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What Can We Do for You? An LGI Success Story
Many times privately-held businesses are having some financial pains. When they are ready to make the pain stop, they call LGI.
Chief financial officers can be compared to captains of a financial ship. They have lots of experience in navigating through the sometimes choppy waters of helping an organization borrow money, cut expenses, manage cash flow, and chart a steady course for the future.
Here's just one example of an LGI success story that may help in your decision whether to hire a CFO or continue with business as usual:
Tony Ramos, president of High Value Distributors (president and company names have been changed for privacy reasons) had just been appointed to his job by the family who owned the business. His past experience was in sales, and he knew the company he took over was troubled, but he didn't know how badly. He knew he needed help to turn things around for High Value Distributors.
He had just fired the company controller. High Value had had several recent CFOs with short tenures.
His firm had lost $300,000 in its prior fiscal year, and was on the way to losing $800,000 in its current fiscal year.
Then he came to work one day and received some very bad news. The bank called their loan.
Ramos was finally ready to stop the bleeding. A CPA referred him to LGI. He called us to see if there was anything we could do to help. We came on board late in the fiscal year, during the controller's last week at work.
Financial statements were months behind schedule, and the company had a negative net worth. LGI began to take immediate action while we assessed the real situation. We asked Ramos to focus on running the business and generating profitable sales. We reduced costs/overhead to regain profitability. We looked at the company's old budget and promptly prepared a new one showing how the company could be profitable again.
Then we hired a new accounting manager, and put together a financing package for the banks, including the company's forecasts.
Once we had the financing package, we met with various banks to obtain new financing. The new accounting manager caught up with old work and began delivering timely financials. As we began to get a look at the real financial situation, we suggested a second round of company cost reductions
Now the company was focusing on good asset management of cash flow, receivables and inventory. Over a six-month period of time, the reorganized firm began to show a profit.
The following fiscal year, High Value Distributors turned around, and began earning about $200,000 a year.
LGI had taken a failing company with negative net worth and large losses, and arranged for a new banker using asset-based lending.
After one year, Ramos could stop worrying about finances, focus on growing the company, and develop new products and services.
The company is still an LGI client today. Sales and profits have grown every year.