Consulting Case Studies
Case Study 1
The ClientAn e-Commerce Start-up
The Challenge
The client had to contribute significant personal funds to accommodate large variations in the company's operating cash and inventory needs. The client asked CFO Selections to help find a way to avoid some of these contributions. As is typical of so many small-business owners, the client had little time to pursue alternatives and was simply doing the same old thing because there was no time to look into alternatives.
An assessment by CFO Selections uncovered the following:
- Unusual delays in suppliers shipping product, and thus the client's ability to bill customers for shipped orders was hampering cash flow
- Purchases of high-turnover inventory items could easily be funded with a line of credit further easing additional cash requirements
- While the owners themselves had excellent personal credit, the company had none established
- If the company continued to grow at the same rapid pace, the owners would soon be unable to fund the growth from personal funds.
CFO Selections presented and implemented the following plan:
- Recommended establishing a modest line of credit to manage current cash flow variations without the need for additional personal loans and investments and to begin the process of building credit history for the company
- Took on the task of working with the client's bank to identify the right banking group to work with and research available credit options
- Presented options to the client with a recommendation
- Handled submitting the application paperwork to the bank and was the primary bank contact during the entire process
- Helped the client to formulate an appropriate strategy for how to use the credit line to best advantage
CFO Selections is continuing to support the client in this area as well as others including business strategy, financial modeling and expense analysis in order to find other ways to pro actively anticipate the needs of the business to help ensure future success.
Case Study 2
The ClientA technology distributor of software, appliances and professional services.
The Challenge
The client had a number of areas it wanted to address, both financially and operationally. The client wanted to completely re-evaluate its back-office procedures to ensure legal and financial compliance and optimal operating efficiency, and to prepare for an eventual exit strategy.
The client charged CFO Selections with executing a 3-pronged scope of work:
- To complete a business operations review, make recommendations, and draft and lead implementation plans to improve their back-office and work flow processes in the areas of accounting, logistic operations, staffing and human resources and related procedures;
- To perform a comprehensive financial review and implement new funding, cash optimization, controls, compliance, and processes to improve financial performance and position, and;
- To help plan and position the company for a potential exit strategy.
The Solution
CFO Selections presented and implemented the following plans:
- Updated financial policies and procedures, which generated $2M in excess cash flow over the first 6 months
- Doubled profitability in a difficult flat sales environment
- Implemented Human Resource policies and procedures to bring company into compliance
- Implemented a new employee benefits and compensation program resulting in increased retention
- Renegotiated and improved bank lines of credit, resulting in net annualized savings of $100,000
- Renegotiated vendor purchasing contracts, causing net annual margin improvements of 20%
- Established an investment banking relationship and prepared a company exit strategy
- Helped present client to potential buyers and prepared due diligence
CFO Selections continues assisting the client with its exit strategy procedures, and advises the client regarding potential buyers.
Case Study 3
The ClientAn East Coast-based IT professional services and data network infrastructure provider.
The Challenge
The client's in-house accounting services were costing too much for the value the client was receiving. Significant accounting services were not being provided, plus the client's high turnover rate made managing payroll and accounting difficult. The client also needed someone who could act as financial advisor and provide leadership to the client's executive team.
The Solution
A part-time CFO Selections resource provided the leadership and advisory services the client needed at a significantly reduced cost. Accounting services the client now receives through CFO Selections include:
- All accounting operations
- Cash flow management
- Modeling, budgeting and forecasting
- Business strategy planning
- Monthly closing of the books
- CFO Selections resource acts as a member of the executive team
- Client has access to CFO Selections' wider network of expertise, including relationships with financial institutions, accounting firms, and legal resources.
Through CFO Selections, the client receives a higher level of service for a lower cost, plus they have a senior executive on their staff they did not have before.
Case Study 4
The ClientA privately-held broadband communications technology developer.
The Challenge
The client was struggling to remain viable after significant changes at all levels of the organization and consolidating to a single location. The client won a significant contract with a very large and financially sound company, but needed to streamline the organization to create greater efficiencies so they could fulfill the contract effectively.
In the course of the transition, the client found that its lack of strong senior financial leadership was impeding the company's ability to successfully execute against the contract, meet board and investor expectations, and attain their goal of profitability.
The Solution
CFO Selections was initially hired on a part-time basis with the very specific goal of providing financial reporting to the senior management, Board of Directors and investors. Additionally, CFO Selections was responsible for recruiting and building a finance team. The engagement was expanded to include tax compliance and guidance, audit preparation, contracts management and administration, and general financial management. We were able to recruit a strong financial professional, thereby adding to the credibility of the finance team as well as the organization.
The Partnership
CFO Selections provides ongoing financial advice and services in cooperation with the client's new finance team.
Case Study 5
The ClientA rapidly-growing gourmet gift foods company.
The Challenge
The client suffered from cash flow issues caused by rapid growth, undercapitalization and lack of financial management expertise and control processes. The client accumulated excessive losses and struggled with liquidity issues that threatened future viability. They had grown too rapidly and lacked processes and working capital to fund their success. If the company was to remain in business, the client needed financial restructuring and a solid, experienced financial advisor but could not afford a full-time CFO.
The Solution
CFO Selections was brought in to clean up the company's finances and help find bridge capital. CFO Selections helped the client establish new banking relationships and secure a loan. Interim short-term financing was also secured to fund seasonal business. Subsequently, a plan was developed to help the client set goals for predicted future growth and cash flow requirements. Special planning was done to address the influx of sales due to appearances on national food shows. The client was impressed with our ability to problem-solve in a time of crisis, and said, "without CFO Selections, we would have had to close down."
The Partnership
CFO Selections continues to provide ongoing financial advice and services to help the company during its next growth phase.