Getting to the Real Problem
A large contract office furniture company engaged ESBA to help with their cash flow and accounts receivable problems. ESBA discovered that the real problem was inefficient and slipshod installations that prompted many customers to withhold substantial amounts of money pending satisfactory job completion. Once the real problem was identified, an installation "clean-up" crew and a new accounts receivable manager teamed up to eliminate this problem.
Discipline is the Key
ESBA coached a designer label women's wear client, with a long history of unprofitable operations, into consistently profitable operations making them an attractive acquisition candidate. We helped alleviate many of their problems, but the single most important improvement was made in the areas of production scheduling and planning. Sales opportunities existed for a very specific period of time during each "season." Any delays in placing goods in the stores resulted in extra sales allowances, a shortened selling period, closeout merchandise and, in general, an unprofitable season. We helped to instill the overall discipline and communication necessary to maintain schedule and produce hundreds of individual styles on time. Attractive designs, plus full selling seasons, and improved operating performance gave them the profit that had eluded them.
Big Isn't Always Better
ESBA showed a hard hat/safety equipment manufacturer client that the key to their future was in "downsizing" the entire operation. They increased the gross profit percentage from 22% to 37%, and eliminated a $2,000,000 over-advance when they sold two of their companies, liquidated a third and concentrated on their original manufacturing company.
Meaningful Forecasting Will Pay Off
ESBA advised a client in the door/fixture end of the construction business to convert their forecasts into annual contracts for materials. This resulted in an assured source of supply, increased terms from thirty to sixty days, pricing savings of five to fifteen percent, and an increase in gross profit of four percent.
Adapting to Change Can Make the Difference
In a situation in the client’s patents had expired gross margins had fallen by sixty percent (60%). ESBAs worked with them to implement a new policy in which customers are charged for engineering services that had formerly provided without charge. This priced several marginal product lines out of the market. The Company narrowed it product lines, began realizing revenue for engineering services and increased its margins by fifteen percent. This returned the Company to profitability.
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