Stage 1 – Identify where your business is now – your core activity in the business determines whether your business is in one of the following three categories:
1. RESCUE – You are a WORKER in the business and your focus is juggling cash
a. The business is losing money
b. You receive no salary
c. You are continually putting money into the business
d. You do everything – You are the business
e. You work IN the business putting out fires
The business is at a risk of closing down and you losing everything you have worked for.
A. Immediate attention with a number of strategies is required to release cash into the business
B. Leakage needs to be identified first releasing profits and cash floating within the business back into the business to stabilize the business before it’s too late.
FACT: 35 – 40% of all businesses fall within the RESCUE category.
2. IMPROVE – You are a OWNER in the business and your focus is stability and staff
a. The business is making money but not reaching its potential
b. The business has a stable cash flow
c. The business is well established
d. You would like to have more time to work ON the business
e. Owners receive salaries, but no dividends are paid
f. You have a high mortgage
g. The business has low value
A. Leakage or profits and cash floating within the business can be identified readily and put back into the business and the owner’s pocket.
B. Options available to properly strategize the growth path of the business and work on all critical areas to make it successful, more profitable and valuable.
FACT: 40 – 50% of all businesses fall within the IMPROVE category.
3. GROW – You are a DIRECTOR in the business and your focus is strategy and planning
a. The business is valuable
b. The business makes good money
c. The business has excellent cash flow
d. The owners receive generous salaries and the business pays dividends
e. The team is running the business
f. You have time to work ON the business
The business has opportunities to reach the next level.
A. The right strategies need to be developed with a clear plan, management and implementation of tasks across all areas of the business
B. These businesses need to be managed correctly for the growth – it is easy to be complacent, lose profits and slip back.
FACT: 0 – 15% of all businesses fall within the GROW category.
Stage 2 – Identify Leakage – Profits and Cash floating within the business and available to the business now from the current activities in the core areas of your business:
2. Cost Reduction
4. Staffing Levels
7. Stock Control
8. Sales & Marketing
9. Business Growth
10. Product Portfolio
FACT: Every business, regardless of size, has leakage – this is hidden profits and/or cash available to it now! This increases as the revenues increase.
CAN YOU AFFORD TO HAVE CASH OR PROFITS LEAK AWAY – 10% on average.
Stage 3 – Design, Develop and Implement a Strategic Business Plan – under a structured framework in three tiers:
1. Tier One
a. Business Planning – What do you want to achieve?
b. Vision Development – Goal of the business
c. Strategy Development – Roadmap to the goal – overview of the major strategies that will make the business successful
d. Structure Development – Organisation – Plant, Equipment and People
e. Culture Development – Motivate people to your vision and drive the business
2. Tier Two
a. Operational business development – how we are going to do this?
b. Products and Services – What we are going to offer to customers and clients?
c. Marketing and Sales – how are we are going to take the products to market and sell?
d. Finances – how we are going to forecast and manage cash flow?
e. Systems and Processes – how we are going to ensure smooth and efficient running of the business?
3. Tier Three
a. Ongoing performance management – Implementing the business plan, maintaining the progress and continually improving
b. Monthly strategy sessions – Implementing the tasks from the plan
c. Monthly management and board meetings – Reporting and measuring progress
FACT: If you can’t measure it, you can’t manage it.
d. Growing the business – continuous growth should be a focus
FACT: If it’s not growing, it’s slipping.
e. Maximising profit and value – monitoring leakage and realizing profits and cash floating within the business in the core areas of the business should be a constant activity
f. Additional Services – Identifying extra activities to strengthen the business and its position.