HM Manufacturing: Back from the brink

HM Manufacturing: Back from the brink

One of the greatest risks to your business can be hidden in plain sight, as my client, HM Manufacturing found out.

This is a story I believe is important to tell.  All too many times I have heard of companies, good companies, driven into severe hardship and even put out of business because of the actions of a few. In this 5-part series, I am giving you a look at a company who was on the brink of bankruptcy and how they fought to survive. 

A tale of two industries. One problem. HM Manufacturing a once thriving precision components manufacturing company and a thriving dental practice. They both discover a problem hiding in plain sight in their company’s. How do they find out? How do they survive? What would you do?

Numbers Don’t Lie

Several years ago I was meeting with a client and we were reviewing their numbers.  For some reason we couldn’t get the numbers to balance.  In fact they weren’t even close.  Our difference was over $60,000 and we couldn’t figure out why.

The owner wasn’t panicked as there was plenty in the bank account and all the expense numbers appeared to be in check.  We placed a call to the accountant to see if we were missing something.  After review, thInVision Business Development Blog Back From Brinke feedback was that it must be something in the management software.

Money was balanced on QuickBooks and the client had a separate practice management software handling the business side of things.  Since they accepted insurance we assumed it may be write-offs from the discount fees.  We brought the front office person in to go over the numbers and see if she had an explanation.

“I’m not sure,” she said, “It must be showing the difference in insurance fees.”

A few weeks later the call came in…

The Call

It was a Saturday morning when my client called and he was upset. He was headed out of town with his family when he received a call from a local bank. The branch manager notified him that someone had been coming in and depositing checks.

At first they didn’t think much of it until there was a question about one of the deposits. After reviewing the deposits one thing kept popping up. A female was coming in to deposit checks from my client.

A quick online check to see who, led my client to uncover something that is all to common in small to medium sized companies: my client was a victim of embezzlement.

Fortunately for my client this story has a (sort of) happy ending. The theft was caught early enough that it didn’t tank the business and his company is still thriving to this day.

The sad result is someone got away with taking over $250,000 over the course of eight years.

Trust was destroyed, money was lost, and it was a five-year ordeal to bring some closure to this. That’s enough to stress virtually any company to the brink.

HM Manufacturing: The Beginning

HM Manufacturing InVision Business DevelopmentA few years ago I met Nicole Wolter. She’s young, energetic, and also someone you would not picture running a precision components manufacturing business like HM Manufacturing.

Her family’s business was started in 1979 when her father, a chief engineer for another tool and stamping company, decided to take his passion for racing and start his own business manufacturing gears for the racing industry. The automotive work took off and went well until the late nineties.

At that time margins eroded and the company expanded into the food and beverage industry. Growth continued until the Great Recession.

As business dried up, HM Manufacturing fell on hard times. As they fought to survive another problem emerged.

Jobs were not profitable and for some reason work was constantly being lost to competitors. Nicole joined the business at this time to figure out what was going on. Her intent was never to join the company so she had a steep learning curve to understand how the business worked and why they were no longer profitable.


To be continued…
In Part 2 of this post, you will learn from Nicole in her own words what happened and what she had to do to save a company that was a few months away from bankruptcy.