TCII :: Management Consultants
Building Profitable Business
The two businesses were fully integrated with two regional sales offices – one covering the north the other the south. The computer systems are being combined and overall the logistics, warehousing and transportation are in process of optimisation.
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Company turnaround/restructure
Our Challenge
A review took place on a Ceramic Tile distribution business operating out of two depots, one in the North of England and one in Oxfordshire. The business possessed many strengths and the owner had a great deal of experience in the industry.
It quickly became apparent that the management and organisational structure was weak and therefore an exit for the owner through a business sale was unlikely to be attractive, as too much day to day activity was being handled by him without sufficient consistent administration, systems and underpinning.
What we did
The Sales structure was totally re modelled seeing the departure of a “Commercial Director” who was replaced by two more dedicated and focussed senior managers – one handling sales and some procurement, the other logistics and administration/finance. One of the salesmen was promoted to have a broader managerial role and placed in charge of distinct key accounts, merchandising and sales development for the north. Another sales representative was recruited; all at little extra addition to overhead.
It was identified that the business required greater critical mass and the owner was encouraged to research target businesses and ultimately consider acquiring a trade competitor. Acquisition talks took place and, after a two month negotiation, the new business was purchased on favourable terms which included deferred payments and a structured earn out.
An underperforming accounts assistant was been replaced with an experienced and committed person who was able to pull the monthly management accounts back in house and also tackle in house payroll and credit control.
The outcome
The two businesses were fully integrated with two regional sales offices – one covering the north the other the south. The computer systems are being combined and overall the logistics, warehousing and transportation are in process of optimisation.
The activity focussed on attending and chairing meetings, taking the lead role in interviewing potential candidates and then appointing them with clear job specifications and motivational incentive schemes, undertaking diligence for the new business and formulating a deal acceptable and affordable for all parties. Putting in place systems and reporting procedures to include appraisal schemes, contact reports and job specifications for all staff. Employment contracts are also now in place. The consultant has attended key accounts and major supplier meetings.
The business is on forecast and achieving budgeted profitability. The new staff and management team are destined to produce a great deal more business and whilst some salary costs have increased the overall mix is balanced and some redundancies have been made in the newly acquired business to reduce costs and use shared facilities.
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