Articles Tagged ‘Business planning’

Attack 2013 With These Key Questions

Thursday, December 27th, 2012

Well, we pretty much know now that the overall national economic activity isn’t going to improve much in 2013. Nationally, we are still faced with many challenges: huge unemployment, growing national debt, overspending and a national anti-business agenda. Economists in general are also stating that 2013 is going to be much like 2012, even in Indiana.

The business mine fields are many for Indiana business owners, and as you develop your strategic and financial plan for 2013, here are 31 pre-planning questions that will help you be more successful.

1.Where are we likely to finish (sales/cash flow/profits) in 2012?
2.What went right this year?
3.What went wrong this year?
4.What should we have done in 2012 that we didn’t do?
5.What did we do in 2012 that we should not have done?
6.What are our remaining three biggest sales problems?
7.What will be the consequences if we fail to overcome them?
8.What new initiatives (sales, marketing, organizational structure, cash flow, financing) should we explore? (tip – restructure your balance sheet and dramatically improve cash flow)
9.Besides solving problems and launching new initiatives, what must we do better than we’ve done in the past?
10.What can we do, for example, to insure that we will attain 100% of our monthly revenue targets?
11.How can we increase margins? (tip – setting and measuring gross profit margin targets is a proven winner).
12.How can we reduce Account Receivables and get cash in quicker?
13.Where are we wasting and/or spending too much money?
14.What can we do to maximize non-traditional revenue streams?
15.Where is our largest “growth market”, how are we going to identify that target market, and how are we going to sell them?
16.How can we do a better job of prospecting for new customers?
17.How can we improve the revenue from our regular and biggest-spending accounts?
18.How can we up-sell smaller accounts with big-account potential?
19.Should we consider any changes in organizational structure?
20.What additional people do we need for 2013?
21.What additional other resources do we need for 2013?
22.What additional training do we need to improve performance?
23.What “unique expertise” that is not available from our competitors – can we offer our customers?
24.What standard of performance have we set for our salespeople?
25.How do we get the sales staff to buy into our 2013 goals and strategic game plan?
26.What can we do to better manage each salesperson for the good of the company?
27.How can we make our employees jobs more enjoyable? (idea – training to better understand how people think and communicate – we are all different).
28.What annual profit target is realistic for 2013? (idea – ROI should be at least 30%).
29.What monthly profit targets should we set to attain your annual profit goal?
30.What monthly cash flow targets should we set for 2012?
31.Does this management team believe our goals are realistic and therefore achievable? Why?
32.Am I willing to commit, without reservation, setting aside 2-3 hours every month to work on my business? (tip – best thing you can do to grow and improve your business).

Set yourself up for success in 2013 with a specific, written, monthly plan.

Dan Lacy
Growth & Profit Coach, Financial Strategist, Cash Flow Doctor, CEO Mentor
dan@dynastybuilder.com
phone: 765-644-8887

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Decision Paper

Tuesday, April 17th, 2012

ScottManning

A few years ago at the bookstore I ran across this fun gimmicky little notepad called “Decision Paper”. The concept was making a list on either side of a line down the middle of the all the good things, “pros,” and the bad things, “cons,” on either side, then determining which side had the most items and making your decision.

I first learned about this from reading Benjamin Franklin’s autobiography where he discusses this process of making decisions when decisions are not always obvious or more logic is needed to be applied, using this method.

Also, in sales training, some Zig Ziglar programs also used this as a closing technique.

It’s a good one, at least it helps to keep things in perspective. I recently
thought about this idea related to assisting someone in making some major life
decision that they have been back and forth on for months. Simply, it’s such a
significant decision while emotions change like the weather, the logic and life
impact of it all would be served well by a list of pros and cons and then applied to
each alternative in the decision.

Now, in full disclosure you must not rely only on the quantity of items on either
side of the line, rather you must also go back and weight each item in terms of
priority or impact or significance or meaning, etc.

Because each item on your list is not created equal in terms of importance. Just
like not all opportunities are created equal, not all customers are created equal,
not all to-do items on your list are created equal, and on and on.

That’s why those who are happiest and most successful in all things are people who
invest the majority of their time, effort, money, and most importantly emotion into
the highest priority and most significant values in their life.

This is why you must have a definite purpose aboutwhat you do and who you are and what you want out of life.

See, I told you last week decisions are easy once you have this, but you didn’t know
I would come back with the secret weapon to help you in all decisions from this
point forward. Pros and Cons and weighing each by priority and significance based on
your purpose and goals and objectives and aspirations and ambitions for life.

I do believe people who do not take into account FUTURE implications but live in
short sighted and/or short term gratification mode are those who find the inevitable
long life of regrets as their fortune.

So…when you are contemplating life and business decisions, when stuck, or lack
clarity is your vision, step back, sit down, grab a piece of paper and put your
options to the test…

Every decision matters.

After all, your future depends on them.

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Worry Less about Money with a Cash Flow Plan

Monday, November 14th, 2011

One of the biggest stresses in business ownership is having enough money. Enough money to pay employees, pay ourselves, pay vendors and pay for growth. Money is the grease that keeps the business machine running and if we are unable to lubricate our business adequately it does not perform well.

Here are some actual real world examples:

One of your long time customers wants to increase purchases by $50,000 a month; but need extended terms from 30 to 60 days. This represents a 30% increase in revenue for the next 12 months. Your line of credit maxes out on a regular basis. Should you do it?
You have an opportunity to purchase a new piece of equipment that will increase production and revenue by 20% a month. The equipment costs $300,000, revenue will increase $1,400,000 for the year, inventory and accounts receivable will increase $350,000. Profit is projected to increase $250,000. Should you do it?
Your industry is experiencing dramatic raw material price increases. You need to raise your prices to your clients but cannot raise them too quickly in fear of loosing customers to your competition. Your lender has already said they will advance you enough working capital to bridge the inventory growth and transition to the higher prices; but they want to see when you will be able to pay back the extension. How do you prove to the bank that this will work?
The best solution to these three and a hundreds of other “money” issues is the cash flow forecast. What is a cash flow forecast?

It predicts your uses and sources of cash on a monthly (or weekly) basis to determine if you have enough cash to operate effectively.
The forecast is predicated a lot on what you have planned or projected in your profit and loss statement – revenue, expenses and profit.
It also takes into consideration any cash influx or out flow that doesn’t affect your profit and loss statement – line of credit uses, principal debt repayment, distribution (dividends), accounts receivable collections and accounts payable days outstanding.
It is a forecast — so it can be updated any time you feel it is important to update your cash flow forecast. It is recommended that it be done at least monthly and for those companies with cash flow troubles – do it weekly.
How do you create a cash flow forecast? There isn’t a boxed software program that I am aware of that will create a decent, forward-looking cash flow forecast. Most of them have to be built on an excel spreadsheet. They are not hard to do; but they take understanding of how your business works and the critical elements of how cash flows through your business. Once you have one, you can use it extensively to help you answer questions like those I presented at the beginning of this article.

Dan Lacy
Growth & Profit Coach, Financial Strategist, Cash Flow Doctor, CEO Mentor
dan@dynastybuilder.com
phone: 765-644-8887

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