The document details the turnaround of a distressed UK-based IT family business that faced severe financial challenges, including high indebtedness and a significant loss of revenue. Through strategic restructuring and improved management practices, the company regained profitability within 10 months, resulting in a potential sale valued at £750,000 and opportunities for further mergers. Key actions included renegotiating loans, reducing staffing, and implementing a new strategy to enhance profit margins.

1. !
"
CASE
STUDY
BUSINESS TURNAROUND OF
DISTRESSED IT COMPANY
HELLO
1

2. Igor Kalczynski
Professional Investor
EMAIL ME
My name is Igor Kalczynski. I’m a serial investor and business turnaround expert with
particular skills in increasing company valuations, mergers and acquisitions, and stock
market listings.
I’m a CEO of Kalczynski&Co Ltd, co-founder of IKLS Group Ltd and partner in BID Group
Global.
I work with CEO’s and owners of distressed and financially challenged businesses which
have more than £0.5m annual revenue, exhausted all possible financing options and
haven’t got a clue what to do next. By investing I help them escape the seemingly
inevitable insolvency and liquidation, increase their company value and get their
businesses ready for sale for considerably more money than what it was worth.
Mergers & Acquisitions
Business Strategy
Negotiations
Management
ABOUT ME
2
Hello!

3. 3
HOW I WORK
Step One
#
Step Two
$
Step Three
%
General discussion about the company, its
financial situation, past decisions and
what would future look like.
The Work. Let’s do something meaningful
together and start working towards new,
brighter future.
The Goal. Debt free, profitable company
at much higher value than before.
Let’s know each other better. The Work The Goal

4. 4
!
"
CASE STUDY: OVERVIEW
The company is a UK based IT family
business ran by 3 brothers for 20 years.
One of the biggest customers of the
business has been put in liquidation.
Th e co m p a ny l o s t 1 / 3 r d o f r eve n u e
generated from that customer and there
w a s c l e a r l y n o b a c k u p p l a n o r
contingency.
Overheads of the business were very high.
OVERVIEW

5. 03/2015
05/2015
07/2015
10/2015
Due
Diligence
Signed
Start of
negotiations
START
TIMELINE OF THE TURNAROUND
5
06/2016
After
9 Month
First
Meeting
&
Work
Began
"
PROFIT
Head of
Terms
'
( )

6. 6
DUE DILIGENCE
100% of credit limit used
and no more lending
options. Indebtedness
quite high and around
£415,000.
7 Weeks Behind Payments.
Essential suppliers
threatens to cut out their
services which would stop
company from operation.
15 staff members including
management. A few family
members employed. The
company badly overstaffed,
some people not needed at all.
Profit margin around 7%.
Very low profit margin as the
management were focused
on keeping company afloat.
Indebtedness
Creditors
Staffing
Profit Margin*☼
$
These problems were
our priority and had to
be addressed swiftly
and immediately.
, -

7. 7
100% of credit limit used and there
was no more lending options due
to adverse credit score.
Indebtedness was quite high and
around of £415,000. There were 3
commercial lenders loans:
HSBC - £115,000
Lending Circle - £65,000
Commercial Lender - £60,000
Personal Loans - £40,000
Main Suppliers - £65,000
HMRC/VAT -£70,000
Profit margin around 7%. It was
extremely low for the type of business.
The management was mainly focused on
keeping the company afloat so low profit
margin was not noticed.
Sales situations where quotation was
given but not all costs were included
was very common. Also, 3 cabling teams
were quite inefficient, jobs were delayed
and left unfinished. The petrol was a very
big cost as well.
Profit Margin
*
,
Indebtedness
DUE DILIGENCE: CONT.
!

8. 8
All creditors were 7 weeks behind
the payments. The directors were
getting letters and phone calls from
creditors threatening them to stop all
services essential for the business to
continue trading. If they pulled the
plug the company had no choice but
to stop operating.
Because of bad credit score there
was no chance to get another
supplier.
15 staff employed including
management. There were 5
management positions, 5 non
management office positions and 6
highly skilled positions.
The company was badly overstaffed. As
it was a family business there were few
family members employed who didn’t
really do anything. The same could be
said for some of the management.
Staffing.
Creditors -
DUE DILIGENCE: CONT.
☼
!

9. THE WORK
.
/
0
1
-
2
♥
4
9
Some business loans have
been renegotiated and/or
consolidated. Personal
Loans from directors were
written off and new invoice
finance company was
employed.
All Essential Suppliers
were paid off and they all
are back in terms regarding
payments.
4 team members were
offered voluntary resignation.
That included Financial and
Sales Directors.
To improve profit margins
new strategy was
implemented regarding
quotations and overheads
reduction.
Indebtedness
Creditors
Staffing
Profit Margin

10. 10
THE OUTCOME (AFTER 10 MONTH)
0 weeks behind the
payments. There are no
delays with supplier
payments or staff salaries.
Profit Margin has been
greatly improved thanks to
the new strategy being
properly implemented.
Consolidation and
renegotiation had a great
impact on indebtedness
level.
There was a cut in staffing
which lead to additional
cashflow improvements.
Payments Profit Margin Indebtedness Staffing
weeks
0
weeks
17%
£115,000
£
employees
11

11. 11
THE OUTCOME (CONT)
GET IN TOUCH
After just 10 month the company has been completely
restructured and turned around. The falling and virtually
worthless business is now thriving due to properly implemented
strategy. For the first time since 4 years the business is profitable
with a possible sale deal for £750,000. There is also a possible
merger on the table which would strengthen company further
and make it even more profitable.
PROFIT
For the 1st time since
4 years the company
is profitable.
"