Diversifying Overreliance on Larger Clients (Exit Strategy)
Industry: Privately Held, National Signage Company
A $50-million national signage company, which catered to high-end, retail clients, wanted to execute an exit strategy, even though it had not turned a profit in many years. The company held a leading market share with locations in Florida, Texas and California.
The company found itself beholden to a very large automotive customer, accepting below-market rates, which had trimmed its margins to 17% from 25%. In addition, the company was storing $2.5 million worth of their customer’s inventory because it was responsible for replacing damaged signs within 24 hours.
CFO Consulting Partners devised a three-year business plan that restructured the company into profitability, positioning it for sale once the plan had been accomplished.
These solutions generated the following value-added outcomes:
- Assumed a Chief Restructuring Officer role to develop and execute the plan.
- Conducted financial analysis that identified the need to set new margin requirements at 25%.
- Implemented a new sales policy that linked sales commissions to margins.
- Developed a new commission policy that attracted new, assertive sales personnel.
- Replaced lost revenue from new clients in different industries that realized target margins.
- Retained new clients at higher margins.
- Reduced overreliance on less profitable clients in portfolio.
- Led the management and accounting staff until company was sold within 24 months of restructuring.
- Budget and Planning Process
- Planning and Analysis
- Prepared Financial Statements
- Accounting and Reporting
- Technical Accounting
- Asset and Liability Management Forecasting
- Interim Finance Staff
To hear how we can help transform your company as part of an exit strategy, please contact: