Situation: This mid $30 million in revenue, 17-year-old privately held meat processing company had decent revenue growth but profits were erratic. The company had lost money in 2012 and had budgeted a $250,000 loss in 2013. Management systems were very weak. The company was struggling trying to implement a new ERP system. Leadership was poor. The owner was 71 years young but was hoping for an eventual exit. We were asked to identify the drivers of erratic profitability and implement solutions while also preparing the company for an eventual sale.
What We Did: In April we conducted an assessment to identify how to improve performance and profitability. From this assessment, we then facilitated the following; designed inventory control and cycle counting procedures, built team based waste reduction projects, identified and implemented key performance indicators and linked them to goal driven bonus programs, rebuilt product costing process, replaced CPA compilations to accounting firm audits, identified need for and hired VP Operations, facilitated revised ERP implementation plan and budget, developed formal budgeting process, developed strategic growth plan, facilitated selection of investment banker to sell the business, managed owner expectations.
Results: In 18 months: increased enterprise value by 5 times, increased operating profits from 0.1% to 6%, reduced labor costs by 20% in first 6 months, increased inventory accuracy from mid 70% to over 95%, improved product costs by over $300,000, built strong leadership team, facilitated team based and empowered culture, restored 401K profit sharing, initiated bonus program to all employees, owner taking more vacations. Revenues over $50M. Owner has received multiple offers above ‘asking’ price.
Testimonial: “I evaluated Growth Strategy Partners and concluded they had both the credentials and experience to perform a critical evaluation of my company and then to help us lay out a plan for solid improvements on multiple fronts. They came through in spades; we are about to conclude the finest year in the history of our company. Also, I will continue to retain Growth Strategy Partners for their objective assessment of our continued improvement and profitability.” President, Meat Processor