Two partners started to think about an exit strategy for selling their $40M business. They hired a business valuation expert to tell them what their business was worth on the market. The valuation expert came back with a market value of $7M, a number that was just slightly higher than their cash on hand. The partners were surprised that the number was so low, considering their cash on hand was high and the business averaged 9% Net Income annually. The valuator told the partners that their business was actually worth very little due to the fact that there was no sustainable organization or systems in the business. The partners engaged OPxcel business performance consultants.
A $20M mechanical contractor saw its cash on hand shrinking and its A/R aging creep up as the economy slowed down. A/R was averaging 75 days with a larger percentage falling in the over 90 category. To compound the issue, vendors were cutting lines of credit and starting collections sooner. OPxcel business performance consultants were already on site leading a service delivery change initiative when the president of the company decided it was time to focus on improving cash.
A large multinational industrial service company realized that the service division had lost touch with the customer. The field technicians had become so bogged down with the company policies and paperwork that it had lost its ability to respond to the customer. Customer satisfaction ratings were dropping, cancellations were increasing and the on time delivery metrics were falling. Something had to change.
