case study - turnround practice

Office furniture wholesaler

Stakeholder: lender.

Business: the sale of new and used office furniture to direct customers and construction companies; the rental of furniture; and the storage of furniture and documents. Turnover - £2m sales, 15 employees.

Objective: initially this assignment was driven by the lender's requirement for reliable management information and focussed on the implementation of a suitable IT system and the design of appropriate management information. These objectives were achieved and provided the owners and lender with the information upon which to determine the profitability and immediate prospects of the business.

Process: four individual databases were consolidated into one. New management information was designed and all books and records updated and verified. Additional resources were applied to the credit control function and Accounts Receivables were reduced by 45%.

Outcome: the new management information demonstrated that the business was not profitable and that the reduction in working capital had masked operating losses. Agreement was reached with both business owners and the lender to sell the surplus property assets, to pay down debt and to close the business.