October 31, 2005

American Management Services was chosen as a Platinum Partner by the Conference for its reputation as the nation’s premier management services firm specializing in profit enhancement and complete turnarounds for small to mid'sized businesses. American Management Services, through the Partner America™ program, has conducted 54 successful small business turnarounds within the past year alone. In all, more than 6,000 small businesses across 400 industries have improved their profitability through the work of American Management and the Partner America™ program.

Below is a recent example of a Partner America™ successful turnaround:

L.A. Lacy, a longstanding plumbing and heating contracting company based in Charlottesville, VA was on the “verge of bankruptcy”. Revenue had fallen drastically since 2000 and, after reporting a loss of over $1.2 million in 2001, ownership saw their equity in the company completely wiped out and were forced to borrow large amounts of money simply to keep the business afloat. L.A. Lacy President, Daniel Kim, realized his business would fail if it continued in its current direction and was relieved when the Partner America program offered assistance in bringing the company back to a state of profitability.

American Management began by conducting The Business SurveyTM, identifying key problems affecting L.A. Lacy’s profitability. Problems included: a cash flow crisis that was preventing the company from taking discounts or negotiating prices on material purchases and causing the company to overpay on supplies; high employee turnover and a dire need for proper labor controls, with ownership estimating the company was losing at least one hour per day for each employee due to mismanagement and a lack of scheduling procedures; and the absence of a formal business plan to guide ownership in preventing uncontrolled growth.

After The Business SurveyTM was complete, American Management’s profit improvement team went to work to correct the problems identified at L.A. Lacy. They met with the company’s bank and key vendors to develop realistic payment plans that would eliminate its debt without filing for bankruptcy protection. American Management was so successful in these negotiations that they were able to secure a new line of credit, even though the company had previously been cut off from any additional funding from its creditors.

After implementing systems to establish employee accountability and eliminate operational mismanagement and with new job cost controls in place, L.A. Lacy saw its annual profit increase by $420,000. Furthermore, new labor procedures resulted in an additional savings of $134,800 per year. Through the efforts of American Management Services, Kim and his associates recognized a three-year profit improvement of $1,664,400. L.A. Lacy was no longer insolvent, had reestablished strong relationships with its creditors, and ownership could once again reap the benefits afforded by a profitable business. Kim said of the experience, “L.A. Lacy would not be performing at the level it is today if not for American Management Services. We would not have the luxury of working hard and planning for the future.”

American Management Services through the Partner America™ program has assisted many small business owners in transforming their struggling operations into the profitable companies they desire to be.

For more information on the Partner America™ program please contact Jeffrey Bean, Managing Director at jbean@usmayors.org.