Gross Revenue: $12,515,828
Engineering Staffing Firm in MI
The company currently has a corporate staff of 14 persons. Of the 14, there are no full time sales people. they have three account managers (3 FTE’s), five recruiters (5 FTE’s), one full-time receptionist, 1 full-time receivables and payroll manager, one full-time accounting assistant, a full-time CFO and a full-time director of Human Resources and the CEO.
On any given day there are some 300 jobs that need attention to be filled and earn profits. In addition, there are on average 140 – 160 active contract employees out in the field working at client locations. They have contract employees outside of the state of Michigan and in the Canada. The company has been asked on numerous occasions to employ staff in Mexico, but has declined to do so due to a lack of knowledge necessary to do business in Mexico; however, there continues to be a great deal of interest by clients to find a resource to help them do business with contract employees in Mexico. Currently, they have five companies that have signed recent agreements to fill positions as needed. Unfortunately, because they have no one calling on these new accounts/clients, very few opportunities have been harvested and the agreements sit in a file cabinet. Although they have a real opportunity to grow and have a talented team of dedicated professionals, the CEO believes their time is better spent on attempting to fill the current opportunities in their inventory; meanwhile, additional opportunities get no attention. In addition, there is no concerted effort in place to find new business by harvesting new clients; instead, more than 95% of the resources are spent on current clients. We cannot discuss the overview of the opportunity for them without reminding the reader not every placement or contract placement company and/or market is the same. There is a major shortage of talented people with very specific engineering skills in great demand in manufacturing. Manufacturing of today is nothing like the past. In fact, it is changing so rapidly and the shortage of talent so acute, the right leadership can be well positioned to make significant progress in growing profits. Furthermore, should the political trade winds blow in favor of changing international trade agreements to protect U.S. manufacturing, they stand to experience even greater demand for services. By comparison to its peers, they are a low cost provider of services. As manufacturers continue to reduce operating costs by a variety of means, this company is well positioned to help its clients continue to hire contract employees. In brief, this company helps companies reduce costs by assuming full responsibility for employees and the pension benefits that go along with that expense. The company with its team, resume database, reputation in the industry, well-developed systems and more than 25-year-old industry brand has the potential to grow their earnings significantly over the next five years.
Competition: The company has witnessed a shakeout in the industry that began around 2001 and seemed to continue through 2009. Since that time, they have had a stable and robust client base and more important, they have continued to preserve and further cement their position as a preferred provider. There are numerous serious barriers to entry in this business. Attempting to break in and win a big account as supplier is near impossible. On the other hand, they have continued to win new activity from existing clients while being recognized by domestic and international customers as an award winning partner/supplier.
Following 2007-8 and the major decline in economies around the world and the U.S., many supplier firms were cut as the march to reduce costs by auto manufacturers included paring down sourcing partners became the business theme.Contracting companies like our client were not excluded from this review and process, yet their customers chose to keep them on board as a valued supplier as they have always been a favorite. They have survived all of those cuts and have enhanced their reputation as a “Go-To” supplier to locate and/or supply highly skilled human capital.
The barriers to entry into their customer base and manufacturing industry, in general, are greater than they have been in modern manufacturing and engineering business history. They have a very sought after and valuable place in the manufacturing and engineering marketplace. By putting the right leadership in place, the company’s profit levels will significantly increase driving greater financial returns.
Last year the automotive industry sold a record breaking number of cars. All of the experts agree this trend is likely to continue with the development of auto markets around the world that are currently in their infancy, not to mention the aging fleets in more developed countries like Canada and the U.S. An even greater contributor to the future growth is the application and evolving use of technology in transportation, including aeronautical industries. There is little question despite the ups and downs of the world’s economy in general, Southeastern Michigan still boasts a high level engineering legacy, knowledge and talent needed to meet industry demands in automotive, aeronautical and military related industries.
Growth & Expansion: Under new ownership and management the company can increase net profits by taking the following actions:
1. Hire one or possibly two outside sales persons to cultivate new business and take advantage of current contracts that are sitting in one of their file cabinets.
2. Outsource basic HR functions for contract employees that would deliver immediate savings.
3. Replace the CFO with a capable Controller
4. Broaden company’s ability to solicit business from the aeronautic Industry.
5. Reduce the office space by 1,500 square feet as the office has excess office space
6. Move all computers to cloud computing to reduce Cap X expense
7. Reduce IT support as the move to the cloud takes place requiring less of this specific expertise
8. Remove the CEO and replace with a Director of Sales and Business Development
All of these steps are very basic and uncomplicated. The final suggestion would be to change the compensation system to be more reflective of pay for performance. We would be glad to discuss this further with serious buyers who would like to move forward and take the next necessary steps to do so.
Company has tremendous potential, by simply driving more business, reducing costs as outlined in the above and leveraging current customer relationships to expand the business. Currently, company’s shortcoming is the absence of active ownership as the owner has not worked in the business for more than ten years, moreover, the company lacks the leadership interest necessary to grow the business. Currently, there is little interest authored by the CEO in growing the business. The company, from a leadership perspective, has been skating on its past accomplishments and not pursuing new opportunity. Despite this, from a very reasonable perspective, the company has performed very well and rewarded its owner and CEO handsomely for little or no effort or sacrifice.
New leadership and direction can leverage the assets and its key customer relationships, developed over 25 years, to grow the company significantly in a relatively short period of time. This company is a business opportunity waiting for new leadership and the drive necessary to build upon its past successes. It is widely accepted in the manufacturing marketplace as a very highly rated resource for human capital in the manufacturing industry and simply needs small steps to grow revenue significantly.
Report an issue with this listing
The information in this listing has been provided by the business seller or representative
stated above. BizBuySell has no stake in the sale of this business, has not independently
verified any of the information about the business, and assumes no responsibility
for its accuracy or completeness.
terms & conditions before responding to any ad.