The 6 key areas to consider

Transcription

1 The 6 key areas to consider

2 If your goal is anything but profitability if it s to be big, or to grow fast or to become a technology leader, you ll hit problems Michael Porter The Institute for Strategy and Competitiveness, Harvard Business School.

3 Your Hosts today Steven Heller DFK Laurence Varnay Sydney Gavin Johns DFK Hirn Newey Brisbane

4 Local knowledge. National Connections. Global Reach. 15 firms in Australia and New Zealand 214 firms in 92 countries worldwide Business structure & set up Business valuations Due diligence Accounting, tax, compliance assistance Strategic Planning Workshops

5 It s our goal today to: Educate and empower you with the knowledge of how to improve your business profitability. You'll leave this webinar with new ideas and strategies to implement.

6 We are covering: 1) Master the numbers 2) Leverage your greatest asset 3) Make your working capital work for you 4) Embrace change and technology 5) Know your customers 6) Identify and avoid profitability drains

7 Quick Background Polls First

8 1. Master the Numbers

9 Master the numbers The best indicator of future performance, is past results! Be careful of data that is more than 3 years old. What are the best sources of information? Internal? External?

10 Master the numbers What are the best sources of information - Internal Existing KPIs Management Accounts of your business Budget Summary of key product lines or sources of revenue Summary of performance of key suppliers

11 Master the numbers What are the best sources of information - External Industry Benchmarks Example: ATO Small Business Benchmarks Example: Australian Bureau of Statistics Example: Small Business Development Centres Understanding of the current economic climate

12 Master the numbers A new action plan! Choose 3 key change drivers that you believe will immediately improve the profitability of your business whilst not harming your long term business strategies Develop a plan to monitor your changes.

13 Bonus Handout Financial Spotlight By attending the webinar today, you can download our Financial Spotlight spreadsheet It is a tool for you to undertake a detailed financial analysis of your quarterly results for 2016 and 2017 (with annual comparatives for ) Instructions are contained within the spreadsheet We encourage you to use this financial spotlight as a basis for discussion with your advisor to better assist with formulating your action plan to improve profitability

14 2. Leverage your greatest asset

15 Leverage your greatest asset Your team are at the coalface of the business They know what works and what doesn t They deal with customers and suppliers They can drive profitability By properly leveraging your team, you can achieve more without the need to spend more to do it!

16 Leverage your greatest asset Communicate with your team. Upskill your team s sales abilities. Undertake debriefs on specific tasks or transactions. Develop systems & checklists for them so that they can work more efficiently and take less time to train. Empower your team; given them responsibility, authority and accountability to make things happen.

17 Leverage your greatest asset Other strategies to maximise productivity through leveraging your teams: Consistent and ongoing feedback Recognise successes (they don t need to be major) Share the big picture Start to build trust Provide career growth opportunities

18 3. Make your working capital work for you!

19 Make your working capital work for you! Freeing up working capital will result in increased profitability, for example: - Gives you the ability to pay down debt to reduce finance charges and increase net operating profit. - Results in improved credit rating and increased capacity to borrow to fund future growth. - Gives you the ability to re-invest in your business through additional capital expenditure. - Affords you the ability to pass on savings to customers to improve competitiveness and increase market share.

20 Make your working capital work for you! Debtor Management improvement tips if applicable Take the time to credit check new customers saves you a lot of grief later Use technology to invoice faster & get paid faster

21 Make your working capital work for you! Creditor Management improvement tips: Don t settle your creditors too quickly pay things when they are due and not before. Negotiate extended payment terms from suppliers. Negotiate discounts for early payments. Negotiate bulk discounts & volume rebates

22 Bonus Handout Working Capital Checklist By attending the webinar today, you can download our Working Capital Checklist It includes our Top Tips for improving your management of debtors, creditors, stock and finance. We encourage you to review the tips to find strategies that could you help you improve working capital management in your business.

23 4. Embrace change & technology

24 Embrace change & technology Review your current systems can these be improved? Be open to change! Consider what new technology is out there to help you do what you do only faster! Your goals with embracing change and technology should be: To make your workforce more productive To make your business and team more compliant; and Ultimately to make the business more profitable.

25 Embrace change & technology Embrace the Cloud consider new cloud based technologies in the following areas: Customer billing and payment systems Customer Relationship Management Systems Automated payroll systems Human Resources Systems Document Management Systems

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27 5. Know your customers

28 Know your customers Generally, it costs more to find new customers than it costs to retain and improve your profitability through existing customers. Immediate steps to improve profitability from existing customers, include: Is the amount you charge commensurate to the value added Meet with your key customers - understand their needs Remind customers of everything you offer Act on opportunities to upsell to existing customers Ask your key customers for favourable referrals

29 Know your customers Further steps to improve profitability from existing customers, over the medium term include: Determine who your most profitable customers are and what makes these customers the most profitable Seek feedback from your existing customers and improve future transactions Instil a culture of exceeding your customers expectations Targeted marketing efforts (to attract your preferred customers)

30 6. Identify and avoid Profitability Drains

31 The most common drains to fix Inappropriate processing are you using the right person, for the job? Unnecessary motion OH&S issues Defects do the job right the first time

32 Don t reinvent the wheel Do what you do only more consistently! Document procedures Use operation manuals Consider structured job briefs and debriefs (apply what you learn both when things go right and wrong) Why does this matter in terms of a discussion on profitability? Improves team efficiency Improves customer experience (consistency) Reduces business risk by reducing errors and accidents

33 What to do Next? Master your numbers analyse the results Develop an action plan to start improving profitability What needs to change; Staff? Better working capital management? Procedures or technology? Who is responsible; & How will your success be measured? Make sure you set aside time to work ON your business not just IN it! Go for it and don t be afraid to ask for help!!

34 How else can DFK ANZ help? Strategic Planning Workshops Business structure & set up Business valuations Due diligence Accounting, tax, compliance assistance External, non-executive director services Regular coaching meetings

35 Maximise your Profitability Thank you for attending our Webinar Questions are welcome! *This material is not advice. You should not act solely on the basis of material contained herein. Due to the speed of developments in tax law and the summarised, general nature of this material, we recommend our formal advice be sought before acting in any of the areas covered in this material.

36 Question time