CASE STUDIES

Heritage Cabinets

The Problem

Red Hook Investments Acquired a majority position in a distressed manufacturing and distribution business operating in the residential construction space. Red Hook was in need of a third party evaluation specializing in inventory strategy and fulfillment operations in a light manufacturing environment.

The Solution

We performed The Deep Dive for Red Hook Investments and provided a full deck of observations and opportunities to validate the financial potential for this business turnaround. We then outlined a four phase turnaround plan for the operation to be executed over the following three months detailing steps to a cash flow positive monthly position.

1

The Deep Dive

Our discovery session revealed a great business with strong customer demand suffering from a ballooning inventory, improper fulfillment habits, an unsustainable purchasing practice, and lack of strategy. Their Margin was suffering, 87% of their open orders were past due, and they could not pay their bills. Vendor relationships were strained and the team was burning out. There were significant opportunities in inventory management, Direct Labor planning, purchasing, financial leadership, and workflow.

2

The Results

A clearly outlined four phase turnaround plan for the operation to be executed over the following three months detailing steps to a monthly cash flow positive position.The business will target $160K/mo increase in gross profits and move from an average $175k monthly loss to $50k monthly profit.

1

The Deep Dive

Our Deep dive revealed several large opportunities including establishing financial plans, correcting inventory & purchasing process, and implementing a weekly P2P check in with established performance and financial metrics.

2

The Work

  • Financial plans set
  • Retail/Service pricing validated
  • Understanding of Breakeven/Profit Points
  • Staff Compensation structure aligned with Breakeven Point
  • Inventory Control Process established and Weekly Purchasing systemetized
  • Key Retail Metrics established for tracking
3

The Results

  • Retail % increased from 9% to 16%.
  • Inventory process implemented
  • Reorder levels set for all inventory products and weekly purchasing practice established
  • Retail Pricing analyzed and corrected to cover expenses and ensure proper margin contribution from each sale. ($9k additional gross profit through year one)
4

Ongoing Support From Nercher

  • Financial Planning and Goal Setting
  • Weekly expense Review
  • Decision support and Financial validation
  • Pop up Inventory Audits
  • Monthly Financial Meeting
  • Bookkeeping Services
  • Nercher Quick View Dashboard
  • Deep Dive
  • Four Phase Turnaround Plan

The Client

“Jake was absolutely phenomenal during the discovery phase of our engagement. He provided valuable financial metrics, critical insights, and a go forward plan that we then contracted him to execute. We intend to work with Jake and Nercher on multiple engagements in the future.”

Mike Dahlke


Entrepreneur Investor
Red Hook Investments

Know Your Business. Nercher Your Business. Ready to Make Progress?