A $4 Million Dollar Manufacturing Company Lost a Significant Piece of Business

Challenges:

• The company lacked forward looking financial tools and had no visibility to the steps needed to work their way out of the situation.
• The company’s lender, caught by surprise, was very uncomfortable and let the ownership know they were considering calling the note.
• The three partners in the business had varying degrees of understanding of the severity of the situation.
• Costs, including compensation to the owners, far exceeded the available revenue, generating significant losses.
• Payables were stretched and vendors were becoming nervous because of broken promises.
• For several months, in a misguided effort to put up a positive front, a few days of the next month’s revenue was recorded early. As a result, in the month this was stopped, only 10 days of revenue was available to record.

Solution:

• A Lauber Fractional CFO with the right experience was engaged to assess the situation, identify the facts and develop tools to communicate with all stakeholders.
• An assumption driven financial model, including cash forecast, was created to form the basis for a work-out plan.
• The model was used to make the expense reductions necessary to get back to profitability.
• The financial model along with a 13-week cash forecast were used as the basis for a communication plan to keep all stakeholders informed on the status of the reorganization.
• The Lauber Fractional CFO completed a weekly review of the backlog to determine the optimum level of staffing for the following week. Based on this analysis, staffing was determined based on available work.

What this meant to the company:

• The company survived and the lenders, investors and all vendors were paid.
• The company was able to deliver on promises and slowly regained credibility.
• With the new financial tools in place, management slowly changed from a reactive to a proactive culture.
• Regaining confidence in the prospect of a steady paycheck, key employees remained with the company.
• The owners maintained their positions and ownership.

What you can expect from a Lauber CFO:

• A long-term strategic viewpoint that keeps the business on track
• A knowledgeable professional willing to ask the tough questions
• Timely reporting of financial results leading to proactive responses
• A focus on managing your critical cash-flow position
• Credibility with lenders resulting in improved relationships
• An experienced eye looking for cost savings and profit improvements
• The power of bench-marking your results against other businesses
• A mentor with definitive answers
• Access to Lauber Business Partners, Inc.’s broad network of proven resources

Lauber Business Partners, Inc. can provide you with customized solutions and valuable human capital to help your company overcome its challenges and achieve its goals. Our finance and accounting services include interim financial services, project consulting and Fractional CFOs.  We also provide HR, Executive Search, Coaching and Growth Planning services, helping companies succeed. For more information please contact us at 414-273-8060 or [email protected].