One of the nice things about Kent is his ability to ask the obvious question that we always seem to overlook. Having worked out that we need to start in the end in mind and also have a map our next task was to work out our financial starting position:
Having a weekly profit & loss report was helpful but did not give us all of the answers -
in particular, where have we been and how well did we do?
1. What was the total sales revenue for the last year (invoices/banked)?
2 What was the cost of the goods and services that we provided (Variable costs)?
3. What were our Fixed costs - expenses & overheads?
4. From this we can work out our gross profit - 1-(2+3)
5. As a small limited Company our Corporation tax rate (2011/12) will be 21%; setting aside 21% of (4) give us our net profit for the year - simple.
6. Now take the net profit figure (5) & divide by the total sales revenue (1) to work out a net profit figure - which is the maximum available to us as dividends.
Having worked out our figures for the last 12 months we then worked out a monthly plan - something that our book keeper can now keep up to date for us :o) - reflecting where we want to be in 12/24 months.
But what if our business was cyclical / seasonal rather than a straight line ? - simply adjust each month to reflect the expected turnover / costs.
Using an excel spreadsheet we are now able to monitor our progress and plan accordingly.
For our projections we started with our desired net profit (6)
We then did the tax guestimates (21%) to that figure
We then added in our anticipated expenses and overheads
This gave us our gross profit
We then worked out our Cost of supply / goods
Added together this gave us our target Sales Revenue turnover.
Now all that we have to do is use the map to take us from A to B
Wednesday, 31 March 2010
Saturday, 20 March 2010
Six Steps - Mastery
The Brad Sugars DVD 6 Steps is a "must watch" if you want to get anything out of your investment with Action Coach. Our coach Kent had a simple approach - no DVD and no coach - simple. I have to agree with him.
You don't build a house that you want to last without foundations and the same is true of building a profitable business.
Why are we in business?
Are we simply doing a JOB?
Has the work taken over our lives?
What happens when we are not there?
Spending too much time with sleeves rolled up working in the business?
We have all been there.
Most of us started out in business as a result of circumstances and we identified an opportunity - we may have done something similar for someone else previously.
Back in the 90's I was a senior manager working for a large Insurance Company. When ever a "big issue" cropped up the Directors would bring in external consultants - who would borrow our watch, tell us the time and give us a bill. The Directors were pleased as they could blame the Consultant if anything went wrong. The old adage - nobody got fired for buying an IBM applied. Following the umpteenth management restructure I was made redundant in the summer of 1999. That is my story - what is yours?
The first of the 6 steps is Mastery.
Start with the end in mind - where do we want to end up and what does "job done?" look like? Having a clear vision of what / where etc enables us to know which is the right direction.
Knowing what we want to achieve then work out timescales - 3,5, 7 years or sooner?
Having a map, compass and watch is very helpful, but without a means for doing the job they are pointless. What is our business model? What proceedures do we use and what can be replicated / enhanced? Should I be doing the work or should I be delegating more?
Do we have a clear idea of profit and costs? Can we identify our fixed costs and do we know the profit margins on our goods and services? What is our cash flow like and where would we like it to be?
Working with Kent we were able to identify and evaluate our starting position - and work out a plan of ACTION. A plan is just a plan - doing something about it is what really matters and then testing the results to see if we are on track.
Before each meeting, we would update our goal sheet on Google Docs. This formed the basis of our review meetings with Kent - ask him about his wiffle!?!
You don't build a house that you want to last without foundations and the same is true of building a profitable business.
Why are we in business?
Are we simply doing a JOB?
Has the work taken over our lives?
What happens when we are not there?
Spending too much time with sleeves rolled up working in the business?
We have all been there.
Most of us started out in business as a result of circumstances and we identified an opportunity - we may have done something similar for someone else previously.
Back in the 90's I was a senior manager working for a large Insurance Company. When ever a "big issue" cropped up the Directors would bring in external consultants - who would borrow our watch, tell us the time and give us a bill. The Directors were pleased as they could blame the Consultant if anything went wrong. The old adage - nobody got fired for buying an IBM applied. Following the umpteenth management restructure I was made redundant in the summer of 1999. That is my story - what is yours?
The first of the 6 steps is Mastery.
Start with the end in mind - where do we want to end up and what does "job done?" look like? Having a clear vision of what / where etc enables us to know which is the right direction.
Knowing what we want to achieve then work out timescales - 3,5, 7 years or sooner?
Having a map, compass and watch is very helpful, but without a means for doing the job they are pointless. What is our business model? What proceedures do we use and what can be replicated / enhanced? Should I be doing the work or should I be delegating more?
Do we have a clear idea of profit and costs? Can we identify our fixed costs and do we know the profit margins on our goods and services? What is our cash flow like and where would we like it to be?
Working with Kent we were able to identify and evaluate our starting position - and work out a plan of ACTION. A plan is just a plan - doing something about it is what really matters and then testing the results to see if we are on track.
Before each meeting, we would update our goal sheet on Google Docs. This formed the basis of our review meetings with Kent - ask him about his wiffle!?!
Wednesday, 17 March 2010
testing and measuring
Start with the end in mind is a great saying. But where IS the start? Where are we now and how well are we doing?
Our ActionCoach Kent is a burly South African and doesn't suffer fools or pull punches.
Surprisingly, many small businesses operated from a month to month basis with a tea chest for receipts and an Accountant that "did the numbers" once a year. The bank overdraft was a necessity of business and cash flow was a constant worry. Great at doing the work for a client but crap at issuing invoices and collecting payments.
One of the smart investments that we made years ago was to have a regular bookkeeper - who provided weekly profit & loss reports and kept invoices to clients under good control.
But did a regular P&L report tell the full story? Of course not. What Kent highlighted to us was the fact that we needed clarity of what worked and what didn't. When we invested in a marketing campaign how successful was it? What were the alternatives? We needed to identify our current position and then start REGULARLY recording our business performance - and then monitor against this our marketing strategies to see which worked and which didn't - simple.
Working with Kent we developed a dashboard that we all could access and review. Using Google Docs we were able to introduce a simple system for recording our Key Performance Indicators. The KPI's were relevant to our business and meant that we were able to put on a cross on the map - where we currently where - now all that was needed was to work out where we wanted to end up.
Our ActionCoach Kent is a burly South African and doesn't suffer fools or pull punches.
Surprisingly, many small businesses operated from a month to month basis with a tea chest for receipts and an Accountant that "did the numbers" once a year. The bank overdraft was a necessity of business and cash flow was a constant worry. Great at doing the work for a client but crap at issuing invoices and collecting payments.
One of the smart investments that we made years ago was to have a regular bookkeeper - who provided weekly profit & loss reports and kept invoices to clients under good control.
But did a regular P&L report tell the full story? Of course not. What Kent highlighted to us was the fact that we needed clarity of what worked and what didn't. When we invested in a marketing campaign how successful was it? What were the alternatives? We needed to identify our current position and then start REGULARLY recording our business performance - and then monitor against this our marketing strategies to see which worked and which didn't - simple.
Working with Kent we developed a dashboard that we all could access and review. Using Google Docs we were able to introduce a simple system for recording our Key Performance Indicators. The KPI's were relevant to our business and meant that we were able to put on a cross on the map - where we currently where - now all that was needed was to work out where we wanted to end up.
Sunday, 14 March 2010
Meeting three - DISC styles
This was a real eye opener - what Kent highlighted was the fact that there are four distinct DISC profiles:
D ominant
I nfluence
S teadiness
C ompliance
Each profile type indicates a different style of behaviour. As a tool, it can help when trying to understand other people's behaviour - how they may react and appreciate why they reacted in a particular way.
Having completed the questionnaire Kent was able to provide feedback on our individual scores - my internal profile came out at:
D 74%
I 60%
S 28%
C 51%
The style card indicated that I am a Balanced Driver; my primary traits being assertive and controlled.
So what I may here you ask?
Well typically, most people get on best with those that they mirror - which means that on a DISC basis 75% won't respond to our approach.
Simply by being aware of these four characteristic types, Kent was able to demonstrate to us that we could do something to dramatically improve our success rates.
Dominant - are results focused
Influencers - people based
Steady - team based solutions
Compliance - formal and technical.
Different strokes for different folks. By slightly modifying our approach we could improve our business relationships dramatically.
D ominant
I nfluence
S teadiness
C ompliance
Each profile type indicates a different style of behaviour. As a tool, it can help when trying to understand other people's behaviour - how they may react and appreciate why they reacted in a particular way.
Having completed the questionnaire Kent was able to provide feedback on our individual scores - my internal profile came out at:
D 74%
I 60%
S 28%
C 51%
The style card indicated that I am a Balanced Driver; my primary traits being assertive and controlled.
So what I may here you ask?
Well typically, most people get on best with those that they mirror - which means that on a DISC basis 75% won't respond to our approach.
Simply by being aware of these four characteristic types, Kent was able to demonstrate to us that we could do something to dramatically improve our success rates.
Dominant - are results focused
Influencers - people based
Steady - team based solutions
Compliance - formal and technical.
Different strokes for different folks. By slightly modifying our approach we could improve our business relationships dramatically.
Thursday, 11 March 2010
Week 2 - more on than in?
Starting to get the hang of this Action Coach approach - the Coaching Focus Sheet that we had to complete each period formed a basis for discussion for each meeting.
At the end of each meeting we uploaded onto Google Docs our 4 goals for the coming period. Prior to each review meeting we then had to update our progress against each of the four goals (not gaols Kent!) and the following:
Our brightest achievement for the period just past.
Our biggest (business) challenge.
Something that I have learnt (from reading; DVD etc)
Something that I would like my Coach (Kent) to help me with.
Both David & I complete these before each meeting - and as each week went by we started to see progress.
Having finalised the plan of meeting dates for 2010 we reviewed progress to date - we had weekly profit & loss reports in place unlike many small businesses. Our bookkeeper allowed us to focus on what we did best - looking after customers. But could we do better? Yes we could.
Did we know which of our services were profitable?
How good were clients at paying invoices?
What were our unique selling points?
What could we deligate and were there any aspects that we could automate / systemise?
What were our KPI's?
We soon realized that there was tremendous scope working smarter not harder.
Kent highlighted that we needed to get smarter and spend at least 5 - 10 hours a week ON the business rather than IN the business.
At the end of each meeting we uploaded onto Google Docs our 4 goals for the coming period. Prior to each review meeting we then had to update our progress against each of the four goals (not gaols Kent!) and the following:
Our brightest achievement for the period just past.
Our biggest (business) challenge.
Something that I have learnt (from reading; DVD etc)
Something that I would like my Coach (Kent) to help me with.
Both David & I complete these before each meeting - and as each week went by we started to see progress.
Having finalised the plan of meeting dates for 2010 we reviewed progress to date - we had weekly profit & loss reports in place unlike many small businesses. Our bookkeeper allowed us to focus on what we did best - looking after customers. But could we do better? Yes we could.
Did we know which of our services were profitable?
How good were clients at paying invoices?
What were our unique selling points?
What could we deligate and were there any aspects that we could automate / systemise?
What were our KPI's?
We soon realized that there was tremendous scope working smarter not harder.
Kent highlighted that we needed to get smarter and spend at least 5 - 10 hours a week ON the business rather than IN the business.
Our first meeting
Having had an hour telephone interview with my Action Coach Kent I was comfortable with what to expect for the first meeting.
Our first meeting with Kent lasted 4 hours and was a real eye opener and meant that Kent was able to gain a detailed understanding of our business model. We learnt about how the 6 steps were a journey to an end destination - and that all decisions either support or hinder our journey. Where were we and what did we want to achieve?
Did we know enough about our own businesses? If we didn't then nobody else would - we agreed that our initial homework for the first week would involve identifying the following:-
1. What our fixed costs were
2. All of the different revenue streams
3. Key Performance Indicators for the business
4. Dates in the diary for 2010 meetings.
The last point was one of those blindingly obvious opportunities - 2 Directors in 2 locations and never able to meet. We agreed to schedule in 12 months worth of meetings with Kent and catch up meetings.
We also looked at the paperwork that Kent left with us - and identified a simpler solution - using Google Docs as a basis for sharing documents and keeping them up to date. this would be a 2 way learning point for Kent too!
Our first meeting with Kent lasted 4 hours and was a real eye opener and meant that Kent was able to gain a detailed understanding of our business model. We learnt about how the 6 steps were a journey to an end destination - and that all decisions either support or hinder our journey. Where were we and what did we want to achieve?
Did we know enough about our own businesses? If we didn't then nobody else would - we agreed that our initial homework for the first week would involve identifying the following:-
1. What our fixed costs were
2. All of the different revenue streams
3. Key Performance Indicators for the business
4. Dates in the diary for 2010 meetings.
The last point was one of those blindingly obvious opportunities - 2 Directors in 2 locations and never able to meet. We agreed to schedule in 12 months worth of meetings with Kent and catch up meetings.
We also looked at the paperwork that Kent left with us - and identified a simpler solution - using Google Docs as a basis for sharing documents and keeping them up to date. this would be a 2 way learning point for Kent too!
Before you take the Field
This was an interesting step - Kent set the ground rules for using an Action Coach. Watch the 6 steps DVD or don't bother using an Action Coach - simple!
Having done as I was told I found time to watch the DVD - Brad Sugars is a smart cookie and clearly has found a way of helping businesses - would the concept help me?
Kent made it clear that we (like most other businesses) were spending too much time in the business and not investing 5 hours a week ON the business - "always do, what always did - always get what always got"
We were also not aware of how well we were doing - did we have a positive mental attitude and "play above the line"? Were we taking ownership of our opportunities - accept responsibility and accountability for our businesses?
Be a victor:
O Ownership
A Accountable
R Responsible
not a victim
B Blame
E Excuses
D Denial
To recap, Kent reminded us that the 6 steps to a better business were:
6. Results
5. Synergy
4. Team
3. Leverage
2. Niche
1. Mastery
Starting at the bottom was interesting!
Having done as I was told I found time to watch the DVD - Brad Sugars is a smart cookie and clearly has found a way of helping businesses - would the concept help me?
Kent made it clear that we (like most other businesses) were spending too much time in the business and not investing 5 hours a week ON the business - "always do, what always did - always get what always got"
We were also not aware of how well we were doing - did we have a positive mental attitude and "play above the line"? Were we taking ownership of our opportunities - accept responsibility and accountability for our businesses?
Be a victor:
O Ownership
A Accountable
R Responsible
not a victim
B Blame
E Excuses
D Denial
To recap, Kent reminded us that the 6 steps to a better business were:
6. Results
5. Synergy
4. Team
3. Leverage
2. Niche
1. Mastery
Starting at the bottom was interesting!
Subscribe to:
Posts (Atom)