"BIG has been very supportive to me throughout the process of acquiring a business. I couldn't say enough about how gracious, knowledgeable and encouraging they have been and how I look forward to continuing to work with them. They have been a wonderful teacher and mentor."
"My name is Ryan Miker and I owned and operated a fitness facility for 5 years. It was my first business and before I got started I had millions of questions and concerns. Jim Bonvissuto and Patti Sours helped me from the very beginning and stayed with me throughout the entire 5 years. The knowledge that Jim and Patti have is priceless. I know for a fact that I would not have been able to do what I did without their assistance. They say that getting started is the hardest part and that after you get started the right people will be placed in front of you. Patti and Jim were just that for me. I know that for any business/finance questions that I have in the future, Patti and Jim will be the first people I go to for advice and assistance."
"Using Business Improvement Group's services for several years has eliminated any tax-related stress for my small business and personal income taxes. The team is dedicated, knowledgeable, trustworthy and responsive, going above and beyond. We couldn't do business without them!"
"We have used Business Improvement Group to complete our tax returns for almost 10 years with great success. Jim and team are extremely knowledgeable in handling complex tax situations involving: rental properties, stock option & grant processing and identity theft tax guidance to name a few. More important, they possess the ability to make the complex simple. Thanks for all the help."
"I have worked with Business Improvement Group for over ten years. They have handled my personal taxes and helped me set up my Subchapter S Corporation. Great advice and highly reliable."
A global distributor implemented a new sales strategy changing its method of going to market. One Year after implementation, a very profitable company was losing $2 Million per month.
- The strategy was not accepted by the sales force and in turn sales were plummeting.
- An extremely successful and profitable company had become unprofitable and the monthly losses were growing.
- Employee moral was at an all time low. Key employees were leaving the company.
- Management did not know what to do.
- A complete assessment of the organization was completed.
- Implemented a new sales rep’s compensation plan - a simplified variable commission plan based on a percentage of gross profit.
- A comprehensive cost reduction plan was implemented focusing on “low hanging fruit” in the Operating expenses.
- A vendor rationalization analysis was performed and vendors were consolidated.
- A distribution center rationalization was performed and a lean process was implemented.
- Packaging was outsourced to enable the company to focus on its primary strengths.
- A national account strategy was developed to target the larger more profitable accounts.
- A conscious retrenchment strategy was implemented to move away from smaller, less profitable customers.
- A re-engineering of the Accounts Receivable process was completed.
- An ERP system was selected and implemented.
- Revenues had increased by 25 % or $25 million in the first year.
- The $2 million per month loss had become a $3 million per month profit.
- $37 million in free cash flow had been generated.
- Expenses were reduced by 30% or $30 million in the first year.
- Cost of Sales was reduced by 5%.
- DSO was reduced by 12 days generating $8 million in cash flow.
- The ERP system provided the infrastructure to acquire and integrate other companies once the turn-around was completed.
Check out Turn Around Management Services.
Crisis Management / Turn Around
A manufacturer had entered into an extreme cash flow crisis.
- Zero availability on their credit line.
- Management team could not see the “big picture”.
- A plan had not been determined to resolve the situation.
- Acting as the interim CFO, a 13-week cash flow forecast was immediately put into place and managed.
- Acting as the interim COO, an assessment of personnel, IT systems, manufacturing workflow process, the competitors, the market, and vendors was performed.
- After the assessment was completed, a plan was implemented to address the following:
- Organizational Structure
- Manufacturing process
- Purchasing process
- Inventory levels
- Engineering design and personnel
- Pricing of Jobs to Improve Gross Margin
- Bank Relationship
- Successfully negotiated with the bank to be granted a seasonal overdraft.
- A Lean Manufacturing process was implemented.
- Inventory Levels were appropriately adjusted.
- The engineering department was upgraded.
- The pricing methods were changed and Gross Margin was improved by 20%.
- Communications were improved with the bank.
- The company survived its cash crisis and is prospering under a new business model.
Check out our Crisis Management Services.
Out of Court Liquidation / Turn Around
A North American Distributor, which had experienced rapid growth, had run out of cash and recorded its first loss in its 32-year history.
- Cash Flow was critical.
- The business was failing rapidly.
- The lending institution was calling in the loan.
- A/R DSO had climbed to 65 days.
- Inventory DOH had climbed to 70 days.
- Operating expenses were 95% fixed.
- 250 of over 2,000 SKU’s comprised 85% of its sales.
- A customer segmentation analysis showed 90% of its revenue came from 10% of its customers.
- A complete assessment of the organization was completed.
- A complete turn-around plan was implemented.
- Existing personnel were upgraded.
- A telemarketing sales initiative was launched.
- The revolving credit facility was negotiated with a new lending institution.
- Leases were terminated, facilities were sold, and warehouses were consolidated.
- A business that was not part of the core competency of the business was divested.
- Expenses were reduced by 45%.
- Headcount was reduced by 50%.
- DSO was reduced by 17 days.
- DOH was reduced by 25 days.
- Debt levels were reduced by 70%.
- $20 Million of free cash flow was produced.
- The balance sheet was restructured and the company was positioned to sell.
- Shareholder value was maximized by the sale of the company.
Check out our Out of Court Liquidation Services.
Cost & Profitability Analysis / Receivership
A U.S. Welding and Manufacturing Co. had incurred losses for 30 consecutive months and had maxed out its credit line, completely depleting itself of operating cash. They wanted to sell the company but their balance sheet was not conducive to a sales transaction.
- Cash Flow was non-existent.
- The business was deteriorating rapidly.
- The lending institution was not extending credit.
- Costs were primarily fixed rather than variable.
- Inventory and Accounts Receivable was not being managed.
- Fortune 25 customers were dictating profitability.
- Completed a root cause analysis to determine whether to implement a turnaround plan or liquidate the company.
- Developed a comprehensive turnaround plan and then acting as COO, implemented the plan.
- Utilized 80/20 analyses to refocus and retrench the company on its profitable customers and industries.
- “Peeling back the onion” to uncover non-value added tasks throughout the organization and redeployed resources to maximize return on equity.
- Implemented an aggressive working capital management program to generate positive cash flow.
- Implemented and refined the company’s ERP system to allow for the implementation of Lean Manufacturing processes.
- Implemented a new quoting system which led to successful negotiations with the customers allowing for price increases.
- Implemented a new marketing strategy to allow for profitable, sustainable, sales growth.
- When the secured creditor and ownership wanted the protection of a receivership, BIG acted as the court appointed receiver.
- Ongoing management of the company while obtaining a buyer for the company.
The Bottom Line:
- Processes were refined, the customer base was diversified, prices were increased, costs were reduced and turned variable. The company recorded its first profitable month in over 2 ½ years.
- $5.7 million dollars of free cash flow was generated to operate the business.
- Accounts Receivable DSO was reduced by 29 days or 69%.
- Inventory was reduced by $1.4M (50%).
- The company was sold as a “going concern” within 3 months.
- The value realized through the sale was at least double of what would have been realized in a liquidation setting.
Check out our Cost & Profitability Analysis Services.
Forensic Accounting / Raising of Capital Financing
The company’s Chief Financial Officer embezzled money, leaving the distributor with limited cash reserves and an accounting system that was in complete disarray. The embezzlement also altered the company’s net worth, jeopardizing many of their credit lines.
BIG began by conducting a forensic accounting engagement to retrieve the stolen cash. Immediately, negotiations were started with their banks to secure seasonal overdraft and credit line extensions even in light of their blown bank covenants.
From there, BIG performed extensive work inside the company, recreating accurate accounting records and implementing accounting policies and workflow procedures to ensure this type of fraud could not reoccur.
One way to increase the availability of cash is to properly determine the balance between customer demand and inventory levels. To do this, BIG conducted a Segmentation Analysis, enabling the retailer to purchase only the necessary quantities of merchandise. In addition, to reduce the risk of obsolete inventory, BIG implemented a new inventory ordering process; and lastly, conducted a customer profitability analysis to determine which customers and product lines were the most profitable.
The Bottom Line:
BIG was a key player in saving this retail distributor from going out of business, turning them back into a profitable, well-run company with positive cash flow.
Check out our Forensic Accounting Services.
BIG was engaged by a clothing retailer that was in the process of bankruptcy proceeding to help increase the profitability of a liquidation sale. It was essential to plan the selling process in a way that would allow them to maximize their return on their remaining inventory. This would enable them to pay off secured and unsecured creditors.
BIG was successful in its efforts to liquidate the inventory using a variety of methods and minimizing additional expenses. The liquidated inventory was sold using the retailer’s existing website, preventing them from incurring fees associated with an in-store liquidation sale. The liquidation event was advertised using cost effective tools including search engine optimization and email campaigns. BIG was also able to collect on outstanding receivable balances while negotiating terms with their creditors to ensure the best possible outcome.
In addition, BIG liquidated all fixed assets and equipment, enabling them to increase the payment amounts to their creditors. The company’s identity, which still had value, was able to be sold, and included their brand name, their customer list, and their corporate web site.
The Bottom Line:
BIG was able to liquidate all inventory and assets at a profit with minimal cost to the company, allowing them to concentrate the proceeds on paying off creditors. The fact that BIG was able to negotiate a deal to sell the brand even after the liquidation proves the success of the engagement.
This is why we are considered one of the Top CPA Service providers in North Royalton and Cleveland Ohio.
BIG was appointed by the court as Receiver to maximize asset values for secured and unsecured creditors. BIG needed to assess the true value of the remaining assets in order to return the most proceeds to the creditors.
BIG was successful in its efforts to liquidate the remaining assets and distributed the proceeds to the secured creditor. This liquidation effort included selling off the remaining inventory and collecting the outstanding receivables. In an effort to identify every opportunity for proceeds, BIG also liquidated all fixed assets and equipment of the company.
Finally, BIG negotiated collection settlements on behalf of the company, initiated litigation where necessary, and provided forensic accounting services to assess and retrieve any assets transferred outside of the receivership.
The Bottom Line:
As Receiver, BIG was able to identify and assemble all of the assets of the former distributor, liquidating them and maximizing the value of the proceeds to the secured creditor.
Strategic Loan Partnership
A commercial real estate developer was in the midst of converting a retail store building into residential apartments and condominiums and ran into numerous project problems and delays, causing them to run out of cash before being able to complete the conversion. In addition, the project was in default of loan payments and the long term viability of the project was in question.
BIG was hired as a consultant by the bank to determine the viability of this real estate project, initially performing a “cash in vs. cash out” analysis to determine if the project would be self-sustainable in the long-term. By using rates in the surrounding areas and determining the total potential monthly rent revenue, BIG determined that, due to the default of loan payments, the rent would have to be higher than the neighboring areas in order to cover both operating costs and pay debtors.
In an effort to identify all sources of incoming cash, BIG performed an in-depth review of the developer’s bank statements, current and future rent payment expectations, and even delinquent collections payments. Forecasting models also assisted in determining the true occupancy of the building, including signed leases, future leases, and anticipated leasing terminations.
The Bottom Line:
BIG was able to provide their client, the bank, with analysis that showed the investment was no longer financially sound. This information assisted them in making an informed business decision.
Business Check Up / Turn Around
The company’s owners had no set procedure to determine operating costs and the business was struggling to manage payments on their credit lines. They needed to improve operations, increase cash flow, eliminate debt, and reduce their scrap percentage.
The first step BIG took was to conduct a proprietary Business Check-Up Analysis. During the Analysis it was discovered the owners had no process in place to estimate their operating costs. BIG worked with them to re-engineer their inventory process and develop reliable tracking and valuation systems. Teaming with an investment banker, BIG then calculated financial projections and performed due diligence testing to assist them in evaluating the business opportunity.
The company also needed to identify which areas were increasing their scrap percentage. By identifying and correcting this problem they were able to increase cash flow and pay down their credit lines within six months. Lastly, BIG performed an in-depth review of their processes by product and cost in an effort to identify the most profitable metals. With new streamlined operations in place, the company was able to re-focus its efforts on customers and commodities that represented higher profitability.
The Bottom Line:
By developing and implementing a valuable and structured action plan, BIG helped this company to improve their efficiency and operations, thereby increasing cash flow and reducing debt, in addition to educating the owners on how to identify and manage operating costs going forward.
Financial, Operational & Strategic Advice / Receivership
A once successful ceramics manufacturer ran into hard times. They had maximized their credit line and had run out of cash. With no accounting system in place and their accounting records in complete disarray, they reached out to BIG for help.
This project began with a Business Check-Up Analysis. This Analysis allowed BIG to identify problem areas in the manufacturer’s financial management processes. From there, BIG was able to institute a proper accounting system, complete with policies and workflow procedures. BIG also developed and implemented a cost accounting methodology so that the owners could thoroughly understand the actual costs related to manufacturing each product, and performed a segmentation analysis to help them identify their most profitable products and customer bases. Among those clients that were less profitable, the company was aided in implementing a price increase strategy.
In addition, BIG re-engineered the company’s manufacturing process, reducing production delivery time from six months to one month and effectively increasing cash flow. This also helped the company to eliminate waste, reduce inventory levels, and increase recovery rates.
The Bottom Line:
Within 5 months, BIG helped turn this ceramics manufacturer around, transforming them back into a profitable company. Additionally, in the role of Receiver, BIG operated the company for a time, continuing to increase its value, and thereby maximizing the amount of money the manufacturer was eventually sold for.