Importer and Manufacturer of Rail and Service Equipment
The company was part of a larger subsidiary group which was sold to the new Directors. With the formation of a new company, there was no credit history resulting in banks refusal to lend credit to the company. They were not in a financial position to be able to fund the business and discussions of a voluntary administration were had. We were appointed to assist with the acquisition; however, turnaround work was required first to stabilise the company. With as little as $10k in the bank and $3M in Creditors plus more in loans, $300k in Debtors with no sales pipeline – Directors were ready to call it a day.
Formal assessment of entire company
A formal assessment on the entire business was conducted to identify areas of risk, opportunities and improvement.
We interviewed all personnel, held workshops and on the ground reviews to see the business for what it was.
Developed a Strategy
Our aim was to develop a strategy for turnaround and once stabilised expansion strategy. Manufacturing equipment overseas instead of Australia with tight quality control standards, checklists and procedures. The business was structured with better systems, processes, policies and procedures that improved employee performance, sales margins, cost control and improved cash flow for company stability. Entered into new markets – Governments, councils, 1st Tier construction, wind farming with higher profitability margins. Managers were monitored and given directive to improve performance and some performance managed. Hired quality employees to assist with the growth of the business.
Created detailed sales budgets
Created detailed sales budgets per customer, per state, per product / service. Full analysis was performed on history with forecasting predictions. This was monitored monthly and action was taken to improve numbers or reward the team. Data and insights were reported for supporting evidence for Management to highlight financial impact if changes were not made. Some examples included creating a minimum order value for customer orders, creating strategies for stock obsolescence to reduce slow moving stock.
Established Key Performance Indicators
Established Key Performance Indicators for key processes and measurement, reporting and monitoring. Created dashboard reporting highlight financial and non-financial data in summary and detailed format and holding monthly management meetings. Identify quality business opportunities that served the company’s vision and goals. Improved sales quotations, follow up procedures and closing deals – resulting in higher sales conversion ratios and the achievement of sales budgets.
Improved stock control
Improved stock control through stock policies and procedures, creating an automated warranty claim system and assessment process
Warranty procedure allowed for stricter warranty assessment – and more rejected claims. Monitoring of warranty claims assisted with obtaining credit notes or cash back from suppliers. The warranty claims process was also automated delegating the task to the customer rather than the Administrator.
Strong financial position
Strong financial position – profitable, cashflow positive turnaround focus moved to accelerated growth. Implementation of changes were executed as time was of essence. Tighter internal controls of costings and employee productivity pre authorised. Stock and old equipment was sold to increase cash inflow. Scaled down the operations of the business – paused servicing and ceased the importation of a branded equipment that was causing warranty issues. Preventing further compounding losses and cash outflow for a product and service that generated negative or break even returns. Once stabilised we accelerated sales growth with targeting Governments and Council tenders with success as well as winning work from large high quality clients.