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It's All About the Benjamins

Why Positive Cash Flow is Crucial.

Construction

Industry

Concrete Molds

Manufacturing

Category

Vertical

Summary

While serving as CFO, LeVert Management Consulting led the successful turnaround of a manufacturing and construction company resulting in growth of gross revenue by 200%, an increase of $20M annually.

Situation

The owner of the company had started a manufacturing business in the construction industry that received solid business, but had plateaued in terms of growth and was plagued with financial issues resulting in no profitability.

 

The growth of the company was throttled due to the fact that they could not obtain financing. No lender was willing to come to the table due to the company’s irregular cash flow, stagnant gross revenue, negative lender history, and cumulative losses.

Approach

  1. Resolved dispute with the IRS through an Offer in Compromise (OIC).

  2. Implemented financial and accounting processes and controls.

  3. Created effective narrative to demonstrate to potential lenders the benefits of providing this company’s loan.

  4. Stabilized cash flow in order to maintain operations and enable growth.

Results

  1. Saved company $600K through an Offer in Compromise (OIC).

  2. Significantly more accurate accounting including financial statements and projections.

  3. Successfully arranged financing with banks, including:

  4. A $2M Line of Credit (LOC) and $1.735M Term Note

  5. A $1M LOC increase during a period of distressed cash flow

  6. An additional, subsequent $1M LOC increase

  7. Positive cash flow outcomes resulted in ability to invest in company and achieve gross revenue growth of 200%, or a $20M annual increase.

The Details

The owner of the company had started a manufacturing business in the construction industry that received solid business, but had plateaued in terms of growth and was plagued with financial issues resulting in no profitability.

 

LeVert Management Consulting was initially brought in to help the company with IRS issues. Though they owed a substantial amount, LeVert Management Consulting helped them resolve their dispute via an Offer in Compromise. The resulting savings amounted to $600K.

 

After resolving the IRS dispute, they engaged LMC for CFO services. LMC implemented proper accounting procedures and established financial reporting processes. LMC created monthly and quarterly financial reporting and reformed retroactive financial reports for prior quarters in order to generate accurate forecasting and to facilitate the process of obtaining financing. LMC also created a narrative demonstrating benefits of providing a loan to this company, which resulted in successfully obtaining bank financing and subsequent loans.

 

As a result of these measures, the company was able to invest in equipment and pursue rapid growth. Within one year of obtaining the loan, this company’s revenue grew 200% to $30M total annually.

Services Provided in This Story

  • Turnaround Services

  • Financial Strategy Services

  • Strategy Services

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