The situation
Manufacturing companies are not the easiest companies to manage. There are a lot of moving parts(literally). However, with the right systems in place, running this type of business can be very rewarding. Beyond filling a need in the market, a manufacturer also creates jobs. We couldn’t risk losing a domestic manufacture of fiberglass products to the marina and boating markets for over 30 years.
Just like every other industry, manufacturing has it’s ups and downs. When covid hit hard in 2021, running a manufacturing business was tough. Managing the facility while keeping everyone covid free was challenging. When government shut down operations, it pushed some companies to the brink of permanent closure.
With limited production happening, and even more limited sales, it was hard for this manufacturer to keep up with their bills. Losing a domestic manufacturer can take a major toll on a local economy and all of the families they are supporting. They needed a solution to get back on track and start filling a backlog of over $500,000 in purchase orders.
The solution
We had to act fast. A total restart was in order to revamp production and get the production schedules to a point of positive cashflow. This required proper cashflow planning, a capital injection, and ongoing monitoring of operations to make sure everything was happening the way it was supposed to.
Mrkt Growth assisted the manufacturer with financing the purchase of supplies and payroll, and conducted a full operational review. After the review, new processes were implemented to improve internal communications, production planning and execution, and a constant flow of materials to avoid further supply chain delays.
Some of the new efficiencies included:
- Investing in more fiberglass molds to increase production
- Implementing the use of shared document programs like google drive to help improve communication and the sharing of information across departments
- Reconfigure production schedules to support proper cash flow recognizing which customers provide prompt payments, profitability of various supplies being produced, and optimizing employee work schedules
The success!
Months later, the company is self-sufficient and heading towards running a cash flow positive operation. There is still a lot of work to do, but we are on the right path to making sure this US manufacturing company can continue supplying Made In The USA products for another 30 years or longer.
Services provided by the Mrkt Growth team:
- Fractional CEO engagement
- Weekly management calls to review production, operations, and cash management
- Business acceleration with new marketing programs
- Cost Reduction
- Sourcing working capital
- Working with a partner to refinance owned real estate
- Accounts receivable factoring to help speed up cash flow
- Recapitalize current working capital loans to pay off expensive debt
- Direct debt investment
- Provided over $200,000 in bridge funding and short term working capital to support company while improvements took place.