A Rewarding Engagement
Oct 16, 2010
I was engaged by the business owners in June/2010. In the 18 months prior to my engagement, their experience was marked by the following:
1. The company ran net operating losses in 15 of the preceeding 18 months.
2. Most of these months, the company suffered negative cash flow.
3. The owners personally injected over $500,000 into it to keep operating.
4. The accumulated net operating losses left the company with negative shareholders' equity.
After reviewing their cost structure, quoting process, labor management processes and working capital quality, we embarked on the following initiatives:
1. To better manage the labor distribution and cut direct labor costs
2. To develop better, more timely management information.
3. To effectively collect outstanding receivables.
4. To increase the quality of communication throughout the organization.
5. To push accountability & responsibility down to the lowest levels possible in the organization.
The results of this process are that the company has returned to profitability in each of the last two (2) months. Continuation of the current trend will result the company posting a net operating profit for the fiscal year. The owners are now re-invigorated and enthused about the prospects for the future of the company.