CASE # 6: Third Party Claims Administration Company
SITUATION: The Company had grown rapidly and was utilizing a "cash accounting" system. There were seven offices operating west of the Mississippi. After careful examination and utilizing some forensic accounting, it was determined that the company had no cash reserves to sustain future operations. There was no sales tracking. There was no costing/pricing in place to determine which sales were profitable and which were not. Sales people had to call the corporate office to get pricing.
SOLUTION: A sales plan was established which consisted of developing an accurate costing/pricing strategy. A plan was put into place to correct those companies whose billing did not cover their costs. Hand held computers were programmed and issued to the sales staff so they could deliver pricing at the time of presentation/sale resulting in higher close ratios and lower sales acquisitions costs. Two unprofitable offices were closed.
RESULTS: The Company survived intact. Sales continued to grow and eventually tripled. The company was eventually sold to a market consolidation company.