Case study №8 – business advisory for a 3D printer start-up

Client

We were recently approached by a local entrepreneur, operating 14-month old business within the tech sector – more precisely, manufacturing and distribution of 3D printers. The proprietor sought out our help with evaluating the existing business model and approach, as well as mapping out future actions to be taken for developing a successful enterprise in the long-run. The first year reported revenue was BGN 248 000, with the following split: 35% manufacturing, 57% distribution (reselling) and 8% services.

Challenge

The client requested a review of their entity’s current position, performance and business model, as well as preparation of competition analysis, long-term development strategy and business plan (for internal and external purposes, including long-term financing). The client was particularly concerned about all the critical decisions to be made and actions to be taken, at this early stage of business development, which would potentially have deep long-term effects on their business. The proprietor needed a team of experts to make recommendations and comments on the progress made so far, as well as the future of the business – strategies for growth, expansion and moving forward.

Approach

We carried out multiple interviews with the proprietor and key personnel, spent time on-site and got familiar with the client’s product range. We performed a concise financial analysis of the current position and performance of the business, although this is not a common tool for analysing start-up entities. We reviewed and commented on the existing business model in the context of the current competitive environment, economic climate, industry fundamentals and market trends. We recommended several enhancements to the existing model related to product placement and pricing, introduction of new service line, supply chain optimization, more efficient staff allocation, etc. We produced a detailed business plan for the company to be used for attracting strategic investors and/or raising additional capital, through debt financing, which we assisted the client with. Finally, we spent a substantial amount of time on drawing a detailed 3-year plan (including precise timetable) for business development purposes – to be used as a strategy playbook by the owner. This timeline was meant to build on all positive aspects of the progress made so far and to introduce new concepts and actions to be taken in the mid-term, including the financing of certain aspects of the business, expanding the marketing efforts and sales team, diversifying supplier portfolio and improving the distribution network (mainly in terms of product placement and logistics).

Results

Our experts produced a detailed 136-page report (within 27 business days) with all our findings, observations, analysis and recommendations, as well as business plan and timeline. All key results and recommendations of the report were presented to the proprietor and key personnel in person. The company implemented most of our immediate-action recommendations and also accepted the recommended timetable. The business plan we delivered was put to good use within 2 weeks of completion and as a result the client was able to obtain a substantial (for the entity’s scale) 6-year business loan for purchasing manufacturing equipment, fixtures and fittings, ERP and sales software, mid-seized warehousing facility, several transportation vehicles, etc. The proprietor also managed to secure a substantial working capital credit line. The loan terms and covenants for both financing instruments were better than average for the market.