Client Goal: Stabilize and set the stage for growth.
The Current Situation:
- The company was missing profit projections which created the need for more cash from investors
- The owners and board were concerned about leadership’s plans to reverse trends
- Supply chain issues were threatening customer relationships, including a tenuous relationship with the company’s sole supplier in China
The relationship began with a four-week Diagnostic and Action Plan. Within days, issues were uncovered that were being hidden from the board that required immediate action. Altura stepped in to lead the company continued with assessing the company’s current state and developing the plan to rebuild the company.
The team focused on how to quickly get EBITDA back on track, re-build employee confidence, develop reliable reporting and forecasts and get the supply chain flowing again. We worked quickly to:
- Re-forecast revenue and EBITDA based on new information and presented an honest assessment of where the company was today, and where it could be in the near and longer-range future
- Repair the relationship with China supplier, who was working to break ties with the company, and implement stronger agreements and terms through quick and open negotiations
- Rapidly reduce overhead costs and excess inventory on-hand and in the supply chain by undertaking product and customer rationalization processes
- Re-build employee confidence though open communication about the current situation and outlook
How We Established Credibility:
On the verge of losing the company’s only supplier in China, a China-based consultant was added to the team to personally deal with Chinese agent and repair issues regarding open orders, pricing penalties, costs, cost increases and agreements. Through deep and open negotiation, the local executive was able to clear the way for order to resume shipment right before the crucial holiday season.
- Immediate cost reductions of $1.9M
- Increased EBITDA by 40% over trend within first four months. Increase of 95% in following year.
- Company back on track to achieve successful exit for investors with a strong leadership team