When your business is struggling it can often be hard to see how many things are going wrong all at once and what the priorities are. In this case study you will read about how I helped a customer turn her business around.
One customer reached out to me during the Great Recession a few years ago. Her engineering business had been doing very well. Unfortunately she now had a large cash flow issue. This was due to high staff costs, lots of unsold inventory and large amounts outstanding with suppliers.
The business had months to live.
The fundamental cause was that none of her customers had any orders because of the poor market conditions. Thinking it through it was clear that all her competitors would be in a similar position and thus other companies in the supply chain would be suffering. We could negotiate.
That’s the first thing that we did. We talked to our suppliers and explained the position that we were in and the actions that we were taking to resolve it. As a result we were able to restructure the account payables with significantly longer payment terms. We were also able to trade a large amount of our inventory to one supplier in payment of outstanding invoices.
Whilst this was happening we worked hard on the sales team. Eventually it 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 Salesforce.com. We used machine learning to parse enquiry emails and then get quotations 90% prepared without human intervention.
The result of all these changes was that my customer 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 admin costs by almost 80%. Finally the process automation 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 SE Asia.
You can read more case studies here