It’s Not About The Turnover… It’s About The Leftover!

- Latest News

By Sue Hirst – Director, CFO On-Call

Have you ever wondered why your business isn’t as profitable as you would like and keeps running out of cash?

Despite your great efforts at making plenty of sales… it just doesn’t seem to end up on the bottom line!

The problem is the big gap between sales and profit.  The gap is filled with costs and overheads.

Costs are the ‘direct costs’ of producing your product or service e.g. purchase of stock, packaging, freight etc.  If you’re in a service or jobs business, it’s the labour and materials to produce the job.

Overheads are the general day to day things like rent, wages, stationery etc.

The place to begin ensuring a profit, is with Costs. Until you know exactly what it costs to produce an item or a job, it’s very difficult to work out what you should charge to cover them.  It’s tempting to just follow competitors and charge the same, the problem with that is how do you know they are making a profit?  They may get the business for a while, but will they still be in business next month or next year?

If you really can’t avoid competing on price, one option to be competitive might be to produce the item/service at the best possible cost.  Look long and hard for ways to produce in the most efficient and cost effective way.  How can you minimise cost without compromising customer experience too much?

Another option is to let customers know why your product/service is better than competitors and therefore why they should be happy to pay a commensurate price for the quality.  Make the invisible, visible… If there’s something you do that ensures a better quality item/job let customers know about it!

Once you’re confident you’ve got control and a fair amount of certainty about costs you’re in a great position to work out what margin you want to achieve and set your price to achieve that.

Once you’ve set your price it doesn’t end there!  You need to constantly review information about gross profit to keep your price at the right level to achieve the right level of profit.  Constant monitoring of costs is necessary to ensure you maintain the margin you need to ensure a profit.

If you’re delivering a service or job it’s desirable to have a budget or quote of what you think the job entails before you start (this is usually driven by customers, and should be undertaken for the benefit of the business too).  Once you’ve done one you also need to enter the actual transactions against the budget/quote (preferably in a simple system providing a budget versus actual report), so that you can see where things went right/wrong and learn for the future how to improve profit.

The next step in the gap is Overheads.  Some businesses end up with so many overheads, it can be a real headache to keep track of them all.  A great place to start managing them is with a Budget.  It really pays dividends to spend some time thinking about what overheads you need to incur to run your business, rather than just spending money willy nilly without any plan.

Once you’ve put together a budget you can enter it into your accounting system and run a report every month to compare actuals against the budget, to see where things are on/off track and fix it quickly to avoid further losses.

Another great tool to help you manage overheads is ‘Purchase Orders’.  This is a simple form that everyone has to complete before they spend any of the business’s money.  You can set a limit of say everything over $100 requires a Purchase Order, signed by the business owner prior to ordering/spending.  It may seem time consuming, but if it saves you thousands of dollars it’s a well worthwhile exercise.

The above are fairly simple concepts and some tools to help you with them are:

  1. A monthly budget entered into your accounting system
  2. Pricing and costing analysis
  3. Reporting on actual versus budget each month
  4. Purchase Orders
  5. Quotes on jobs
  6. Report on job quote versus actual

Chat our team of Part Time CFO’s to get the right plan for your business!

Happy Staff = Happy Customers… Who Are Happy To Pay!

- Cash Flow Management and Forecasting

by Sue Hirst, CFO On-Call

Whether you’re new to business or a seasoned operator, it can sometimes be difficult to know what to focus on.  Business owners/managers are expected to be in control of:

  • Product/service development
  • Marketing and Sales
  • Operations and Finance
  • Customer Service
  • Human Resources

I’ve put them in the above order because firstly you have to have a viable product/service to offer to the market.

Then you need to convey a compelling marketing message to customers and be able to convert their interest into sales.

You then need an effective method of delivering your product/service to customers as well as finance to fund the business.

You need to focus attention on customer service to ensure they come back and give good testimonials.

Probably the number one for established businesses is Human Resources.  It can be summed up into one sentence:

“Happy staff – deliver great service – to happy customers – who are happy to pay you!”

It may be surprising to some that HR can have such a big impact on your bottom line.

When your business is small you can afford the time to focus attention on customers and ensure they are being well looked after and happy.

When your business grows, you can become distanced from customers due to all the other things you have to focus on.  One thing I’ve learned about employing people is that they aren’t there just to make your life easier!

They have their own motivations and desires and you need to understand this and nurture them if you hope to successfully employ people and grow your business.

The best way to nurture staff is to take this area of your business seriously.  It’s surprising how many big businesses don’t take this area seriously, let alone small businesses.

It’s not rocket science though.  We’ve been employing people in our business for about 20 plus years and it hasn’t all been ‘plain sailing’, but due to our proactive approach we’ve had a lot less hassle than other employers I know.

It pays to have regular reviews with staff and work with them to develop their skills.  Try to create a consultative culture in your business and really listen to staff and what they have to offer, in terms of feedback and suggestions for what might work best for the organisation.

They are generally the ones interfacing with customers and hear what they say, so often have the best handle on reality.  If you listen to them and incorporate their suggestions, it can be very worthwhile to your bottom line.

If you work with staff to develop their skills and help them to be more productive, you will also win as a business owner.  On top of all this you get great loyalty from staff if they feel valued and listened to.

It can save you much money and headaches if you keep working with great people who are committed to your business and its success.

The very best place to start with HR Management is with an ‘Organisational Chart’.  This sets out everything that gets done in the business and who does it.  It’s a great way to ensure that all aspects of business operations are covered and there aren’t any gaps or overlaps.

Once you have the ‘Organisation Chart’ you can then come up with accurate Job Descriptions for everyone.  It’s vital for everyone to understand what they’re responsible for.

Having people running around without clear understanding of what they should be focusing on is very detrimental to business productivity and profitability.

Once you have these tools in place it’s much easier to regularly review the situation and creates an easier environment for HR realignment.  This means constantly reviewing who is doing what and if some people are overloaded where you can shift tasks to others who aren’t fully utilised.

If you’re in a service based business your most valuable income earning asset is your service staff.  You want to ensure they are spending the maximum time on billable activity.

If for example they’re spending 5 hours a week on non-billable admin and being charged out at say $100 per hour … if you can move that work onto part of the job … you could create an extra $20,000 of revenue per person.

That’s if you take into account a 40 week working year allowing for annual leave, sick leave, public holidays etc.  And that’s just one person – imagine if you could do that with 5 or 6 people!

It would more than cover the wage of someone else to do the admin or better utilise someone already employed.  One very important question to ask in a service based business is:

“Am I selling all the hours I’m paying for?”

The best way to be more productive with service staff is to have great systems for managing people’s time and travel and scheduling.  There are some fantastic systems available nowadays to make this process easy and cost effective.

Cloud commerce has made systems more affordable and accessible to small businesses.  Check them out to see how much you could save – not just in money, but headaches too.

 

NOW is the time for Business Exit Planning

- Business Exit Planning

Anyone can create or build a business. But how do you exit the business successfully? The decision of whether to exit your business or not, is never a simple decision.

Most business owners hesitate or even procrastinate when making decisions about succession and transfer of business ownership’s. It’s natural to avoid thinking about matters that are unpleasant, such as death or disability. In most cases, it is not just one decision, but there are several interrelated decisions to grapple with, for example, how much money will you receive upon exit? What is the best timing for the exit, given the economic cycle? What kind of CFO advisors will you need? What will happen to your staff, customers and business partners?

In reality, Business Owner(s) are so caught up in the day to day management of the business that there is a tendency to prioritise matters that are urgent over matters that are important. Sometimes, things can happen unexpectedly – People become disabled; people die. Even if your business is in growth mode and you have no thoughts of retirement, you still need to deal with the contingencies of a forced exit. Peace of mind and security for you, your family, your business partners and employees – these are all reasons to think about your exit plan NOW well before you time the date of your exit.

Fortunately, today, there is a growing body of knowledge on Business Exit Planning. There are an overwhelming number of options available to Business Owners – options for those who want to exit in financial sense but remain active in business; options for those who no longer want to be active, but may want to remain invested in business; and options for those who want to sever ties completely.

Business Exit Planning is the process of defining exit-related objectives and strategies of the Business Owner(s), followed by a road map that takes into account all personal, business, financial, legal, and taxation aspects all in the context of planning the succession and continuity of the business. Objectives may include maximising (or setting a goal), minimising risk etc. The strategy will usually include the mode of exit envisaged (i.e. sale, going public, selling to management, transferring to children etc.), marketing, tax planning and  timetable.  The strategies should also take into account contingencies such as illness or death of the Business Owner (s).

Generally, a Business Exit Plan would document the following:

  1. Summary of business & personal objectives for seeking a Business Exit?
  2. Estimated business Valuation (according to appropriate valuation methodologies) base don existing operations
  3. Actions to improve the business’ profitability, management & cash flow to improve the business’s value & attractiveness to potential investors or buyers
  4. Business Exit options to be considered? The pros and cons of each option, along with the likelihood of success.
  5. For a sale – Identification of potential groups or companies that may be interested in the business
  6. Issues related to Tax and Estate planning, minority shareholders or financing arrangements that may impact on the exit options
  7. Contingency plan (if death or disability would occur, what changes in governance you would want in your company?

We understand that most Business Owners find the subject of Business Exits excruciatingly difficult and burdensome. We have experienced advisors across Australia ready to help you with your Business Exit planning.

 

Don’t hesitate, get started now and contact us today on 1300 36 24 36 (AU) or 0800 180 400 (NZ)

Do You Make This Mistake In Your Numbers?

- Latest News

By Sue Hirst, Director – CFO On-Call

 

How to Calculate your Mark-up the Right Way!

Costing and pricing is a key issue in tendering and quoting for work and it must be correct and commercially attractive.  A common problem is getting simple mathematics wrong.

When pricing a tender or quote people start with quantities and costs for labour and materials.  A  markup is added to the cost. e.g. for a cost base of $2,000 add 20% – equals a sell price of $2,400.

 

WHERE DOES THIS FALL DOWN?

It falls down in the language and assumptions.  The boss says “the job margin target is 20%” and staff use this figure and slot it into the markup %. When this happens the actual margin then drops to 17% (see our calculated example below)

With actual cost blowouts in job delivery, the margin often ends up less than 10%, sometimes down to low single digit percentages.  You then have to try and cover overheads and end up with a profit for shareholders.

In our calculated example below you can see that the effect on the dollars is 20% extra gross profit by getting it right i.e. $500 instead of $400.  Now imagine getting this wrong on much bigger jobs or lots of them.

Well worth thinking about!

 

Gross Margin Calculator

Cost $2,000.00
Markup (20%) $400.00
Sale Price $2,400.00
Gross Margin – Markup/Sale Price (17%) $400.00

 

Markup Calculator

Gross Margin (Markup/Sale Price) 20%
Sale Price $2,500.00
Cost $2,000.00
Mark-Up $500.00
Markup Percent 25%

Pricing for Profit

- Latest News

By Sue Hirst, Director CFO On-Call

There never seems to be an easy time in business.  We often hear people say “Times are tough and the competition is high.”  One thing is for sure, well run and profitable businesses are the ones that survive and prosper.

You can’t run a profitable business if your product or service pricing is not spot on. Here’s some ways to achieve a good price without losing customers:

  1. Customer service – Provide the best possible customer service and value compared to your competitors – not all customers buy on price alone.
  2. Perception of quality – Promote the perception of quality and make it your ‘Point of Difference’ – make sure your customers know you are the best and why.  Make the ‘invisible’ ‘visible’.
  3. Identify your USP – Emphasise your ‘Unique Selling Proposition’ – if there is something that you do that others don’t, tell everyone.  Don’t assume they know just because you do.
  4. Small regular price increases – Do small regular price increases e.g. CPI at end of year and write it into contracts.  These are much easier to achieve than irregular big increases.
  5. Margin tracking – Connect price increases with supply increases – keep track of your margins to see when to do this.
  6. Know your customers – Ask how they value your product or service.  Good customers should be happy to pay for quality products and services and appreciate that you have to run a sustainable business.  Seek testimonials and put them on your website and marketing materials.  Also ask your happy customers to refer you to other good customers like them.
  7. Sack poor customers – This may be a scary one, but there may come a time when you need to ‘sack’ some customers.  Price focussed, demanding, slow paying customers can take up a huge amount of time and may be unprofitable.  The time you spend on them could be more profitably spent on good customers.  If you feel brave and the time is right it may be time to categorise your customers and focus on the better ones.
  8. Which products/services give you what profit – Analyse your profit on various types of products/services/jobs, so you know which ones you can charge more for.  It may be that some are highly profitable and some aren’t.  Once you know you can decide to focus on the profitable ones and reconsider the losers.
  9. Which products/services are your best sellers?  Our Part Time CFO’s recently had a client who hadn’t done a price increase for 5 years!  When we analysed which were their best sellers they put a price increase on them with absolutely no resistance from customers.  Your stock management or POS should tell you this information.
  10. Make it in the gross – The price you charge must factor in the ‘true cost’ of your product/service, plus a margin to ensure you’re making a gross profit.  If you aren’t making a good gross profit it will be very hard to make a net profit (after overheads).

For more information on how to improve your profit, talk with our Virtual CFOs in a free consultation

Here’s Why a Virtual CFO is the best option for Small Businesses

- Latest News

To state the obvious … a business manager or CEO’s job is to make the best decisions for the business. If you’re in the hot-seat, are there too many times you rely on intuition and gut-feel?

That’s fine in most cases, but what about when you need greater certainty in the financial outcome?

Let’s say you have to make decisions like:

  • Would a new salesperson help us sell more but will the extra profit cover the costs?
  • Should we take on that new piece of equipment? What is the cost recovery rate?
  • Is my calculator estimate close to the real figure?
  • What if I reduced the cost of goods sold, or the inventory, or collected the debts quicker by 7 days, how much extra cash in the bank would that give me?

Let’s say you have a submission to the bank or lender and you need, not just a professional presentation and accurate numbers, but a cost v. benefit or return on investment (ROI) analysis. Plus you would be smart to know the ratios that bankers use to justify your loan to their bosses.

Your internal bookkeeper or accountant may give you monthly totals, keep your invoices going out and provide profit and loss accounts, but can they help you make the BIG business building decisions?

A good Virtual CFO is right-hand to the boss but on the numbers side. Someone who has worked for bigger corporations, sometimes listed companies. Someone who has been head of finance, skilled in business numbers and knows how the numbers affect the decision making process of department managers and the CEO.

A full-time CFO (Chief Financial Officer) may cost you, with on-costs, say $150k to $180k a year? And this is hard to justify as you don’t need another large cost factor … but a Part Time CFO … can cost just when you need them and not when you don’t!

They don’t even have to live nearby either. These days it’s easier to have a sit down meeting over Skype, than in person and it costs a great deal less in travel and out of office time.

Virtual CFOs are becoming more the norm for small/medium businesses for this reason. You can hire a Virtual CFO, someone who gets to know your business, helps you when you need them and the costs could be a mere fraction of hiring someone full time.

Usually Virtual CFOs will work on a job basis of say $500 a half day, but you may prefer to work on an agreed fixed monthly fee as many of them do. Normally from $600 a month to $3000 a month.

Let’s take a medium cost of say $1600 a month. That’s a total of less than $20,000 a year and a really good Virtual CFO, should help you how to make at least 3 to 5 times their cost in greater profit or savings. Virtually a no-brainer!

 

Click Here to Find A Virtual CFO For Your Business

Managing For Value

- Business Growth

by Sue Hirst

Managing for Value (MFV) is a simple philosophy: everything we do should maximise value for the business owner/s or shareholders. MFV provides a fresh approach to running your business. It will require us to think and act differently, to put at the centre of what we do – the overall objective:  to grow shareholder value over time. It affects everything – from how decisions are made, to how we deploy our resources (time, money, people, information, materials and equipment) at every level.

We all face alternatives and make choices daily. MFV provides a framework within which all goals, objectives, decisions, strategies and achievements are judged according to whether they result in additional value being generated.

Business owners invest in a business with the expectation of receiving an appropriate return on their investment. There are many investment opportunities open to business owners. The return they receive from their business must be at least equal to, or higher than, the return they receive from other investment products of equivalent risk. The return required by the business owners therefore becomes the cost of equity capital. Our Virtual CFOs create value for our business owners or shareholders by earning a profit greater than the cost of our capital.

We call this profit Economic Profit.

In simple terms:

Economic Profit = Earnings – Cost of Capital

By using Economic Profit as a profitability measure, we can express our performance in terms of value creation.

A positive Economic Profit means value has been created; a negative one means value has been destroyed.

MFV entails managing the resources of the business to make them worth more than they would be if managed in any other way or by anyone else.

Putting MFV into practice

Value is created (or destroyed) by what we do and the way we do it. But we cannot act directly on “value”. We must therefore act on things we can influence like: the way our customers feel about the business, identifying customers’ needs and pain points and providing solutions for them, controlling costs and eliminating waste, bringing in processing efficiency etc. These activities are known as “value-drivers”.

The quality we bring to our daily work, the way we organise ourselves, the procedures we follow and the way we approach our business should all generate value. Identifying what creates value and what does not is the key to success. The value drivers govern our dealings with customers and competitors, and the way we are organised. The better we are at managing our value drivers, the more effective we will be in creating value within the business.

Our success at identifying and managing our value drivers will therefore determine the business financial performance, which in turn will positively affect the value we create for the business owners or shareholders.

How can I add value?

Everyone in the business can contribute to add value by identifying and working on the key activities that drive and add value to the business.

We can start by asking ourselves some basic questions:

 

Who wins from MFV?

When a business “Manage for Value”, we improve our ability to create value, and when we create value, everybody wins. The business wins because the value of the investment made by the business owners appreciate, leading potentially to even more investments, enabling growth. Our customers win because more time and effort is being put to things which matter to them, by highly motivated and effective employees. Our employees win because of increased job security and potentially newer opportunities in the business and finally the communities we live in win, because of our increased ability to support good causes and contribute to healthy local economies.

Adding value is not a one-off activity but a continuous day-to-day commitment.

For more information on tactics to improve all areas of your business click here to get a free session

The Crimes We Commit Against Our Business Bank Balance

- Cash Flow Management and Forecasting

One of the biggest crimes against business profit and cash flow, is not charging the right price for our products and services.

How do businesses determine their Price to customers?

Some typical methods:

  • Charge a bit less than or the same as competitors
  • Charge a bit more than the product or service costs
  • Charge as much as you need to earn to cover your costs i.e. Break-even
  • Charge what you can get away with
  • Charge what you think it’s worth
  • ‘Cost’ the product or service and calculate a markup to provide an acceptable profit

Let’s discuss the merits and pitfalls of some of the above methods.

Follow Competitors or the Market

The problem with following competitors is that you don’t always know how they calculated their price.   It may be unsustainable in terms of the costs to deliver the product or service. You may win sales from them in the short term, but unless you develop a better way of pricing you are likely to go out of business eventually, if the price doesn’t cover costs.

They may have cash reserves to cover the shortfall between Costs and Price for a while and you may not.   They can ‘sit it out’ until you go out of business trying to compete and collect all your customers later.

This may sound a bit extreme, but we see it all the time in business… look at the airline industry, this is a classic strategy they have employed in the past.

Charge a bit more than the product or service costs

The $64,000 question here is ‘How much does the product or service cost?’.   If you have looked closely at Financial Reports you will have seen the term ‘COGS’ which means ‘Cost of Goods Sold’.

This is purely the cost of getting the product or service out of the door or ready for sale.  COGS does not include overheads, such as administrative staff, advertising, office rent, stationery etc.

You can see the danger then of charging a bit more than the product or service costs. You still have to cover the cost of Overheads and these need to be factored into the Price. The danger is that if you don’t work out your ‘Breakeven’ sales figure you may be making a Gross Profit, but after paying Overheads you are making a loss.

Break-even analysis is the practice of calculating how much Sales you need to cover COGS and Overheads.   It is an absolute ‘must’ in business to know your ‘Break-even situation’.

Charge as much as you can get away with

This is a great strategy… so long as it covers your COGS and Overheads.   It may work at first, but if you don’t keep a close eye on COGS and Overheads and they ‘creep up’, it may turn out to be unprofitable in the end.

Charge what you think it’s worth

Worth is an interesting concept isn’t it?   It can mean different things to different people.   What the customer thinks it’s worth may be quite different to your perception.  Again, if this figure at least covers the COGS and overheads, that’s OK but most of us are in business to make a profit.

You still need to keep a close eye on costs to ensure your margin is not being eroded by increased costs.

The issues relating to Price are as follows:

  • Get the price right
  • Know thy Costs
  • Keep the price right

In order to get the price right you need to:

  • Determine the cost of delivery of the product or service to customers excluding overheads.
  • Know your Overheads, so that you can work out your ‘Breakeven’ sales and how much you need to sell to cover it.
  • Decide how much profit you want and calculate this into the Price.
  • Know your Margin and report on it regularly to ensure it is not being eroded by increased costs.
  • Know your customer satisfaction levels.   Dissatisfied customers won’t pay any price.
  • Regularly review pricing and do small increases to cover increased costs.   It is much easier to do small regular price increases than irregular large ones. Factor this into your contracts with customers and use increased costs as a reason for price increases.

Keep the Price Right

Price increase can be a very controversial subject.   Many business owners fear increasing prices, because they think customers will go elsewhere.   Where else would they go?

A price increase, combined with a small decrease in revenue may not be such a bad thing.   This scenario can have a positive impact on both profit and cash-flow.

It is often more difficult to increase Revenue than to increase Prices.   Many customers don’t even notice a small increase and fully accept one to cover CPI rises.  For many businesses failure to incorporate this into their price means they are absorbing increased costs and eroding margins.

For more information on how to improve your profit, talk with our profit and reporting specialists

8 Compelling Reasons you need a Virtual CFO for your business

- Latest News

It seems like everything is available in a ‘virtual’ version these days.  There’s virtual conferencing, furniture staging, assistance and even virtual life games!  The internet and increased broadband capacity has made this all possible.

We now don’t have to just accept what’s available in our local area, we can access the very best quality from anywhere in the world.  Obviously there are some drawbacks to dealing with services from overseas such as different culture, language and time zones etc.  

Virtual doesn’t have to mean anywhere in the world – it could mean from another part of the country or region you live in.  Virtual also doesn’t mean inhuman either – there is always a real human involved in the process.

Technology has made it possible to streamline a process by eliminating the menial and repetitive tasks – freeing up you to deal with the more interesting and complex aspects of your business.

Virtual CFOs are more in demand now with the availability of cloud-based business solutions for banking, accounting, budgeting, cash flow, diagnostics etc.

Using these tools, technology, knowledge and experience, here are some ways a business can reap the benefits of a Virtual CFO:

  1. Save time and Hassle. You don’t have to trudge across town to meet your typical old style accounting firm anymore.  Hop onto Skype to meet the ‘best of breed’ professionals, who understand commercial reality.
  1. Online Accounts – Put your accounts on a cloud-based system and your Virtual CFO will be able to access the information at anytime and keep tabs on what’s happening.  They will be able to alert you to developments so you can address issues quickly.
  1. Save money, reduce problems quickly. Addressing issues in ‘real time’, means that you pick things up quickly and save money and time, rather than waiting for months to find out something has gone wrong.
  1. While you think of it. Whilst an idea is fresh in your mind, speak with your Virtual CFO to discuss the merits/drawbacks of an opportunity.  It could save you lots of wasted time on projects, that aren’t viable or speed up making an idea a reality and reaping the profits sooner.
  1. Manage in real-time. Get access to your vital financial information/reports immediately, as well as being able to ask questions about them to ensure you have a full understanding.
  1. Immediate help with your accounting system – if you have a question you don’t have to wait until a physical meeting.  Your Virtual CFO can jump onto the system and fix your question immediately.
  1. Link your systems – reduce duplication. Get your systems all linked up e.g. Your banking, accounting and budgeting, so that you can have accurate profit and cash flow information at your fingertips.  Imagine how much easier it would be, to know when you can afford to pay for things, rather than waiting to ask the bookkeeper or accountant!
  1. Better Plan for Growth. Being able to develop business strategy, based on your current financial information, is vital if you want to grow your business.  There are some fantastic online analytical tools around, although you will most likely need a Virtual CFO, to guide you through how to get the most from it.

I hope these reasons have provoked some thoughts on how you can create improvements by accessing the help of a Virtual CFO for your business.

How to Calculate your Mark-up the Right Way!

- Business Exit Planning

Costing and pricing is a key issue in tendering and quoting for work and it must be correct and commercially attractive.  A common problem with how to calculate markup price is getting simple mathematics wrong.

When pricing a tender or quote people start with quantities and costs for labour and materials.  A  markup is added to the cost. e.g. for a cost base of $2,000 add 20% – equals a sell price of $2,400.

(more…)

8 Reasons you need a Virtual CFO for your Small business

- Business Growth

It seems like everything is available in a ‘virtual’ version these days.  There’s virtual conferencing, furniture staging, assistance and even virtual life games!  The internet and increased broadband capacity has made this all possible.

We now don’t have to just accept what’s available in our local area, we can access the very best quality from anywhere in the world.  Obviously there are some drawbacks to dealing with services from overseas such as different culture, language and time zones etc.  

(more…)

How SMEs are saving and making more money every day with CFO On Call

- Business Growth

How SMEs are saving and making more money every day with CFO On Call

The team at CFO On Call are a bunch of brilliant, logical, commercially experienced people, who are constantly helping SMEs improve profit and cash flow.  Here are just some of the ways they have done this recently:

My client in the manufacturing industry assumed their ‘scrap’ to be 8% of raw materials, but this had never been measured.  I introduced two 13-week programs where ‘scrap’ was measured and transferred to their accounting system.  We discovered that their ‘scrap’ was actually running at 12%.  Prices were increased to reflect the extra percentage involved in ‘scrap’

(more…)

Timing is Everything

- Business Growth

The right advice and the right action at the right time can make a world of difference to the success of a business. All businesses experience ups and downs. Knowing whether to persevere through the storm or to cut your losses and exit before things get worse can be difficult, particularly in the case of a family business. Emotional attachment, fear of failure, family pressure and expectation and personal liability which risks the family home are all factors that can make it difficult to make an objective decision. Seeking independent, professional business cash flow forecasting advice at the right time can help guide you through the storm or work out a plan to achieve the best result should it be time to call it quits.

(more…)