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The order book improved. The company went into profitability within weeks. Six months later, at the year end, the company had covered its losses and achieved a small annual profit.
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Sales, marketing, and profit for electronics company
Background
The company produced a unique product but had lost money for three years and their accountant was trying to help them raise finance by remortgaging their factory. The company’s sales were down and we were asked to meet the MD with a view to running a “sales drive”.
Our Challange
Prior to meeting the MD of the client company, we collected the detailed accounts from the Accountancy firm and noted that the business was running at breakeven level only!
At the meeting with the MD we recommended that before any sales drive and analysis of the profitability of his products would be critical.
What we did
Due to limited exiting business performance measurement, we started, from scratch, by first talking to the production manager who was able to produce information on costings. We also set up a spreadsheet to show the last sales prices and showing the calculated margins. The spreadsheets were then ranked by margin. This revealed that 47% of all products sold in the previous 6 months were sold at low or negative gross margins!
The production plan on orders booked was reviewed for the next 2 to 3 month period. From this information an action plan per client and product was undertaken.
Training was given to the MD and his team on negotiating and raising prices as well as identifying opportunities to changing specifications, and lower costs where possible.
Customer negotiations started immediately and within a few weeks price increases were secured.
We then reviewed the features and benefits, marketing literature, website and mail shot enclosures . We also worked with MD on clarifying his accounts and putting in key performance indicators.
The outcome
The order book improved. The company went into profitability within weeks. Six months later, at the year end, the company had covered its losses and achieved a small annual profit.
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