12/01/2023
How a commercial door and hardware dealer hired a President to regain profitability after unexpected turnover led to a rapid decline in operations.
EXECUTIVE SUMMARY:
A commercial door and hardware dealer with two locations unexpectedly lost their General Manager to a heart attack, leaving the owner to operate both locations. Within 6 months, the Installation Manager and top salesperson left the business, internal tension was high, and operations deteriorated. Within 1 year, accounting had not been managed and the business was losing money.
Misura Group recruited a new President from a Fortune 500 company with the same customer base to work in conjunction with the owner to clean up operations and regain profitability.
The results:
Within 3 years, P&L profit grew from a $1.8m loss to a $3m profit, a $4.8m delta. The President inherited a business with $22m in sales losing $150k/month on the bottom line and improved it to $25m in sales with 12% EBITDA.
THE CHALLENGE:
UNEXPECTED TURNOVER
A $25m commercial door and hardware dealer had two locations in the East and Midwest US. The company employed 25 installation techs whose expertise were a major strength of the business. The owner took over operations for both locations after the unexpected passing of the General Manager for the larger location, which generated $20m in sales with 80% installed products. Within 6 months of the owner taking over operations, the Installation Manager and top salesperson left the business, causing the branch to rapidly decline. Within a year, the accounting had not been managed leaving IRS reports not completed, vendors not paid, and boxes of paper invoices and work orders not collected on piling up.
PROFITABILITY
Misura Group was hired to find a President who could work in conjunction with the owner and gain the trust of the team, clean up operations, and regain profitability.
OUR SOLUTION:
OPERATIONS EXPERT
Misura Group determined that the client needed a leader who was a strong team builder and operations expert, with experience in an installed business model and similar customer profile. Since the installation team was a strength for the company, along with their estimating and sales teams, production knowledge was not as big of a concern.
CUSTOMER BASE
The top candidate came from a Fortune 500 company with a strong reputation for developing great leaders, in the elevator dealer space that served the same commercial customer base. This leader had a proven history of success developing operational processes and an understanding of the needs of the customer, with relationships in the target metro area.
THE RESULTS:
The new President hired a team of accountants to clean up the boxes of paperwork and collect receivables; within 3 months the company had their first P&L in years. Within 1 year, the new President implemented the first price increase the company had in 7 years and set up project-based costing and a 3-tiered pricing program.
The estimating and detailing department grew from 2 to 5 people which freed up the sales team to work on business development.
The President implemented vendor tours to gain the vendors’ buy-in to the new business plan, renegotiated the outstanding debt which provided the capital needed to fund the turnaround.
Within 3 years, P&L profit grew from a $1.8m loss to a $3m profit, a $4.8m delta. The President inherited a business with $22m in sales losing $150k/month on the bottom line and improved it to $25m in sales with 12% EBITDA.
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