Value of Teamwork

Background:

When it comes to business growth, is that ever a bad problem? It actually can be if a company is not prepared for the changes required to take the leap and succeed at the next level. This is what happened for a local South Jersey industrial contractor. The home grown, privately-held company built a strong quality reputation in the industry and began to grow and grow and yes, grow. As with many companies, this shift was not without challenges and the company soon experienced a seemingly difficult spurt.

The Issue:

The company’s growth exceeded the amount of working capital required, which presented a financial challenge for the business. It was facing bankruptcy and simply put, they needed to stabilize the business. To counter the negative effects of such growth, company leadership had to increase its current line of credit exponentially while convincing lenders it would be a trusted investment.

The Resolution:

The phrase “you need a village” has become something of a cliché these days but it can also be fitting when companies are faced with challenges albeit financial, operations, sales or a combination. The company’s CFO saw the writing on the wall and brought together a team of skilled experts to jointly work at stabilization. Ruotolo, Spewak & Co. (RSCO) was one such teammate in addressing many of the internal and external steps needed in the process. They worked hand-in-hand with the CFO plus other legal and financial professionals to facilitate the banking and insurance needs required to achieve the goal.

Specifically as an outside adviser, RSCO was charged with a number of key tasks to include streamlining and introducing new internal systems to improve management’s decision making ability. The stabilization process also required a change in the company’s positioning. This included reviewing the tax structure in place and estate, succession and transition planning. RSCO also performed the audits required by lenders who were being approached for the increased borrowing base and creating clearly defined accounting department roles, responsibilities and job descriptions.

The impact of change whether good or bad is wrought with hurdles and RSCO was cognizant of the human factor. The firm took a practical view, presenting the pros and cons for each of the proposed changes and built a level of trust alongside its other teammates. Over time the goal of stabilization not only was achieved but the results of the implemented changes far exceeded expectations. The one-time struggling small business revenue grew ten-fold over the next five years, ultimately executing a trade sale at a significant valuation.