Business Exit Strategy

Situation:
Company was losing $500,000 per month on $7,000,000 in monthly sales. The division also had 5,000 part numbers, high commission rates, and hundreds of unprofitable customers.

Accomplishments:
• Developed and executed strategy to re-price and exit 65% of the business
  Within 40 days, over 35 major customers signed binding contracts with 25% price increases and 15 day terms.
• Consolidated, outsourced, and eliminated unprofitable and non-core parts.
• Reduced unprofitable part numbers, customers, and overall transactions by over 50%.
• Developed and implemented “Go Forward” strategy identifying product lines and customers to keep and build on
• Developed and implemented company strategy of planned salaried staff reductions, reducing staff from over 125 to 55 in 6 months, reducing overhead by over $4,000,000 per year.
• Reduced sales rep cost over 30%
• Negotiated a 7% price reduction with major polymer supplier.

Results:
• Within two months, losses were reversed and replaced with a near 10% operating margin
• All customer exits successful with no bad debt or excess inventory
• 10% of identified exit business stayed at the higher prices
• All “Go Forward” customers retained and new business awards secured
• Reduced total debt over $22,000,000 within 18 months.