Recovery after losing the biggest customer

How Platinum obtained new financing, launched a self-directed sales team and streamlined production.

Situation

Well-established custom window manufacturer had grown profitably for many years, but increasingly relied on one major customer. The key customer left and a tougher economy led to a 65% sales drop and the company’s first unprofitable year. In addition, a divorce of the owners created a management void and uncertainty. The bank issued a default notice, as the company’s viability was in jeopardy. The company needed to quickly: 1) prove viability and attract new financing; 2) restore sales revenues and develop a sustainable plan for sales growth; and, 3) streamline operations to do more with fewer resources.

Banker: Associated Bank (original)/Itasca Financial (refinance)

Attorneys: Krass Monroe LLP

Solution

Built a financial planning model to present turnaround viability to new asset-based lender and closed on new financing.Trained all personnel in the Theory of Constraints to organize workflow. Formed self-directed sales and customer service team. Recruited and trained network of sales representatives to pursue new markets and attract new customers with flexible pricing afforded by the increased productivity. Shipments doubled year-to-year. Mentored new general manager, the former controller, to assume day-to-day management with a revitalized management team.

Results

The company returned to profitability within 12 months. Implemented profit-sharing bonus plan to serve as a catalyst to change the culture and drive continued improvements. Company is now ready to return to lower cost, traditional lender. New sales reps have been added. New products are being introduced. The company has a winning attitude.

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