Office Furniture Heaven was a New York based office furniture company. The Company’s key differentiator was focus on design and personalized service. Their strategy was to leverage strong relationships with small to midsize suppliers and offer wide variety of products and custom design capabilities. While achieving revenue growth, the Company needed tighter management over its operations.
Office Furniture Heaven was originally started under its previous ownership and it had changed ownership when ArgoMetrix was engaged to help the Company with its operational management.
Sales were generated from delivering mid to large size office configuration projects. The entire business was based on forward ordering by customers. Delivery would take place approximately three (3) months after an order was received. Order fulfillment would include design services and eventually would be concluded by delivery and installation of a custom office configuration. While the business model did not require carrying inventory, Office Furniture Heaven would end up holding inventory during the order fulfillment process. The value of stock held at any point. though on behalf of its customers, would reach significant levels.
In addition, the Company’s growth strategy relied on expanding its sales force, for which the hiring was sporadic and relied on subjective screening of the interviewer. This limitation caused Office Furniture Heaven to either have inconsistent hiring practices or simply delay in expanding the sales team thus slowed down growth.
More importantly, due to the ownership change, the Company’s financials needed restructuring. Coupled with the need for operational procedures, the new ownership was struggling to identify the areas of opportunity for growth and create a strategic plan.
Office Furniture Heaven had strong relationships with contractors, who would handle the warehousing, delivery and installation of orders on behalf of the Company. However, strict workflow and operational procedures were not in place due to the lack of expertise in these areas.
Finally, the accounting structure had to be upgraded to highlight the true cost structure of the products and services for accurate margin controls. In addition, selling expenses had to be identified to verify the revenue model was healthy and scalable. While the Company had low overheads, the cost of the commission-based sales team needed to be managed more efficiently.
Once the restructuring was completed, we implemented the migration of the existing accounting structure to inventory-based accounting. In the process, we had to constitute strict record management on creation of product records and set up workflow rules for movement of inventory items.
These changes enabled the Company to be able to see the true financial standing of the organization while closely monitoring revenues, cost of goods sold, selling expenses and overheads. Various checks and balances were put in place to ensure accurate reporting.
We then moved onto creating a hiring process. The new ownership put a premium on company culture. Therefore, applicants had to be assessed primarily for their soft skills. We identified the necessary assessment tools and created a screening process. This included a series of well-designed interviews by involving the core team members in the interview process. Well proven interviewing techniques were incorporated into the hiring process with objective scoring systems.
Finally, we helped the new ownership develop a strategic plan by identifying the areas of opportunity to drive sustainable growth. This strategic plan was later translated into a financial model. The final step of this stage was to establish Key Performance Indicators (KPIs) for monitoring the financial performance of the Company and maintain alignment with the strategic and financial plan.
Our actions ultimately resulted in:
- Full conversion of the Company’s financial management and tighter controls over its operational procedures.
- Growing sales team with a robust hiring process, which delivered highly qualified candidates essential to the Company’s growth.
- Migration of their current order management system to an industry specific platform with accurate inventory management and CAD capabilities.