Business Expansion Challenges
October 17, 2009
by Carol Stuckley
Client Situation:
A successful life sciences entrepreneur was lured into expanding his global business into a new, higher fixed cost, lower margin and higher risk business segment, with the further complexity of adding multiple international locations. Exacerbated by the global economic slowdown, this business segment expansion increasingly gobbled up cash, eroded margins and depressed earnings.
What We Did:
RES Partners identified opportunities to augment margins in the new business segment by identifying new services and applying premium pricing to niche projects where competition was de minimus. Additionally, contracts were revamped to comprehensively reduce business risk and improve cash flow. International operations were streamlined to eliminate inefficiencies. Importantly, this successful entrepreneur learned to say “no thanks” to new business opportunities that could not meet his newly defined risk/reward threshold.
Results:
This successful entrepreneur was able to arrest the cash drain attributable to his new business segment expansion, simplify his international footprint, improve profit margins and protect his legacy as a successful entrepreneur.