a Part-time Lauber Business Partners CFO:

• Extensive domain expertise in senior financial position.
• A trusted adviser to owner/CEO on many matters.
• Looks at business through perspective of maximizing competitiveness and long term enterprise value.
• Extended tenure with clients helps develop stronger financial and business acumen for client’s leadership team.

If your business is faced with these types of challenges, now is a good time to consider the help of a seasoned Lauber Business Partners veteran who has been through it before. Contact Lauber Business Partners today to learn more.