Friday 31 August 2012

The Myth about Growth

To SME Owners

Yes we here all the time , must grow the business, lets look at this with a certain mindset.

-why do you want to grow,
-how do you want to grow,
-can you control how your business grows( most owners, in my years of being in the game,
struggle with this)
-sales reps bring in business that does not "fit" with the business positioning.

Growth is an ego thing, with it, it brings material things, not bad, bigger is not always better!
Please get a handle on what key drivers create your growth, this will help you "manage growth"better.


With growth comes the need for more operating costs, scalability is important, same as critical mass,
economies of scale.

BUT the one key trick is YOUR Capacity to manage, lead, and handle the Growth Change,
have you got what it takes, yes this is the foundation, or you have a great team around you.
Otherwise growth is a myth.

So have at the top of your agenda always, the word Growth, why and how.
Till next time may the Force be with you, I am your silent partner helping you work on your business.

Tuesday 28 August 2012

Sales vs cash flow vs Grossprofit

SME Owners

Lets have a close look at the above and the impact on your business, it is important for your
staff to understand also.

I have chatted before about sales mentality vs business mentality, here's what it is about, in a
 simple approach.


Many business/sales people say "how can I grow the business by turning away sales", the wrong type of sale could negatively affect the business trust me.
The first rule do not allow your GP% to slide, when this happens you believe that higher sales at lower than targeted gp% is the answer, no incorrect move.

Any one can drop their price, why then do business still not achieve their sales targets!
Level of profitability is the key, so if you want and need to make say, R50k npbt pm, work backwards,
-Normal sales target is say R500k pm, Gp% is say 60% operating costs pm areR250k (50% of sales)
leaves 10%( R50k pm npbt)
- Lets say GP% drops to 40% what sales do you have to do to achieve R50k npbt pm, go work it out.

Yep ok is it as simple as this, yes( their are always exceptions to the rule, I don't focus on this)

So Sales will have to be at R750k at 40%Gp with op costs static at R250k.

Till next time may the Force be with you, I am your silent partner helping you work on your business.

Friday 24 August 2012

Measure your Results

To SME Owners

The past few days I have been putting the final touches to my workshop presentation, running
them once per month in Joburg"Is your business going nowhere slowly" plus spent time in
Joburg seeing clients.

Six months in the financial year nearly gone( march- august) time to see how you measure
your results.Quite easy if you know the key numbers to focus on in your business.

Here's the deal, watch out for Analysis Paralysis, but as I understand it you need a sound process,
most of your products will have some clients, plus will show some growth, plus some good results.

That's the trick, identifying which ones is the key, so one needs to cut out the emotion when analysing your numbers. Most SME Owners are optimistic by nature, you should be, but could it be a downside!

So when looking at your numbers, understand, how you are growing, why you are growing, are you growing in the right areas, I have a model which helps with the above,

Reality Check 303, works 99% of the time.
Till next time may the Force be with you, I am your silent partner helping you work on your business.

Wednesday 15 August 2012

SME Marketing Communications B2B


To SME Owners

If you want to go this route as part of your Build strategy here are some areas to give you Focus.

-What do you want to achieve from implementing MCB2B, list the 4 key objective,
-Have a feel for the budget, it is an INVESTMENT, not a marketing cost,
-Time frame and timing,TIMING is critical.

Who are you going to be targeting.

Part of the above is deciding how to allocate your resources(money and staff) among the MC you have chosen.

For B2B here are a few marketing communication tools, trade shows/ exhibitions, e marketing, yep
Ads in certain targeted magazine's, (if you go this route, to create momentum need to sustain your investment) social media (LinkedIn, this takes many hours of dedication to achieve ROE)

Most sme businesses use sales promotion, in the form of sales reps(selling function) that's their budget done and dusted as the saying goes, very little funds left for all the Fancy stuff.

So yes sales team training, managing, developing and controlling takes up most of your time.

Till next time may the Force be with you, I am your silent partner helping you work on your business.

Sunday 12 August 2012

Hold or Build Strategy

To SME Owners

In the recent past I attended a talk by a top SA business guru, most of us there run sme businesses.
Some good points were covered, but I did not agree on the point that sme's need to have 3year financial plans/ budgets, yes have a 3, 5, 10 year vision.Most sme businesses are just trying to get through the next 6 months in this Different Economic Climate.( there are exceptions to the rule)

Following on from a previous post on strategy, two main strategies come into play,

Hold strategy- this could include, selective new product development, use of guerrilla tactics
to confuse the opposition( I am doing this with a client of mine, on price with some of the opposition clients selective approach, plus one or two other tricks),selective product enhancements, more focused market segmentation, to name a few, set up strategic partnerships.

Build/Growth strategy- innovation/  new products, new packaging, branding,diversify, social media investment(time and money) aggressive sales action plan, increase sales force, to name a few.

So I hope I have given you some simple but effective areas to think of, there are two things to take into consideration, where your business in it's life cycle and cash flow status, plus your leadership capacity.

Till next time may the Force be with you,I am your silent partner helping you work on your business.

Sunday 5 August 2012

Fire some Clients

To SME Owners

In one of my earlier posts I chatted about attracting the right clients, we all know that when you first start your business, in most cases it is to get clients, any type. Yes you have to build a client base!

So now you have been in business for more than five years, it is time to look very closely at your client base.I am sure you put clients on "stop supply" if they go beyond their payment terms, no
I thought not.(Ok there are exceptions to the rule)

Suppliers put you on hold, or fire you, so why not the same for clients, oh the client will go to the opposition.

Here's the deal, if your client is not profitable and a good payer you should be looking at your client
acquisition focus.Clients may even come back to you once they have tried to " play games" with their new supplier, and you may be able to charge them more!
Firing clients is good for the business, it gets the reps to really look at clients in a different way, helps reps to be more strategic(I covered this in a post on my sales blog)
http://www.guyssalesinsights.blogspot.com

There are different ways to go about implementing your fire policy. give it some thought.
Till next time may the Force be with you, I am your silent partner helping you work on your business.

Wednesday 1 August 2012

Leadership and your SME Business Part 2

To SME Owners

Here is a follow up on yesterdays post, as you may have gathered Leadership to me and you is so critical for laying the success foundation.

Your team needs to know your Values, they should also give input on what the values of the business are.( how they see it)
I like to keep things SIMPLE so you can move with speed to IMPLEMENT.

So what are some of the values,
      - mutual respect,
      - open minded,
      - integrity,
      - use of initiative,
      - take responsibility for the quality of work produced.
To name a few.

The above then forms the foundation of the business culture, which means simply,
     Culture is not in the job, it is in the ATTITUDE to the job, the values are the key to behaviour
and this moves to having the RMA(right mental attitude)
      So the culture is how things are do in the business.

Yes the values may need to change slightly over time depending on, the business maturity of the business and experience of the team.
Till next time may the Force be with you, I am your silent partner helping you work on your business.