Computer Software Firm Case Study
Computer Software Firm – Losses / Sales Erosion
SITUATION: Sales eroding 5% to 10% annually
- Gross profit % decreasing each year as well
- Marketplace saturated with new lower-priced competition
- Management divided on what direction for growth – stalemate
NEED: Management and organizational control
- Revival of operations, increased capacity
- New product development, short and long-term
- Philosophical continuity at Owner/Manager level
- Appropriate cost reductions
- Create a solid and capable team with the integrity to run the operations
PROVIDED: Additional working capital to help fund development
- Broke the stalemate with one Owner/Manager leaving
- Created a new strategic plan with the remaining team
- Developed a plan to sell to either employees or merge with another software company
- A new marketing assistance process to work closely with existing clients, increasing services and support
Value: Saved the firm from liquidation or forced sale
- Brought in additional working capital
- Introduced strategic alliance partners for an ultimate merger
- Rebranded the firm with enhanced services in its existing and newer software
- Created a succession plan for the original owners
Potential Savings: Majority owners’ estate and retirement
- Saved over 85% of the clients
- Stemmed the loss of revenue and sales increased making it more attractive to a buyer
- Sold 2 years later to a public company
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