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.
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.
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.
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.
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.
“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.”
Red Hook Investments