Turnaround Case Studies
Telemarketing Firm Struggling with Revenue/Cash Flow - Case Study
Key points:
- Put a plan in place to show how to grow company profitably within 60 days
- Helped turned annualized $350K loss into $150K profit within three months
A 20+ year small telemarketing firm with over $4M in revenues was struggling with its profitability and cash flow. During the past three years they lost over $350K per year and their future did not look very good. The problem was that the industry was viewing their service more as a commodity than a value-add feature, thus their margins were eroding and making it difficult to make money even on an incremental transaction. The owner of the business was under financial pressure from the bank that provided its working capital loan to take out a second mortgage on his home thereby providing sufficient equity in the company.
The owner hired Remergenz, Inc. to help evaluate the situation and then to assist in implementing Remergenz' suggestions. During the next five months, Keith Thorndyke and the Remergenz team worked with the company's leaders to identify five areas of focus that would take their company from an annualized $350K loss to a profit of $150K. At the same time, Remergenz also helped identify some controls, structural changes to the company and focus on where they should put their efforts immediately.
The company began to show improvements in less than three months after Remergenz started. The company achieved a major milestone of profitability by the end of the third month after the new plan was put in place. Remergenz checked in with the company five months after the engagement was completed and the company continued its profitability for four out of the next five months. In addition, they started to add people and grow for the first time in several years.
Overall, Remergenz helped the company improve its revenues, increased its profitability, and helped maintain optimism and morale of the team during a turbulent time. These financial results provided the company with a ROI (Return on Investment) for retaining Remergenz in excess of the 10x target set by Remergenz at the onset of the effort.
Disclaimer: Not all companies will achieve this level of turnaround and in this short period of time.