Nick Bettes Consulting

Revenue Resilience: A Simple Guide

2012-02-13T21:47:00.000-08:00

What is revenue resilience?

- Not all revenue is equally certain. A business which relies on winning a small number of large contracts each year may well earn the same revenue and profit as a business that gets its income from a large volume of contracted subscriptions and a third company that gets all its income from ad-hoc repair and maintenance across a moderate number of existing customers

o In theory, the riskier nature of the project business should result in higher profit margins (returns to the shareholders) and the stable nature of the subscription business, lower - but this is not always the case in practice

o Don’t confuse spreading payments for a project with spreading both the cost and the income by using a different business model. The first impacts cash flow and actually increases risk – so should require an even higher return.

- All other things being equal, businesses should strive for as much locked-in recurring revenue as possible

How can you translate one-off into recurring revenue?

- Some examples of spreading payments are

o A photocopier which is paid for by charging a small amount for every copy made

o Mobile phones, where the phone is given free in return for a fixed term monthly contract

- Each of these relies on a higher total income over the life of the contract to cover the cash flow hit and the risk of default. It is also necessary to build in a compelling proposition to renew the contract before it expires in order to build revenue resilience

- Some examples of additional recurring revenue are

o Software license maintenance

o Membership of a user group

o Subscription services

o Service and maintenance contracts

- An alternative way of looking at this is separating future income from resource or asset limitations

o Translate a single consultant’s time into a course to be sold online in perpetuity

What is the proposition for the customer?

- Possible benefits that would induce a customer to sign up for a long-term contract are

o Access to a continuous stream of new content

o Access to special offers and discounts

o A known fixed charge covering all repairs (a form of insurance)

o The right to free future upgrades

o Continuous tuning and maintenance of the original product

Customer concentration

- One final source of revenue risk is over-reliance on a single or a few customers – avoid this

www.nickbettes.co.uk

Why do you need a sales commission scheme?

2012-01-18T07:47:00.000-08:00

The underlying assumption is that rewarding salespeople financially for performance will encourage them to work harder and sell more in pursuit of those rewards. This view is not borne out by academic research but in practice sales commission schemes are almost universally used. A carefully-designed commission scheme when implemented on top of good management practices and a solid sales process is a useful management tool – but it is not a substitute for these things.

How to design a sales commission scheme

- Commission schemes are usually implemented at individual level

- Ensure that the rewards incentivise the behaviour you want. You may want different behaviours from an account manager and a sales representative

- Think carefully about the balance between basic salary and commission. The two combined form the OTE (on-target earnings) and the balance will have a strong impact on the motivation and behaviour of the salesperson:

o The lower the proportion of basic salary the higher the OTE, since you are transferring risk to the salesperson

o A high basic may mean that salespeople do not need any sales to achieve their minimum acceptable income

o A low basic may result in aggressive sales behaviours or high staff turnover

- Decide whether the scheme should be based on sales revenue or gross margin:

o Revenue is relatively easy to measure but may result in unwanted price discounting

o Gross margin supports prices but is more difficult to measure and can be open to manipulation

- Implement appropriate controls on the sales process:

o A pricing model or pricelist

o Sign-offs

o Commission payments only after contracts are signed

- Understand that every commission scheme will have unwanted side-effects:

o If a salesperson feels they are not going to achieve targets they will hold back new opportunities to the next year

o Individual targets will prevent salespeople working as a team or spending time on anything that does not contribute to the current target

o Salespeople will go after the easiest opportunities, which might not be the ones that matter most strategically

- Check that you can afford all possible outcomes and that better performance against the commission scheme results in improved net margins for the business under all circumstances

- Make sure that commission targets in total exceed the sales income budget – assume a conservative proportion of target sales will actually be achieved

- The overall commission scheme rules should be published annually and each salesperson should have a written copy of their own targets and rewards, signed by them and their manager

- Review performance with each salesperson monthly

Find out more about our business advice, business coaching and business consultancy for buusiness owners in Reading, Berkshire on our website.

Are you indispensible?

2012-01-09T13:02:00.000-08:00

Does every business decision have to be taken by you?
Are you unable to get away from the business for even a short time without things going wrong?

Ambitious business owners overcome many challenges to grow their business - but sometimes the biggest challenge is to make their business work without them. After the business reaches a certain point, owners find that their time, effort and knowledge is the main constraint on future growth.

They struggle to delegate anything meaningful to their staff, or develop their staff so tha they are ready for more responsibility.

This seminar "The Owners' Trap" will tell you how to break free of these constraints.

Learn how to raise your game by visiting my website.

Delegate to grow

2011-12-28T13:00:00.000-08:00

If you can't delegate you'll never grow your business past the point where you are working as hard as you can.

- Most business need more staff as they grow. Delegation is an essential technique for successfully distributing the tasks that you perform currently to these new staff

- One day your business will have to run (and continue to grow) without you. Even if this day is not in your plans yet, a resilient well-run business cannot rely upon one person

- Development and growth are great motivators for most people – so you should be actively seeking to increase the responsibility you give to your staff

- Your objective should be to delegate everything you do

How do you delegate successfully?

- Classify your staff to assess their readiness for delegation – plot knowledge & ability against attitude, decide who is ready now and what needs to be done to ready the others

- Evaluate what you could or should delegate – and start with the assumption that everything could be delegated if you really wanted to

- From the above two points identify who could do what

- When you have chosen someone, clarify what the value proposition is from both sides – what would you gain and what would they gain. Why would they want to do it?

- Clarify expectations

o Timescale

o Definition of success

o Level and limits of authority and responsibility

- Give them time to come up with their own plan to achieve this – and then agree it together

- Communicate the change and the reasons to all staff (and externally as necessary)

- If necessary provide time management or other training

- Once you have delegated, plan and carry-out regular reviews

o Provide guidance so they stay on track

o Share your experience

o Give praise and feedback – make sure they are learning

o DON’T take it back at the first sign of trouble

When not to delegate:

- When you don’t understand the problem

- When it’s too late

- Key tasks that amount to “ownership”, such as setting strategy, values and culture

What stops you delegating?

- Fear

- Lack of trust in others

- Insecurity about your own role, capabilities and knowledge

It’s about LEADERSHIP.

This seminar "The Owners' Trap" will give you techniques for effective delegation - as well as the other steps you need to take to take your business on to the next level..

Learn how to raise your game by visiting my website.

Trouble finding quality staff?

2011-12-15T12:57:00.000-08:00

Frustrated that your staff can't do things as well as you do - or don't care enough to?

Are you resigned to your business staying the same size because you have no more hours to give and you just can't find anyone to take on some of your workload?

Maybe you need to learn about motivating staff...

- Motivated staff are more productive
- Motivated staff are more positive and helpful to customers

- Motivated staff are easier to lead and will take responsibility for things that otherwise you will have to do.

This seminar "The Owners' Trap" will give you techniques to motivate your staff - as well as the other steps you need to take to take your business on to the next level..

Learn how to raise your game by visiting my website.

Feeling the strain?

2011-12-07T12:55:00.000-08:00

As your business grows it doesn't just get bigger. It gets more complicated. More staff, Bigger, more demanding customers. More rules. Trying to manage through other people. Delegation.

You'd go mad trying to run it the way you used to run a small business - or give yourself a heart-attack. And you'd fail, and go back to being small.

There is an alternative. Learn how to manage a big business at this business advice seminar.

Or take a look at our business advice website.

Follow-up for sales!

2011-11-30T02:41:00.000-08:00

Sales is all about moving an opportunity through a process that takes it from the first contact through to sale and beyond. Two things are implied: Firstly, you have to have a process (that is a repeatable series of steps from first contact through to close – a pipeline) and secondly, you have to do something to move an opportunity through the pipeline – the follow-up.

The follow-up is therefore a defined and repeatable action that kicks-in whenever an opportunity needs to be moved through the pipeline. For instance, when you meet someone at a networking event your follow-up might be a) send an email saying how much you enjoyed your conversation about topic x and b) add them to your database for future newsletters.

If someone subscribes on your website your follow-up might be an automatic email with latest offers.

If you finish a job for a client your follow-up might be a phone call three months later to discuss any other requirements.

An effective follow-up will be:

-          Consistent and controlled rather than left to chance or whim
-          Persistent (without being irritating)
-          Personalised, even if automated
-          Related to the prospect’s needs, not your product’s features
-          Designed to move the opportunity on in a specific way. For a suspect, say, to establish whether they do in fact have a need for your service. For a prospect, to establish whether they have the money – and so forth
-          A call to action
-          Intriguing and original
-          Via an appropriate medium, or mixture of media
-          Recorded, analysed and the results fed back into the design of the process

A CRM (Customer Relationship Management) system will help you define and control this process – but you can do it quite simply without one. What you can’t do without is a documented sales process and a bit of organisation.

Get more great business tips at http://www.nickbettes.co.uk.

Systemise to grow

2011-11-23T12:52:00.000-08:00

One of the key changes you need to make to grow your business beyond you is to systemise it.

This will not only make it easier to find, recruit and manage staff it will make your business more valuable. m The value of a business depends on its growth prospects, profitability, cash conversion and the degree to which that future cash flow is at risk

One of the main risks for small businesses is their reliance upon key personnel, particularly the owner, who know and do things that no-one else knows or can do. This risk is present even if you have no plans to sell the business. If you the owner or one of your key staff are unable to work for an extended period what happens to your business?

Systemisation is the process by which the processes of the business are documented and standardised and reliance on any one individual is removed. This process also makes a business scalable; the processes can be replicated, additional staff can be selected and trained and the business can grow beyond the constraints of any one person

Find out more at this seminar "The Owners' Trap", which will explain how this and other changes should be implemented to help you to take your business on to the next level..

Learn how to raise your game by visiting my website.

2011-11-16T09:56:00.000-08:00

Frustrated that your staff can't do things as well as you do - or don't care enough to?
Are you resigned to your business staying the same size because you have no more hours to give and you just can't find anyone to take on some of your workload?

Maybe you need to learn about motivating staff...

- Motivated staff are more productive
- Motivated staff are more positive and helpful to customers
- Motivated staff are easier to lead and will take responsibility for things that otherwise you will have to do.

This seminar "The Owners' Trap" will give you techniques to motivate your staff - as well as the other steps you need to take to take your business on to the next level..

Learn how to raise your game by visiting my website.

Key man blues??

2011-11-01T09:53:00.000-07:00

Are you concerned that the growth of your business is limited by your available time and effort?Worried that you need to grow to afford more staff - and need more staff to grow?
To break free from the Owners' Trap you need to do the following:

1. Systemise your business
2. Get your staff to want what you want
3. Learn how to let go
This seminar "The Owners' Trap" will tell you how to do this.

Does incentivisation work?

2011-10-17T05:30:00.000-07:00

The IoD Berkshire branch had an interesting discussion on this topic recently. Here's my take on the subject:

The underlying assumption is that rewarding employees for achievement (usually financially) will encourage them to work harder and achieve more in pursuit of those rewards. This view is not borne out by academic research but in practice bonus schemes are widely used. A carefully-designed bonus scheme when implemented on top of good management practices in a well-run business is a useful management tool – but it is not a substitute for these things.

How to design an incentivisation scheme

- Incentivisation schemes can be implemented at individual, team or organisation level or use a combination of these

- Ensure that the rewards incentivise the behaviour you want, are tied to outcomes the employees can affect and match the motivations of the employees concerned (which may not be financial). For some staff it will not be possible to link performance directly to financial outcomes (for example a customer support desk)

- Understand that as circumstances change every incentivisation scheme will have unexpected and often unwanted side-effects

- Check that you can afford all possible outcomes

- The maximum bonus should be enough to recognise over-performance but restricted in terms of total earnings - a maximum of 50% of basic salary, usually far less

- Tie individual bonuses to overall company performance ie an overall profitability hurdle must be achieved before individual departmental performance related pay kicks in. The downside of this is the fact that good performers might not get what they deserve but at least it avoids the situation where you can’t afford to pay

- Bonus payments must be self-funding within the bonusable period; that is; they must be more than covered by the improved profit delivered by the over-achievement which triggers the bonus payment

- Make sure that base and bonus targets match the business plan and budget

- Link bonus payments to profit not turnover – and cap them

- Bonus payments should be at the absolute discretion of management

- You might want to add other desirable outcomes to the scheme. For instance, you could make “100% of department having a job description and appraisal” or “Complete project X” bonus targets

General

- The overall bonus scheme rules should be published and each individual should have a written copy of their own targets and rewards, signed by them and their manager

- Bonus targets should be agreed as part of the business planning cycle and before the start of the year concerned

- Performance against targets should be reviewed as part of the appraisal and performance management process immediately after year-end

- If in doubt, keep it simple

Find out more about our business advice, business coaching and business consultancy for buusiness owners in Reading, Berkshire on our website.

Can your SME develop a brand?

2011-10-10T04:14:00.000-07:00

What is a brand?

- It is the shared reaction that it evokes in the people that matter to your business – customers, prospects, employees, suppliers

o It is what they say about you when you aren’t there

o It is the way they have come to expect you to behave

o It is their assessment of your values and beliefs

o It is the feelings they associate with their interaction with you

o It is the stories they tell about you

- It is the things you do to support the reaction

o The kind of people you employ and the way they behave

o The kind of customers you target and why

o The values and beliefs that you run your company by

o The processes you use and how well they deliver the kind of product or service your brand promises

o Your style – of communications, dress, language and premises

- It is the collection of artefacts that represent your business and trigger the reaction

o Logos

o Website

o Company or product names

What are the benefits of having a brand?

- You will be at the top of their list (or the front of their mind) when a prospect thinks about buying what you sell

- It reduces perceived risk in the mind of the prospect – “No-one ever got fired for buying from IBM.”

- It multiplies your marketing – people find it easier to relate, and relate to, stories about feelings and a strong brand is shorthand for shared feelings about a company

- It makes you more referable if you have a widely-accepted positive reputation – there is less risk in recommending you

How can an SME develop a brand?

- As with all marketing, a brand is only of any use if you know what your target market and value proposition are

- You cannot buy a brand – you have to live it and demonstrate it first so that your customers and employees develop the brand through what they say and do

- It’s about coherence and congruence – be clear on who you serve, why and how; be clear about the values and beliefs that are important to you, your staff and your customers

- Make sure that this comes through in everything you say and do, from marketing to invoicing, from the website to the way customer services answer the phone

- Ask the people who matter (employees, customers, prospects, suppliers) why they chose you and what they think about your company. This is your brand.

Why do you need a business strategy?

2011-09-16T08:06:00.000-07:00

Companies with clearly defined strategies on average beat their competition by 304% in profit margin and 332% in sales over a ten-year period (William Joyce, Nitin Nohria, Bruce Roberson, What Really Works [book] (New York: HarperBusiness:2003)

The #1 cause of bankruptcy is bad strategy (Paul Carroll and Chunka Mui, “7 Ways to Fail Big,” Harvard Business Review (September 2008)

70% of a company’s poor performance is due to decisions about strategy (Matthew Olson, “When Growth Stalls,” Harvard Business Review (March 2008)

BUT

85% of executive leadership teams spend less than one hour per month discussing their strategy, with 50% spending no time at all (Robert Kaplan and David Norton, “The Office of Strategy Management,” Harvard Business Review (October 2005)

80% of top management’s time is devoted to issues that account for less than 20% of a company’s long-term value (Michael Mankins, “Stop Wasting Valuable Time,” Harvard Business Review (September 2004)

Only 3 out of every 10 managers are strategic (Harris Interactive Survey of 154 companies, 2009)

(I found these great points on Strategy Espresso http://www.strategyskills.com/blog/ run by Rich Horwath.)

If you don't have a business strategy - you need one now!

Understand that your task as the owner is to make your business - not to make the widgets

Start with a clear long-term Vision for your business and turn this into some strategic objectives

Then describe your Mission – who do you serve and how?

- Describe your market

o What needs do you serve and in which sectors?

o Are you addressing the most attractive needs and sectors?

o What will happen to those needs and sectors over the next five years?

o Will addressing these needs and sectors deliver your objectives?

- Describe how well you fit the market

o How are you able to serve those needs and sectors uniquely well?

o Are there needs and sectors that you are better able to serve which you currently neglect?

o How do you need to change to take advantage of the anticipated changes in your markets or to address more attractive markets?

- Describe your business

o What are your core competences and are they going to remain relevant? If not, what do you need to learn or acquire?

o Where are your weaknesses or single points of failure? How are you going to address these?

o What additional or different resources and processes will you need to achieve the necessary customer and financial outcomes?

- Turn the necessary actions and the desired outcomes into a business plan

Embed this strategy process (the learning, change and survival process) into the business cycle and management routines

There are loads of strategic techniques to help you develop your strategy. This seminar will take you through a few of them.

Feeling the management strain?

2011-09-12T02:26:00.000-07:00

As your business grows it doesn't just get bigger. It gets more complicated. More staff, Bigger, more demanding customers. More rules. Trying to manage through other people. Delegation.
You'd go mad trying to run it the way you used to run a small business - or give yourself a heart-attack. And you'd fail, and go back to being small.

There is an alternative. Learn how to manage a bigger business at this business advice seminar.

Or take a look at our business advice website.

No strategy will equal no business

2011-09-06T02:28:00.000-07:00

Only 3 out of every 10 managers are strategic (Harris Interactive Survey of 154 companies, 2009).
-The #1 cause of bankruptcy is bad strategy (Paul Carroll and Chunka Mui, “7 Ways to Fail Big,” Harvard Business Review (September 2008).

-70% of a company’s poor performance is due to decisions about strategy (Matthew Olson, “When Growth Stalls,” Harvard Business Review (March 2008).

-85% of executive leadership teams spend less than one hour per month discussing their strategy, with 50% spending no time at all (Robert Kaplan and David Norton, “The Office of Strategy Management,” Harvard Business Review (October 2005).

-80% of top management’s time is devoted to issues that account for less than 20% of a company’s long-term value (Michael Mankins, “Stop Wasting Valuable Time,” Harvard Business Review (September 2004)

-Companies with clearly defined strategies on average beat their competition by 304% in profit margin and 332% in sales over a ten-year period (William Joyce, Nitin Nohria, Bruce Roberson, What Really Works [book] (New York: HarperBusiness:2003).

I found these great points on Strategy Espresso http://www.strategyskills.com/blog/ run by Rich Horwath.

They really resonate with me when I think about my SME owner clients. Few of them spend any time at all thinking about strategy - and many of those that do don't really have the tools or knowledge to make it work.

If you'd like some help with setting a strategy for your business contact me at my website or book up for this great seminar.

Looking for investment?

2011-09-05T02:23:00.000-07:00

Are you looking for a bank loan or business angel to fund your business growth plans?
Do you understand the kind of things they look for in a company before they will invest?

Do you know what government finance is (still) available and how you qualify?

These are big issues. Succeed or fail issues. Don't leave it to chance - talk to us.

As a first step, get yourself on this business advice seminar or take a look at our business advice website.

Clear business direction?

2011-08-29T02:21:00.000-07:00

Clear direction - a vision, mission and strategic objectives - is essential for any successful business. Business owners ned to know:
· The importance of a motivating and guiding vision for any business and how to construct one
· Ways to turn your Vision into a compelling Mission for your staff and customers
· How to identify and set concrete Objectives that will keep you on track towards your goal whatever happens
· Why growth is not optional - and why unplanned growth will damage your business – and why growth itself brings challenges
· What successful business owners spend their time doing – and not doing

If you'd like to learn how to do this then this seminar is a must: The Journey to Success

More information on my website: http://www.nickbettes.co.uk/

8 ways to your unique proposition

2011-08-26T06:19:00.000-07:00

Price

- This can be low price if you have a unique process or advantage that will always keep your costs below the competition’s. If not then competing solely on price is suicide

- This could be high price if you have a luxury product which is in demand by people who want to be seen as able to afford exclusivity

Speed

- This can be fast (for example food or deliveries) as long as you have a process which always delivers faster than anyone else

- This could be slow (for example fine dining or whisky) as long as the wait is seen as part of the pay-off for the buyer.

Newness

- In the technology or gadget market some people buy things simply because they are new. Some businesses compete on performance (for example computers or phones) so they need innovation from their suppliers

- Oldness can also be a selling point – think antiques, or retro, or reliability

Convenience

- Petrol stations can charge more for essential items than supermarkets because they are next to the road and have parking. Convenience could also mean opening hours or home delivery or anything else that makes it easier for the customer

- Being a one-stop shop

Range

- Both breadth of range and numbers stocked can be a powerful USP. If a customer is pushed for time or in a fix they look for the place that always has what they need on the shelf.

Expertise or specialism

- The ultimate is to be seen as a specialist in a field of one. This is really what defining a niche is about; making yourself a specialist.

Quality and Service

- Never the word “quality” or “service” but a deep understanding of what attributes represent quality and service in your market and a proposition which not only delivers on these but uses these terms to resonate with the customer.

Reliability

- This is about understanding your prospects deepest fears about your product and addressing them through a unique guarantee, your longevity or testimonials

Find out how to get more great business tips here

Find out more about increasing the value of your business here

Selling your business?

2011-08-22T02:17:00.000-07:00

Preparing in the right way could get you 2-3 times as much for your business.
Getting your company fit for sale could mean the difference between getting nothing and getting a great multiple. Getting your company fit for sale will make it easier and more rewarding to run while you still own it.

It's what you as a business owner should spend your time doing.

Make a start. Come to this business advice seminar.

Raise your business game

2011-08-15T02:15:00.000-07:00

· Reached the point where you are no longer confident about the way to to drive your business forward?
· Need money from an investor or bank to fund your growth plans but unsure how to go about it?
· Started to wonder if you or your management team need to understand more about business to achieve your goals?
· Worried about how you will achieve the best price when you sell your business?

Even successful and ambitious business owners sometimes find it hard to remember why they started their business. Dealing with day-to-day issues can swamp the big picture, leaving you struggling to keep on track and unsure about when and how you will realise the rewards for all the hard work you put in.

We can help you raise yoru game to overcome these barriers - and we're running this great seminar to explain how.

More good business advice on our website.

Do you have a clear direction?

2011-08-09T02:13:00.000-07:00

Clear direction - a vision, mission and strategic objectives - is essential for any successful business.

Business owners ned to know:
· The importance of a motivating and guiding vision for any business and how to construct one
· Ways to turn your Vision into a compelling Mission for your staff and customers
· How to identify and set concrete Objectives that will keep you on track towards your goal whatever happens
· Why growth is not optional - and why unplanned growth will damage your business – and why growth itself brings challenges
· What successful business owners spend their time doing – and not doing
If you'd like to learn how to do this then this seminar is a must: Business Owners - Your Journey to Success

More information on my website: http://www.nickbettes.co.uk/

Are you still serious?

2011-08-02T02:11:00.000-07:00

It's simple. There are two different types of business owner. Those who think it's their job to produce widgets (or build websites, or fit boilers, or sell insurance...) and those who think it's their job to build a business.
The first type are really just self-employed. The second type are the true business owners. They are focused on driving their business forward. They spend time thinking about how they get to the next step. They invest in their company and themselves so that they can achieve that next step - because they know that it will take a bigger strategy, a better plan, a tighter operation and more teamwork.

These business owners will spend time planning for when they come to sell their business. Or maybe they're wondering about getting money from a venture capitalist, business angel, government agency or bank to fund growth plans. They recognise when they reach the point where they and their management team become the limitation on the company's growth and they need to step back and change the way the busines operates. Success in any of these scenarios requires them to raise their game.

If you're one of the second type (true business owners) then you recognise the value of getting expert help and this event is for you https://www.eventelephant.com/businessownersyourjourneytosuccess

How to build a great team

2011-07-14T08:24:00.000-07:00

As a business leader it is your role to get the most from your staff. You must become the team coach, not the centre-forward. You must create the conditions for your team to succeed whilst striving to remove any dependency on your own efforts or technical knowledge. Here are some guidelines for creating a successful team.

- Define a shared, clear, worthwhile purpose for the team – and continue to reinforce this

o Define clear boundaries for the team and empower every member to question things within those boundaries (not only in their own area of responsibility)

o Define the desired outcomes. Make these challenging but not demoralisingly difficult

o Make sure there is regular, objective, actionable feedback on team performance

o Make improved team functioning, or dynamics, one of the desired outcomes

- Create wholesome team dynamics*

o The foundation for any high-performing team is trust amongst the members. People must feel able to be open about fears and failings and to give and receive honest feedback

o Trust enables constructive conflict, which is necessary to surface and explore options and arrive at optimum decisions

o Constructive conflict, where everyone has had their opinions heard and debated, allows buy-in from all members to the agreed team goals and decisions and their part in delivering them

o Because individuals have bought in to the team goals and decisions, individuals are prepared to be held responsible for delivering their elements of the plan and to hold fellow team-members accountable in turn

o Shared goals and mutual accountability means that the team is focused on results

- Build in diversity amongst the members

o Don’t allow superstars to rule the roost. Everyone, including them, puts the team first. If your star performers can’t understand and deliver this then drop them from the team

o Make sure everyone recognises their own strengths and weaknesses and those of their colleagues. Make sure they understand that great teams are made up of individuals with complementary abilities

o Respect amongst members starts with individuals having self-respect. Make sure everyone understands how their contribution is valued and inculcate a sense of belonging and feeling of achievement in all team members

- Create pride within the team

o Look for opportunities to build the team’s respect and reputation in the wider organisation and beyond

o Create opportunities to build team coherence beyond the task – perhaps through social bonds

o Acknowledge and reward their achievements

*Based on “The Five Dysfunctions of a Team”, Patrick Lencioni

Business modelling for SMEs

2011-07-04T08:50:00.000-07:00

Is there a model for improving SME performance? Certainly there are lots of business models out there beloved of management consultants and business advisors. The former tend to use models developed by academics for the corporate world which can be thought of as "tools for thought"; the latter tend to use models developed primarily as sales tools: "If we could show you how to increase your turnover by 10%, your margin by 10%..." and so forth.

Both can be useful for an SME owner but both have drawbacks. Corporate models often assume a complexity in the organisation and market, an intellectual curiosity in the client and a depth of implementation resource that do not exist. The less sophisticated tools on the other hand are often based on a few financial ratios that are assumed to be new to the business owner and which provide only a limited platform for real long-term improvement of the business.

What is needed to augment these tools is something that bridges the gap. A tool rooted in the daily realities of the SME owner that also makes bigger canvases accessible. A tool which can deliver simple, practical, high-return changes quickly but also provide a platform for continuing dialogue and development. A tool which is supported by the advisor but controlled by the business owner and applied as appropriate to their starting point and progress.

If you'd like to know more about this tool and how we use it to help SME owners then take a look at our website.

You have a business plan - so use it.

2011-07-04T03:42:00.000-07:00

So you have built your business plan. What now?

Assuming that you built the plan in order to provide a routemap to your business goals then the plan should form the basis for your management reviews from now on

- In order that you can use it to manage the business the plan should contain

o A detailed month-by-month budget for the first year

o Monthly sales targets

o Monthly marketing targets

o A small number of other monthly KPI targets covering customers, operations and staff

- The monthly management review should

o Be attended by the staff responsible for the above areas

o Follow a set agenda

o Be scheduled and diarised for the year ahead

o Take place as soon as possible after the month end once the necessary figures have been produced for the previous month and year to date

§ Management accounts

§ Sales figures

§ KPI performance

o Identify variances from plan, identify causes and specify remedial actions

o Record actions against an owner and deadline

o Review progress against previous agreed actions

- The quarterly plan review should

o Revise the forecast outturn for the year based on performance to date

§ In bigger businesses this may result in a revised budget against which to measure in future management meetings

o Identify any significant remedial actions required to align with the new forecast, such as redundancies or new premises

o Be scheduled, minuted and followed-up as per the monthly meetings

- The annual strategic review should prepare the new business plan

If you'd like to know more about developing a business plan then this event is for you.

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Is your business plan STILL insane?

2011-06-27T02:56:00.000-07:00

In business planning, sensitivity analysis is a way to sanity-check the assumptions underlying your plan

- It identifies the variables that have most impact on the outcome of your plan (for instance, sales volume or materials price)

- In this table, your plan is shown in the “base case” column

	Previous year	Base case	Variance	Best case		Worst case
	Previous year	Base case	Variance	Variance	£	Variance	£
Volume of sales	600	660	10%	12%	672	0%	600
Average unit price	£9.09	£10	10%	10%	£ 10	-5%	£ 9
Sales income	£5,454	£6,600	21%		£ 6,719		£ 5,181
Average unit cost	£6	£6	0%	0%	£ 6	10%	£ 7
Direct costs	£3,600	£3,960	10%		£ 4,032		£ 3,960
Salaries	£1,800	£1,800	0%	0%	£ 1,800	0%	£ 1,800
Rent	£720	£738	2.50%	0%	£ 720	5%	£ 756
Net profit	-£666	£102			£ 167		-£1,335

- The best case assumes that you can achieve the best possible values for all the main variables (volume of sales, materials prices and so on) given all you know about the market, your competition and other relevant factors

- The worst case assumes the opposite and that you achieve the worst possible values for the same variables

- A credible business plan will be based somewhere in the middle of these two outcomes

- A credible plan will specify what arrangements you have in place to

o Ensure that you achieve the best values you can for the variables identified

o Minimise the impact should key variables go against you

If you'd like to know more about developing a business plan then this event is for you.

Get more great business tips on our website.

Is your business plan insane?

2011-06-20T02:27:00.000-07:00

In business planning, variance analysis is a way to sanity-check the assumptions underlying your plan

- It compares the planned or forecast figure to the equivalent figure in a previous comparable period – usually the previous year

- It expresses the difference as a percentage

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	Previous year	Budget year	Variance	Assumptions
Volume of sales	600	660	+10%
Average unit price	£9.09	£10	+10%
Sales income	£5,454	£6,600
Average unit cost	£6	£6	0%
Direct costs	£3,600	£3,960
Salaries	£1,800	£1,800	0%
Rent	£720	£738	+2.5%
Net profit	(£666)	£102

- Your wider business plan (strategy, market positioning, sales performance, supplier management and so forth) must then provide an explanation for any difference

- This will expose any assumptions you have made and the potential impact on your business should they prove to be wrong

- In the above example, the plan is based on increasing the number of sales as well as the price whilst holding unit costs and salaries to the previous year’s level

- These might all be reasonable and achievable but a credible business plan must explain how and why these things are going to happen

If you'd like to know more about developing a business plan then this event is for you.

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What do lenders want to see in your business plan?

2011-06-13T11:13:00.000-07:00

What would you want to know if someone you didn't know asked you to lend them a large sum of money? Probably you'd want to know a) the likelihood of getting your money back and b) the return (profit) you would make.

Your business plan is the story that provides this information to your potential lender. I'm using the term "story" in the sense that it needs to be an interesting, rational and coherent explanation of what is going to happen - not in the sense of a fable. The first person you must convince with your business plan is you; if you can't do this, or can't be bothered to, then take my advice - don't borrow any money.

Banks have money to lend, and want to lend it - but only to businesses that they believe will be able to pay it back. In addition to the basic elements of a business plan (see previous blogs), lenders and investors want to see:

- A description of your management team - experience in the company and the industry, achievements & responsibilities;
- For an investor: The required investment and the % shareholding offered, existing shareholdings and shareholder agreement;
- For a lender: The required loan, the proportion of forecast profit the repayments will represent and any existing loans, mortgages or charges, the value of assets in the business

If you'd like to know more about developing a business plan then this event is for you.

Get more great business tips on our website.

The business planning process

2011-06-06T10:49:00.000-07:00

Logically you should start with your vision and long-term goals. However, most people find it easiest to start the writing process with numbers - your forecast turnover, in fact. Working through a simple financial forecast covering, say, three years and matching your vision or strategic goals allows you to get the business planning process started. The numbers provide a spine for the plan around which you can flesh out the strategy, marketing, sales and so forth.

As well as turnover, the financial forecast should include direct costs and overheads (and so tell you gross margin and profit). If you sell different product lines or to different markets then this split should be shown. The major cost drivers should also be shown separately.

Once you have this basic model you can start to consider how you are actually going to deliver it. How will your marketing and sales processes deliver the revenue you are forecasting? What is the basis of your direct costs figure? Will the level of overheads support the size of business you are plannning?

These considerations come together in the story of your business that is your business plan.

If you'd like to know more about developing a business plan then this event is for you.

Get more great business tips on our website.

Options for financing your business

2011-05-31T02:12:00.000-07:00

There are a number of different ways to obtain finance for your business. When deciding which route to take you should consider the use to which the money is to be put, who carries the risk and the overall cost.

All of these questions should be addressed by your business plan, which should include detailed profit and loss, cash flow and balance sheet forecasts. The rest of the plan should underpin the numbers and cover marketing, sales, HR and operations. Any lender or investor will want to see this before they make a decision.

Option	Description	Who takes the risk?	Relative cost	Remarks
Bank loan	A fixed amount advanced and paid back over 1 – 5 years	The business – unless the bank makes you sign a personal or director’s guarantee in which case it is you	Low (depending on interest rates)
Bonds	A fixed amount advanced, fixed interest paid over 5 – 20 years and then the advance paid back	The business	Low	Only available to larger companies
Investor	You sell part of your business in return for a lump sum	The investor	Zero to very high depending upon the future value of your business	The investor will want representation and may want some day to day involvement. Implies you are able to put a value on your business now
Factoring and invoice discounting	The factor advances a proportion of each sales invoice as it is issued and the balance (less a fee) when the customer pays	The factor – as long as the business follows agreed rules.	High	Factoring includes outsourcing the sales ledger process. Invoice discounting does not. Not usually available to very small companies. May include bad-debt insurance at a price
Overdraft	An arrangement to allow you a negative bank balance for short periods	The bank	High if done over extended periods	Very flexible
Hire purchase or leasing	A third-party pays the supplier for the equipment and then recovers the money from you over a fixed term	The business	Medium	HP, finance and operating leases are treated differently in your accounts
Lines of credit	Your suppliers accept delayed payments from you	The supplier	Low	Ties you in to the supplier
Grants	Various government and other initiatives	The grant-giver	Zero to low	There will usually be restrictions on the uses to which the funds may be put
Sale and leaseback	You sell fixed assets for a cash injection and then pay the buyer for continued use of the assets	The business	High - depending what happens to the market value of the asset and future interest rates	Builds in long-term committed recurring costs
Business credit card	Use a credit card issued to the business and set up a direct debit to pay it off in full each month	The card issuer	Zero if fully paid off each month – high otherwise	Flexible and gives up to 30 days interest-free credit each month up to an agreed limit

Calculating the best financing route for your business can be complicated. You need to understand what would happen under at least three scenarios – best case, worst case and most likely case. This is best done using a cash flow model on a spreadsheet.

Remember that flexibility (future options) has a value in itself. The greater the uncertainty about outcomes the more you should seek a flexible financing solution.

You can also invest more of your own capital in the business – either in the form of a loan or by purchasing equity (by issuing more shares). There are also less formal routes to funding for very small businesses such as borrowing from friends and family.

If you'd like to know more about developing a business plan then this event is for you.

Get more great business tips on our website.

Using SWOT to build a business plan

2011-05-30T10:41:00.000-07:00

When you are building your business plan then a SWOT analysis can really help you chack your assumptions and address riska in the plan. The purpose of the SWOT analysis is to consider how well the organisation is equipped to deal with, or take advantage of, its internal capabilities and external changes.

Complete the following table and then, for each factor you have identified, decide whether it is necessary and feasible to take action. If it is, the action should appear as an objective or project in the business plan.

Note that this approach can be used for individual products or markets as well as for the complete organisation.

Internal – relating to your company when considered against your competitors and what your customers want
Strengths		Weaknesses
External – the impact of changes in the market in which your company operates
	Opportunities		Threats
Political
Economic
Social
Technological
Legal
Environmental

If you'd like to know more about developing a business plan then this event is for you.

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What should go into a business plan?

2011-05-23T10:34:00.000-07:00

A basic business plan for internal use only should contain the following sections:

- Executive Summary

o Written last, a brief extract of the key points of the plan

- Purpose (Vision, Mission, Strategic Objectives)

o Where the business is going and why

o How it will accomplish this

o The main milestones

- Market Analysis

o For each product:

§ Description and proposition

§ Customer segment

§ Size of market and growth forecast

§ Competition

§ Strengths, weaknesses, opportunities, threats

o KPIs and targets

o Projects and actions

- Sales

o For each product:

§ Forecast and key performance indicators

§ Commission scheme

§ Pricing and price increase strategy

o KPIs and targets

o Projects and actions

- Operations

o Required resources for planned sales

o KPIs and targets

o Projects and actions

- Suppliers

o Critical suppliers

o KPIs and targets

o Projects and actions

- People

o Structure, roles and reporting lines

o Training and development

o Reward and incentivisation

o Communication

o Succession plan

o KPIs and targets

o Projects and actions

- Money

o Profit & loss and cash flow for the plan year and following year

o Comparison with previous year

o Base plan, worst case and best case

o Risks and opportunities

If you'd like to know more about developing a business plan then this event is for you.

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How does your business score?

2011-05-17T11:47:00.000-07:00

The balanced scorecard is a method developed by Kaplan and Norton to help businesses turn their strategy into action

- It provides a way to take the organisations vision and turn that into measurable objectives

- It has four layers

o Financial – the outcomes for shareholders defined in financial terms

o Customer – the outcomes for customers defined in terms of the benefits they receive and sales

o Internal – the processes that deliver the customer benefits

o Learning – the capabilities of the organisation, its people and its systems which deliver the internal processes

- Each layer is defined in terms of performance measures, performance targets and initiatives

- Initiatives are the projects or changes that are required to reach the targets

How can this be applied in a small business?
- This can be applied in a small business to both develop a strategy and to develop the business plan which will deliver this strategy

- The Vision is used to define financial targets. The financial targets are used to define customer targets. The customer targets are used to define internal targets. The internal targets are used to define learning targets

- The changes necessary to achieve the targets are identified and these become projects or initiatives in the business plan

- The performance measures become the key performance indicators (KPIs) for the business. They are regularly reviewed by management to ensure that the strategy is achieved

Learn how to apply the balanced scorecard to your buasiness by subscribing at my website.

Are you offering your customers too much?

2011-05-16T08:26:00.000-07:00

A customer buys a package of benefits when they buy your product or service. Some of these benefits are more important than others to your customer – some they may not want or value at all, some are critical and some they may not even realise they get. This will be different for each customer.

Some of these benefits cost you more than others to provide – some cost you a lot and some are free – or may even reduce your costs. If you understand the relative value and cost then this allows you to make adjustments to your product, pricing and proposition so that you optimise revenue and margin. This is the basis of the low-cost airline model. The benefits that were removed were valued less by passengers than the price reduction made possible by re-designing the airline process.

If you'd like to find how to apply this to your business then this event is for you.

More business advice for business owners.

Do your customers love you or leave you?

2011-05-09T11:25:00.000-07:00

If I love my customers can I charge what I like?

The most-often quoted study on why customers leave is one attributed to, variously, The American Society for Quality, the US Chambers of Commerce and a book called “Lessons from the Field” by Howard Feiertag and John Hogan. This gives the following reasons for customers leaving:

o Death or moving away – 4%

o The influence of friends and relatives – 5%

o Competitor marketing and special offers – 9%

o Dissatisfaction with product or price – 14%

o Perceived indifference of the supplier – 68%

- A study by RightNow Technologies says

o 73% of customers leave because of poor customer service but the supplier thinks that only 21% leave because of customer service

o The supplier thinks 48% leave because of price when in fact only 25% do so

- Mercer Management Consulting research shows that for a selection of retail outlets, only 15% to 30% of customers are price sensitive – that is, they would change supplier for a better price

- So retaining customers is not (usually) about price – it’s about letting the customer know you care.

So - if I love my customers can I charge what I like? And how do I get all my staff to provide great customer service?

Find out at this event.
More business advice for business owners.

Are market forces tearing your business apart?

2011-05-02T11:18:00.000-07:00

Michael Porter cam up with a great model - The Five Forces - to help think about markets. It was aimed at big businesses but is great for SMEs...

Find ways to reduce the bargaining power of customers. Reduce their choice of alternative suppliers by making your proposition unique or reduce their share of your total sales by selling more to other customers

Find ways to raise the barriers to new entrants. Build special knowledge or resources into your service and proposition. Develop and nurture relationships that are hard to replicate, for instance, local government preferred supplier status.

Use competitive intelligence to avoid being caught out by products or services that will replace your own

If you'd liek to find out how applying this model to your business could turbocharge growth then this event is for you.

See more great tips on our website.

Charge three times as much as your competition

2011-04-25T10:58:00.000-07:00

Want to know how to charge three times as much as your rivals - for something that is identical by law?
Your USP is the collection of attributes that make your offering stand out from the rest. It's NOT a me-too platitude like “service” or “quality”. It can be price – but only if your unique process or positioning delivers lower cost. It must be a tangible difference which matters to the customer, simple, and easy to communicate. It should be hard to copy.

And lastly - unique!

Coming up with a USP baffles many business owners. How do you differentiate your offering if you're a plumber or electrical contractor?

Well - if you want to see how something that is a commodity by law is differentiated - and how that translates into price - and how to apply that to your business - come to this event.

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What do your customers really want?

2011-04-18T10:50:00.000-07:00

Customers take different things into consideration when they think about buying what you sell. Some factors will be more important than others – this will vary by customer or by customer category. You and your competitors will be, or will have the reputation of being, better at delivering some of these factors than others.

If you know how important the different benefits are to different customer groups you can tailor your proposition to each group. If you know how well you deliver on that benefit then you can work on improving this where necessary.

How do you carry out customer benefit analysis? Identify your different customer categories. list out all the different benefits each category is looking for (this could be low price, reliability, speed and so forth). Weight them in order of importance for the customer category and assess how well you deliver the benefit.

If you'd like to know more about the power of customer benefit analysis then this event is for you.

Get more great business tips on our website.

Do you really know who your customers are?

2011-04-11T10:38:00.000-07:00

Do you define your market as, say, “consumers” or “SMEs"? Do you understand why such a definition is pretty useless?

You need to divide your market down further into particular types of customer, for example

o “Owner-managed businesses in the RG postcode with between 5 and 50 employees” or

o “Builders on the local council suppliers list who do not have an internal H&S manager” or

o “Women between 25 and 35 who are fashion-conscious but on a budget.”

- It helps to give them a name – for instance a supermarket chain might categorise some of its customers as “Northern Brand Loyalists” and others as “Sausage-and-mashers”

- A customer category is another way of describing a market niche

Why have customer categories?

- It will help you make decisions about which customers you want – and which you don’t want

o Which customers are more profitable – and which are a nightmare to deal with?

- It will help you understand why those customers choose your product or service – or that of your competitor

o Which benefits are more important to them – and which less?

o How well do you match those desires – and how do you compare with the competition?

- It will help you develop propositions which are tuned to the customers’ requirements – even if the base product or service is the same

- It will help you quickly and easily communicate the type of customer you are looking for

- You should strive to be number 1 or 2 in your market. If you are not big enough to achieve this in the whole market you can focus on a niche (a customer category) where you can be number 1 or 2 and so dominate.

If you'd like to know more about how understanding customers can drive your business growth then this event is for you

See more advice for business owners here

Top Ten Tips for Using Social Media

2011-04-07T06:39:00.000-07:00

Here are the top ten tips that came from a recent IoD meeting in Berkshire:

1. Update your profile on LinkedIn: this is a tool to manage an extended network

for communication and CRM and a valued source of information. It is also a

way for you to establish and build credibility in the marketplace, but beware of

using it to overtly sell.

2. Think of social media as your new PR tool: it is a really cost effective way to

manage PR for a many businesses, but you must take as much care over your

branding and messaging as you would with traditional media. Don’t forget to

check on your own organisation’s house rules on media engagement.

3. Blogging is one of the most effective forms of social media, and it is underutilised

by many organisations. This tool can quickly establish credibility and

provide a more ‘personal’ insight into your organisation, but the golden rule is to

use it consistently e.g. once a week, twice a month.

4. Use social media as a method to manage existing customer relationships –

don’t just see it as a tool for new business generation and in any case recognise

that the cost to your business of attracting new customers is much greater than

retaining existing relationships.

5. Social networking usage can have an apparently positive impact on search

engine optimisation (SEO) and therefore the significance of your website.

6. “Crowd Sourcing” is a social networking enabled phenomenon, whereby

corporate market research can be carried out by posing questions to your

electronic community.

7. Twitter has potential business value due to its real-time nature. People are only

presented with the latest Tweets unless they choose to trawl back though older

ones and therefore it lends itself to “today’s news alerts”.

8. Don’t see social media as a replacement for traditional marketing methods: you

must do both. (One delegate had analysed the cost of generating a lead via

social media as opposed to traditional methods and found that the costs were

broadly similar)

9. The mature generations need to embrace social networking – ignore it at your

peril!

10. Keep up to date: look for training courses and don’t be embarrassed by your

lack of knowledge, many people feel the same and you will find that you will

make many new contacts and also learn how to communicate with those

contacts in new ways!

Learn how to raise your game by visiting my website.

5 Ways to Improve Your Cashflow

2011-03-30T12:01:00.000-07:00

Matt White of Calverton Factors gives the following great advice on cash flow to business owners:

Was the dip in GDP growth in the last quarter of 2010 just a consequence of the coldest December in 100 years or does it signal something more serious? Whatever the overlying figures, the real issue for small businesses are sales (or lack of them) and cashflow. Lack of sales may be a temporary blip but the impact on the business can be ruinous as it is often not so easy to cut costs to the same degree. Many businesses have not been able to build up sufficient reserves to overcome short term problems and if this is the case then cashflow management becomes even more important. However there are a number of steps that can be taken in order to improve cashflow and to assist businesses through these difficult times:

1. Financial Information: The benefits of timely and accurate management accounts are more prevalent than ever. A cashflow forecast is essential and this should be your starting point for negotiations with your bank.

2. Your Bank: Visit you bank manager now. You should take with you up to date accounts, forecasts (particularly a cashflow forecast) and aged debtor and creditor lists. Your aim should be to confirm your facilities for the next 12 months.

3. Credit: Begin to think of your cashflow as the most valuable part of your business. Every time you grant credit terms to your customers it is costing you cashflow (as well as real money). Every time you negotiate extended credit terms with your suppliers it improves your cashflow (and saves you money).

For new customers ask them to pay on invoice, or in 14 days, before you go to 30 days – that’s from invoice date NOT end of month following. To help customers pay quickly offer them discounts for early settlement and consider penalties for late payment.

4. Credit Control: A good credit controller is worth their weight in gold and, more than anything else, good credit control is about consistency. Credit control should work to a system of statements, letters, telephone calls and, only if very necessary, legal action. Implement a system of consistent and regular contact with your customer – remember most people are happy to pay; you just need to make sure you are first on the list.

5. Invoice Factoring: Invoice Factoring provides early payment against the value of a business’s invoices. It also provides immediate access to a highly experienced and capable credit control team. As well as providing upfront cash against your invoices, the Factoring Company will credit check customers, chase for payment and if required insure the customers against non-payment.

In the current economic environment the sources of funding for working capital have shrunk. The high street banks are being more stringent on their overdraft lending and with property prices declining it is getting harder to remortgage to raise capital. The one valuable asset that remains on a company’s balance sheet is the sales ledger and this makes Invoice Finance a highly attractive means of maintaining cashflow and protecting the business from the ravages of the recession.

Calverton Factors is an established and independent invoice finance company based in Milton Keynes. If you are looking for finance facilities from £25,000 to £500,000 then please feel free to contact Mathew White on 07748 631630 or at mattwhite@calvertonfactors.co.uk.

Learn how to raise your game by visiting my website.

Looking for investment?

2011-03-24T07:00:00.000-07:00

If you're one of the businesses looking for investment during 2011 then you are much more likely to succeed if you are well-prepared. Whatever the scale of your business, this means having a clearly-articulated business strategy and a credible plan to deliver it.

Your business strategy should set out a defensible market positioning: a compelling proposition in an attractuve niche. Your management team needs to have a proven track record in the industry and be capable of organising the resources, human and otherwise, to deliver the plan. The plan needs to explain how you will achieve the forecast top line (marketing and sales), the costs involved (people and facilities) and the risks and how you will mitigate them. It also, of course, needs to set out the financials - profit, loss and cash flow. These need to match the forecast sales and costs. A sophisticated set of numbers will show base, best and worst-case scenarios matching the risks and opportunities identified.

Finally the plan needs to show what is in it for the lender or investor. For the latter you will need to have a clear understanding of the value of your business before you start negotiating to sell some of it..

Learn how to develop a plan for your business by at my website.

Systemise your business to grow it

2011-03-17T11:38:00.000-07:00

Why job descriptions help your business grow

2011-03-10T07:24:00.000-08:00

Job descriptions are an essential part of co-ordinating and motivating employees. Without a job description an employee does not have a clear understanding of what they are supposed to achieve and how their performance is measured – and you have no way to hold them accountable.

The process of creating and reviewing job descriptions is an opportunity to discuss and clarify the role – to reinforce two-way communication. This is part of leadership, and part of building a true business - one that is bigger than you aqnd not constrained by the hours you are able to work.

Find out more at this seminar "The Owners' Trap", which will explain how this and other changes should be implemented to help you to take your business on to the next level..

Learn how to raise your game by visiting my website.

Do incentivisation schemes work?

2011-03-03T11:26:00.000-08:00

The underlying assumption is that rewarding employees for achievement (usually financially) will encourage them to work harder and achieve more in pursuit of those rewards. This view is not borne out by academic research but in practice bonus schemes are widely used. A carefully-designed bonus scheme when implemented on top of good employee practices in a well-run business is a useful management tool – but it is not a substitute for these things.

When you're struggling to grow your business beyond you; when you are trying to get the right people doing the right things so that the business is no longer reliant upon you - an incentivisation scheme might have a role to play.
Find out more at this seminar "The Owners' Trap", which will explain how incentivisation should be implemented - as well as the other steps you need to take to take your business on to the next level..

Learn how to raise your game by visiting my website.

You need to delegate

2011-02-24T11:22:00.000-08:00

Can't find the staff?

2011-02-17T11:12:00.000-08:00

Key man blues?

2011-02-10T09:34:00.000-08:00

Are you concerned that the growth of your business is limited by your available time and effort?
Worried that you need to grow to afford more staff - and need more staff to grow?

To break free from the Owners' Trap you need to do the following:

1. Systemise your business
2. Get your staff to want what you want
3. Learn how to let go
This seminar "The Owners' Trap" will tell you how to do this.

Learn how to raise your game by visiting my website.

26% of SMEs plan to raise funds in 2011

2011-02-04T06:39:00.000-08:00

What are the other 74% going to be doing?

This was one of the questions raised by a recent presentation by Baker Tilly to Thames Valley IGT. the figures were based on the company's recent YouGov survey of 500 SMEs.

The survey also highlighted that business owners were more positive about their own business than their sector or region as a whole - so we're all above average!

The key objectives for the surveyed companes were top-line growth - in particular, developing new products and markets and organic growth. This strategy on the face of it makes the low level of planned investment even more surprising.

If you're one of the businesses looking for investment during 2011 then you are much more likely to succeed if you are well-prepared. Nick Bettes Consulting specialises in helping business owners put their business on a more manageable, professional and scalable footing.

Are you indispensible?

2011-02-03T08:49:00.000-08:00

Organisational structures for SMEs

2011-01-26T03:19:00.000-08:00

Why is structure important in a small business?

- Employees need to know where they and others fit in an organisation. Lack of clarity can be confusing and de-motivating
- Growing and changing the business will be simpler if you already have a disciplined and open approach to reporting lines and responsibilities
- The process of formalising an appropriate structure will force you to address inconsistencies, gaps and duplications – and to consider how effective your people and processes really are

How do you decide on an appropriate structure?

- There are some basic principles that you need to embody in your structure

    o Single reporting line – every employee should report to one and only supervisor. (Do not confuse reporting lines with providing a shared service; for instance an administrator can support several managers but should only report to one person for pay and rations issues). Avoid dotted-line reporting lines
    o Division of labour or specialisation – group similar activities and skills together in departments or sections
    o Each post should have clear responsibility for outputs or results which is matched with appropriate authority over the resources necessary to achieve this
    o Span of control – no more than eight direct reports to each position
    o Lean organisation – keep the total number of levels including the leader and the front line to a minimum – in most SMEs this will be between two and four

- Start at the second level with three main responsibilities

    o Winning business
    o Delivering the product or service
    o Getting paid and admin tasks

- There should be one position responsible for each of these roles (but this may not be three separate people in a small business)
- Almost all small businesses should use this functional structure. Larger business may adopt a divisional or matrix structure
- Do not design a structure to cope with or work around individual inadequacies or historical accidents – deal with them
- Generally, but not always, a superior should be better rewarded than their employees. It is worth questioning why if this is not the case

Implementing the structure

- As with all HR-related activities, the process is as important as the result
- It is an opportunity to communicate with (ie listen to) your employees. Effective consultation will achieve a better result and more buy-in
- It should be done in conjunction with job descriptions and, if relevant, the incentivisation scheme
- The structure should be published as an organisation chart and kept up-to-date

My workshop programme covers this and every other key part of running a business, from strategy through to invoicing. For more details of this comprehensive and affordable course visit my business advice website.

If you'd like a free white paper on boosting the value of your company then complete this simple business value calculator

Is your business direction clear?

2011-01-19T10:18:00.000-08:00

Clear direction - a vision, mission and strategic objectives - is essential for any successful business. Business owners ned to know:

· The importance of a motivating and guiding vision for any business and how to construct one
· Ways to turn your Vision into a compelling Mission for your staff and customers
· How to identify and set concrete Objectives that will keep you on track towards your goal whatever happens
· Why growth is not optional - and why unplanned growth will damage your business – and why growth itself brings challenges
· What successful business owners spend their time doing – and not doing

If you'd like to learn how to do this then this seminar is a must: The Road To Growth

More information on my website: http://www.nickbettes.co.uk/

Thinking about selling your business?

2011-01-12T10:15:00.000-08:00

Preparing in the right way could get you 2-3 times as much for your business.

Getting your company fit for sale could mean the difference between getting nothing and getting a great multiple.

It's not about numbers. It's about strategic positioning and generating competition between the right buyers.
It's what you as a business owner should spend your time doing.

Make a start. Come to this business advice seminar.

More information on our business advice website

Feeling the management strain?

2011-01-05T10:04:00.000-08:00

Looking for business investment?

2010-12-29T09:59:00.000-08:00

Are you looking for a bank loan or business angel to fund your business growth plans?

Do you understand the kind of things they look for in a company before they will invest?

Do you know what government finance is (still) available and how you qualify?

These are big issues. Succeed or fail issues. Don't leave it to chance - talk to us.

As a first step, get yourself on this business advice seminar or take a look at our business advice website.

Selling your business in the next two years?

2010-12-22T09:53:00.000-08:00

Preparing in the right way could get you 2-3 times as much for your business.

Getting your company fit for sale could mean the difference between getting nothing and getting a great multiple.

It's what you as a business owner should spend your time doing.

Make a start. Come to this business advice seminar.

More information on our business advice website

Business owner - need to raise your game?

2010-12-15T09:43:00.000-08:00

Do you have a clear direction?

2010-12-10T09:23:00.000-08:00

Clear direction - a vision, mission and strategic objectives - is essential for any successful business. Business owners ned to know:

· The importance of a motivating and guiding vision for any business and how to construct one
· Ways to turn your Vision into a compelling Mission for your staff and customers
· How to identify and set concrete Objectives that will keep you on track towards your goal whatever happens
· Why growth is not optional - and why unplanned growth will damage your business – and why growth itself brings challenges
· What successful business owners spend their time doing – and not doing

If you'd like to learn how to do this then this seminar is a must: The Road To Growth

More information on my website: http://www.nickbettes.co.uk/

Are you serious?

2010-11-29T07:32:00.000-08:00

Yet another dicsussion on LinkedIn over whether businesses should have to grow or not (see the NRG-Networks group)

It's simple. There are two different types of business owner. Those who think it's their job to produce widgets (or build websites, or fit boilers, or sell insurance...) and those who think it's their job to build a business.

The first type are really just self-employed. The second type are the true business owners. They are focused on driving their business forward. They spend time thinking about how they get to the next step. They invest in their company and themselves so that they can achieve that next step - because they know that it will take a bigger strategy, a better plan, a tighter operation and more teamwork.

These business owners will spend time planning for when they come to sell their business. Or maybe they're wondering about getting money from a venture capitalist, business angel, government agency or bank to fund growth plans. They recognise when they reach the point where they and their management team become the limitation on the company's growth and they need to step back and change the way the busines operates. Success in any of these scenarios requires them to raise their game.

If you're one of the second type (true business owners) then you recognise the value of getting expert help. You will probably want to click here for your free copy of the white paper "Raising Your Game" which addresses the challenges you'll face.

Use IT Effectively To Boost Business Performance

2010-11-11T08:12:00.000-08:00

How do you apply IT to boost business performance?

1. Set clear business direction as a prerequisite for the effective use of IT. This of course applies to the effective use of all parts of a business - marketing or operations or HR - but you'd be surprised at the number of companies, small and large, who don't have a clearly-articulated direction or if they do don't apply it to IT decisions.

2. Ensure your IT strategy and roadmap supports your business strategy. IT should not be an afterthought and IT decisions should not be based just on the internal requirement to get things done. All major IT decisions and investments should move the business in the desired direction and add to the bottom line, not subtract from it.

3. Understand what is important to your customers and how your IT helps you deliver this. All IT projects should improve the experience for your customers - possibly by improving the experience for your staff.

4. Having decided what you need IT to deliver then evaluate the impact of your choices about IT infrastructure and management on profit.

If you want to learn more about this then why not book online for this seminar on Using IT To Boost Business Performance?

My workshop programme covers this and every other key part of running a business, from strategy through to invoicing. For more details of this comprehensive and affordable course visit my business advice website.

If you'd like a free white paper on boosting the value of your company then complete this simple business value calculator

Manage your time, grow your profits

2010-11-01T08:28:00.000-07:00

As a business owner or director your available time limits the growth and performance of your business unless you manage it properly.

How can you manage your time better?

- Schedule a weekly review with yourself. Set aside the same 15 minutes at the start or end of each week to write down the things that were achieved/missed in the past week and the things to be achieved in the next week
- Don’t just react to the latest stimulus. When a task or interruption appears, train yourself to decide what is urgent, what is important, what is both and what is neither and prioritise accordingly
- Start each day with a written list of things you are going to achieve that day and review the list at the end of the day
- Time-box your day - have targets for the next hour, by lunchtime, before I have a coffee...
- Set aside a time each day when you will accept NO distractions
- Have a schedule for everything that happens regularly - and stick to it
- Delegate everything unless there is a compelling reason not to. Aim to deskill tasks and process them using the lowest-cost resource. Taking responsibility for the things that distract you may well enrich the role of someone more junior
- Fix things for the long term. If you do have to break-off to deal with an unplanned issue don’t deal only with today’s interruption or distraction – understand the root cause and remove it, look at the trend and educate the people involved, set up simple processes, scripts, forms or rules to handle similar events in future
- Turn email alerts off. If you have an assistant, set them up with access to your email and get them to deal with everything they can, delete the junk and just leave the important stuff that you have to do yourself
- Set aside a time each day to deal with email – don’t look at it before that time and stop dealing with emails at the end of that period

Make sure that every day you have done something to make the business less reliant upon you.

My workshop programme covers this and every other key part of running a business, from strategy through to invoicing. For more details of this comprehensive and affordable course visit my business advice website.

If you'd like a free white paper on boosting the value of your company then complete this simple business value calculator

How to deliver great customer service

2010-10-18T00:39:00.000-07:00

Why is customer service so important?
- In the long run, good customer service is the only way to grow a successful business. Satisfied customers come back to buy more and also tell other potential customers about your service
- Good customer service forms a virtuous circle with employee satisfaction. People like to work for a business that they can be proud of and they like being able to make customers happy
- Poor service will produce the opposite effects and eventually destroy a business
What are the key elements in good customer service?
- Communication
o Understand your customer categories and the benefits they seek
o Engage customers in product development and service improvements
o Respond quickly and effectively to enquiries via the people who can provide the best solution to their need
o Agree with each client up-front what is to be delivered and how success will be measured
o Be accessible to customers at all their preferred times and using all their preferred channels
o Measure customer satisfaction regularly, publish the results and make sure the results provide a basis for action – then take it
- Culture
o Make explicit your values that tell everyone the customer is the top priority
o Train all employees in customer service and your values and then empower them to do what it takes to deliver great customer service
o Have an accessible complaints procedure focused on resolving the issue for all customers and all time
o Measure customer service and reward or acknowledge individuals who excel
o Do not tolerate poor customer service
- Processes and outcomes
o Define how you measure good customer service in your business and what key performance indicators (KPIs) are relevant for controlling the end-to-end process
o Include targets for these measures for all staff and review performance monthly and annually. Include them in your incentivisation scheme if you run one
o Publish actual performance figures against target
o Carry out regular and post-project reviews. Learn from mistakes and successes and capture improvements in revised processes
o Benchmark against the best performers inside and outside your industry

My workshop programme covers this and every other key part of running a business, from strategy through to invoicing. For more details of this comprehensive and affordable course visit my business advice website.

If you'd like a free white paper on boosting the value of your company then complete this simple business value calculator

How resilient is your turnover?

2010-10-04T00:37:00.000-07:00

Not all revenue is equally certain. A business which relies on winning a small number of large contracts each year may well earn the same revenue and profit as a business that gets its income from a large volume of contracted subscriptions and a third company that gets all its income from ad-hoc repair and maintenance across a moderate number of existing customers

o In theory, the riskier nature of the project business should result in higher profit margins (returns to the shareholders) and the stable nature of the subscription business, lower - but this is not always the case in practice
o Don’t confuse spreading payments for a project with spreading both the cost and the income by using a different business model. The first impacts cash flow and actually increases risk – so should require an even higher return.

All other things being equal, businesses should strive for as much locked-in recurring revenue as possible

How can you translate one-off into recurring revenue? Some examples of spreading payments are

o A photocopier which is paid for by charging a small amount for every copy made
o Mobile phones, where the phone is given free in return for a fixed term monthly contract

Each of these relies on a higher total income over the life of the contract to cover the cash flow hit and the risk of default. It is also necessary to build in a compelling proposition to renew the contract before it expires in order to build revenue resilience

Some examples of additional recurring revenue are

o Software license maintenance
o Membership of a user group
o Subscription services
o Service and maintenance contracts

An alternative way of looking at this is separating future income from resource or asset limitations

o Translate a single consultant’s time into a course to be sold online in perpetuity

What is the proposition for the customer? Possible benefits that would induce a customer to sign up for a long-term contract are

o Access to a continuous stream of new content
o Access to special offers and discounts
o A known fixed charge covering all repairs (a form of insurance)
o The right to free future upgrades
o Continuous tuning & maintenance of the original product

One final source of revenue risk is over-reliance on a single or a few customers (high customer concentration) – avoid this.

See how I can make your business more profitable.

See how my services could make your business worth more

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