Results

Transforming Financials Through Strategic Operations

At Kratzer Consulting, we specialize in helping small and mid-sized businesses improve operational efficiency, profitability, cash flow, and long-term value. A couple of recent client engagements showcases how strategic investment and innovative process improvements can radically change a company’s financial outlook in just a few years.

Case #1

The Challenge

Back in 2021, the business was generating $14.7M in revenue but faced low gross margins due to operational inefficiencies.

In addition, cash flow was negatively impacted by past due Accounts Receivable and high inventory.

Our Approach

Working closely with leadership, we helped the client implement a series of strategic moves:

  • $1.4M investment in automation to streamline operations
  • $800K increase in annual R&D spend to strengthen product innovation
  • Implementation of a collection process to reduce A/R.
  • Implementation of demand forecasting to lower inventory levels

By the end of 2024, EBITDA had grown from $486K to $1.39M, nearly tripling.

EBITDA Growth

This growth drove a massive jump in business value. In 2021, the company would have sold for approximately $2.9M. Today, it’s set to sell for $10M (cash-and debt-free), an outstanding exit for the owners and stakeholders.

Sell Value

The Results

  • $2M reduction in COGS, resulting in a $900K increase in EBITDA
  • $600K reduction in Accounts Receivable
  • $100K reduction in Inventory
  • Additional Operating Cash Flow was used to pay down both short-and long-term debt

Financials

What This Means for You

Even in a flat revenue environment, the right investments in process implementation, efficiency improvements, and working capital management can unlock powerful financial results. At Kratzer Consulting, we don’t just improve numbers, we help change outcomes.

Case #2

From Debt-Burdened to $18M Valuation in 4 Years

When a company is burdened with high debt, low margins, and poor cash flow management, growth is out of reach. However, with the right strategy, transformation is possible. Kratzer Consulting was hired to help one such company completely reset its trajectory and set itself up for an $18.4M debt-free sale.

The Situation

In 2024, this business had substantial revenue at $45.6M, but with weak profitability, rising debt, and cash flow bottlenecks. With $5.7M in long-and short-term debt, the company’s value was effectively underwater, worth only $5.8M based on current EBITDA, not even enough to clear its liabilities.

The Plan in Action

We developed and executed a multi-pronged strategy:

  • Revamped pricing model to win market share
  • $2.4M investment in sales professionals to drive top-line growth
  • Inventory and warehouse optimization, reducing excess stock, and improving fulfillment
  • Vendor management system to secure better pricing and payment terms

The outcome?

With a healthier balance sheet and tripled the EBITDA, the business is on track to sell for $18.4M debt-free, a complete turnaround from a position where debt outpaced valuation just four years earlier.

EBITDA Growth Projection

Projected Sell Value

The Results

In just four years (2024–2028), the company is projected to:

  • Increase Gross Profit by $9.1M despite slimmer margins
  • Grow EBITDA from $970K to $3.1M
  • Slash DSO from 50 to 33 and DIO from 71 to 39, accelerating Operating Cash Flow
  • Pay down short- and long-term debt.

Financials

What This Means for You

If your business is facing cash flow pressure, debt, or stalled growth, strategic pricing, smarter inventory controls, and targeted investment in sales can reset your entire path forward. At Kratzer Consulting, we help companies move from financial stress to financial strength.