The situation
N1 Home is a Latvian online retailer offering over 20,000 furniture and interior products.
Despite strong sales and a solid order pipeline, N1 Home faced unexpected cash flow pressure, limiting the company's ability to plan future growth or attract external funding. While revenues appeared strong on paper, liquidity was deteriorating due to increasing refund volumes and working capital strain.
The company was at risk of stalling operations without a clear explanation as to why the cash position was weakening.
Our approach
Identify the underlying drivers of cash flow leakage, stabilize the company's runway, and prepare N1 Home for investor discussions by clearly articulating both the problem and the path forward.
- 1Conducted a detailed cash flow and working capital analysis to trace discrepancies between sales, delivery timelines, and cash availability.
- 2Identified exceptionally high customer returns, primarily caused by extended delivery times, as the key driver behind cash outflows.
- 3Modeled multiple operational and financial scenarios to assess the impact of delivery optimization, return reduction, and revised payment structures.
- 4Developed a unit economics model for each product to understand margins.
- 5Created a comprehensive investor pitch deck explaining growth plans, revised financial projections, and scenario outcomes.
Outcome
- Full clarity on the causes of cash flow challenges and a clear roadmap to stabilize operations.
- Investment attraction readiness: data-driven investor pitch and financial model.
- Detailed COGS analysis to identify unprofitable products.
Engagement timeline
Diagnose → Build → Deploy → OperateConducted a detailed cash flow and working capital analysis to trace discrepancies between sales, delivery timelines, and cash availability.
Identified exceptionally high customer returns, primarily caused by extended delivery times, as the key driver behind cash outflows. Modeled multiple operational and financial scenarios to assess the impact of delivery optimization, return reduction, and revised payment structures.
Developed a unit economics model for each product to understand margins.
Created a comprehensive investor pitch deck explaining growth plans, revised financial projections, and scenario outcomes.
Before & after
- Despite strong sales and a solid order pipeline, N1 Home faced unexpected cash flow pressure, limiting the company's ability to plan future growth or attract external funding.
- While revenues appeared strong on paper, liquidity was deteriorating due to increasing refund volumes and working capital strain.
- The company was at risk of stalling operations without a clear explanation as to why the cash position was weakening.
- Full clarity on the causes of cash flow challenges and a clear roadmap to stabilize operations.
- Investment attraction readiness: data-driven investor pitch and financial model.
- Detailed COGS analysis to identify unprofitable products.
Artifacts delivered
What the founder walked away withDiagnosed a hidden returns leak that was draining the bank.
