Turnaround of an insolvent butcher’s shop requires our CRO with butcher background
Initial position
In the middle class sector companies that have missed the step towards a number-managed company and thus practically manage their operations “flying blind”. Planning and strategic corporate management are completely lost in day-to-day business. A downward spiral of decision-making, profitability and liquidity crises with subsequent insolvency can easily set in. This was the situation faced by an entrepreneur in northern Germany. The butchery business with catering, which had already been taken over from an insolvency, collapsed after just over a year. Why?
No end-to-end planning modules for profitability and liquidity were set up in the company. DB invoices and product costing/process tools were stored on a gut level and not integrated.Financial accounting was handled by subcontractors.
Briefly, the collection of business data in the food business was too late, not of high enough quality and not detailed enough.All of this led to the financial imbalance being recognized too late.
Challenges
The insolvency required a way to get out of the situation. The interim manager sent in by HANSE Interim, who not only can share personal experiences in restructuring management (CRO) but also as a current butcher in the meat market, was able to help.
The task involved first and foremost the motivation of the staff. This was the only way to ensure a regulated process during the insolvency. In addition, structures and processes had to be revised. Financial accounting had to be ensured to function as well as possible. In order to get an overview of the food business, it was necessary to create a resilient profit center accounting for clearly showing the effect of different approaches.
Following tasks had to be done:
- Recovery of impending payment defaults
- Ensuring quality in production
- Involvement of all stakeholders
- Development of solution proposals
- Preparation of plans for banks and insolvency administrators
The most important asset in the project:
The CRO’s hands-on ability to handle daily food business, as well as the ability to provide a minimum level of transparency and oversight.
Result
The company with its brand continues to exist differently. Furthermore, a plan was created, possibly supported by all parties involved, especially the creditors.
Jobs got secured. After a difficult period, there was again confidence visible among staff. Other companies in the market-related sector continued to employ redundant staff. Store sales could also be continued in a modified form.
The unit is profitable again. 400 jobs are secure. The effort was worth it.
Summary
In the first instance, the insolvency of the food business was threatened. However, with the right methods, a successful solution was found, releasing a lot of energy and confidence in everyone involved! Pressing the “reset button” was worth it.
Consequentely it is possible, to “move mountains” in insolvency proceedings, with the help of correctly applied instruments. This is for the reason of setting the right course for future success. CROs can help medium-sized companies in difficult phases – If you would like to learn more about interim management, please contact us.
Yours faithfully
HANSE Interim Management
Andreas Lau
