The Problem
Towards the latter days of when we were in the Brexit campaign, a client was referred to us by a Solicitor contact. Her IT and Technology business had been doing very well, however there were huge cash flow issues. This was due to having unsold inventory, high staff costs and large amounts of inventory outstanding with suppliers. The business review revealed that the life span of the business was short.
The fundamental cause was that none of her customers had any orders because of the poor market conditions, but it was clear that all her competitors would be in a similar position as well and so other companies in the supply chain would be suffering. We would be able to negotiate.
The Solution
We strategized and talked to the suppliers and explained position of the company and the actions that we were been taking to resolve it and plans to restructure the business model. As a result, we were able to agree the account payables with significantly longer payment terms. We were also able to trade a large amount of the stock to one supplier in payment of outstanding invoices.
During this period, we worked extremely hard on the sales team. It later became clear that we could not improve their performance, and that given the market conditions any performance increase would be limited. So just before Christmas the whole team was made redundant.
In a three-week period over Christmas, the entire sales process was rebuilt and automated using Microsoft Dynamics.We used machine learning to parse enquiry emails and then get quotations 90% prepared without human intervention.
The Outcome
The outcome of all these changes was that our customer ultimately avoided bankruptcy. She had enough cash to continue normal operations and meet her renegotiated payment obligations. We also transformed the cost base cutting sales and administration costs by almost 80%. Finally, the newly automated processing meant that the time to quote decreased from 4 days to less than one and the sales conversion rate doubled.
The customer survived the economic downturn and is now one of the leaders in her market segment in various different parts of the world.
Next Steps
If you want to find out anything further about this topic then please feel free to call on 0330 236 9930, 0330 236 9938 or 07961 116321. All conversations will be in strict confidence. You can also email vee@navigatebr.com
This article is for information and interest only. It is not a substitute for full professional advice, which will take in to account the specific and individual circumstances. Navigate Business Recovery Limited cannot accept any responsibility for any loss arising as a result of any person or organisation acting or refraining from acting on any information.
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