We often talk about the importance of focusing your profit improvement strategies into some key areas. They are to increase:

a) The number of desirable clients

b) The number of times each client makes a purchase, and

c) The average amount they spend on each purchase.

These are the major areas that can be managed by measuring their impact on overall profits and the good news is they can be measured with relative ease.

Identify your Critical Success Factors (CSF’s) by asking three questions:

1) What are your most profitable products/clients and what makes them so profitable?

2) What resources are required to support your firm?

3) What are the things that keep your clients coming back, recommending you and paying a good price for your product or service?

Once these questions are answered you should then plan on how you can monitor the effectiveness.

“Recognize your Key Performance Indicators (KPI’s) and place more or less emphasis on each area depending on the trend.”

At the end of the day a profit improvement plan is only effective if your return on investment (ROI), your net profit margin and your bank balance are improved simultaneously. Constant review and management of your CSF’s is the key to sustainable profit and ROI over the long term.

And that’s exactly what our Financial Performance Reviews and Business Health Checks are designed to help you with.

GRATITUDE GOES A LONG WAY!

While evaluating the close of one year and making plans for the upcoming year ahead, it is a valuable tip to remember the worth of a reward. Simple tokens of your appreciation towards clients, staff and team members can pave the way to smoother transactions throughout the year.

The question that often comes to the mind of the business owner centers on what has really been accomplished over the year.

We often say that a business is nothing more than a vehicle to get us to our destination and that destination is a personal one.

Chances are that when you first set yourself up in business you did it with a personal goal in mind. That goal may have been about spending more time with the family or having a higher level of disposable income or even more independence.

Too often we lose sight of these important goals as we get distracted by the things going on in our business. If we allow it to happen, the business will take control of our lives. And that’s not the way it was ever meant to be.

To make 2012 your most successful year yet it is important for you to understand what it is that you would like to accomplish in your personal life.

“It’s important to give your business the best chance of helping you to realize the goals.”

And the best way to do that is by way of setting specific actions and strategies and ensuring that you implement them.

You can be sure of being on track by setting up waypoints, milestones or deadlines which can guide you toward these goals. As you pass each particular milestone it is so important to celebrate them. That gives the opportunity to take a breath, refocus and continue on that journey.

It is often a good idea to be accountable to a third party when you are serious about achieving a goal.

The Weight Watchers franchise excels as a result of this. The success is a result of clients making an open declaration of a goal and being accountable to a third party by regularly stepping on the scales in an environment that is more than just the individual.

This means there is less chance of making feeble excuses and provides a better chance that the action steps to achieve that weight loss are implemented.

But if you are serious about achieving the changes in your firm that are truly going to make a difference in your personal life then you should involve us in that process. We have tools and resources designed to help set specific goals for your business, monitor your progress and give you the best chance of implementing them over 2012.

Start off on the right foot and keep creditors off your back by always paying slightly in advance of the due date. Rack up points with your suppliers and let them know you value the relationship. Sometimes you may find that they offer discounts or promotions to businesses that consistently pay punctually.

Negotiate when you can – ask for extensions or offer partial payments. And keep current products in circulation – make sure that you don’t suffer from a freeze-out of production.

As hard as it may seem, offer cash on delivery whenever you can and offer back-payments upfront to ensure you don’t end up losing days of business.

Keep communication fluid between you and your creditors or suppliers as well as you and your clients. When a client is due to pay, let your suppliers know your timeframe and when you will have the money.

Save your cash when you have it and use credit or loans to buy essential items. Cash reserves will ultimately come in handy. When you have cash in hand, make smaller payments wherever possible and prevent a debt hole.

“Keep creditors off your back by always paying slightly in advance of the due date.”

Keeping current on your accounts is a sign that you are handling all aspects of your firm with responsibility and accuracy. Falling short can fast become overwhelming, hinder operations and shut you down.

Paying on time keeps your reputation intact which is vital to success. Satisfied clients come back and recommend you to other potential customers.

Satisfied lenders, bankers, loan agencies and suppliers will extend the same courtesy when they trust that you are a savvy, organized and trustworthy client.

Prepare for a close by testing your techniques: run analytics on your offer using questionnaires or mock interviews. This preparation will leave you feeling confident and will reduce the chance of a client throwing a curve ball.

Make it clear from the start that closing deals will be beneficial to both you and the customer. Address your customer’s needs directly and provide solid reasons for why and how your service can best attend to their needs. Create space for the customer to step in and ask questions or pose objections: your pre-meeting preparation will have you ready and willing to take on these obstacles.

Always be ready with testimonials and client feedback. Show them how well you have succeeded in the past. Respect your previous customers by asking permission to use them as references and offer contact information, as you would in a job interview.

The best closers are people who seamlessly create urgency in the client’s eyes – the client would have no reason to turn down the offer. Pay attention to the flow of the meeting and realize when you have completed your piece – do not offer pleasantries to fill space. Give the client those moments of silence to reflect.

“Always plan ahead. Be direct and straightforward – avoid fluffed up language and ‘sales talk’.”

One of the best ways to become a better closer is to ask “why” when a deal falls through. If you have a client hooked all the way into a closing meeting and the deal does not go through, do not hesitate to politely inquire as to why. Using this as a critique, you can improve your future sales prospects.

Always follow up, no matter how the deal went. If you were successful in your close, a follow-up cements your positive relationship. If your client is still hesitant, a gentle follow up may be the nudge they need to take the next step.

Step into your close with the utmost confidence in the product or service you are selling. Sincerity and trust, conveyed through your verbal communications and intention to engage in an ongoing relationship with your client, will be the strongest selling point at the end of the day.

An image overhaul is the first step, including a newly revamped marketing plan. Consider what has worked and not worked in the recent past and also consider future plans for the firm. Here are some more tips:

• Make deadlines and timetables for making sales: treat the sale like any other task in your ‘to do’ list with step-by-step plans to completion. Mark tasks, starting with initial sales calls, and map out step-by-step follow up-plans, ending with closing the deal.

• Don’t discount the little things or the more classic and traditional methods – not everything has to be new fangled and fancy. A solid and information-rich, easy to use website; or brochures and flyers still have credibility. Employing both the classics and the trends can broaden your target audience and generate the maximum amount of business.

• Include more client-friendly information such as testimonials, guarantees, feedback, referrals and surveys that offer real life ‘proof’ to your advertising campaign. Plus you can align yourself with recognizable groups that stand for solid and sound business to classify your firm as trustworthy and secure.

“ Treat the sale like any other task in your ‘to do’ list.”

• Never let your own belief in your product falter – stay enthusiastic and find ways to truly believe in what you are offering. Upgrade and maintain your service levels so that you always feel that what you are offering is honestly the best product for the job. Potential clients can see right through an insincere sale and will look immediately to the competition.

• Look into offering specialty services, or find a hole in the market that might need to be filled. Engage your team members with these challenges by offering incentives or recognition for instigating new strategies or generating new business.

• Don’t discount the continuous exposure that advertising can provide. Try something new and venture into a niche previously ignored. Be creative and think outside of the box on how your service or product can benefit non-traditional markets and venture into them with zeal.

Successful marketing comes from a clear understanding of your unique core differentiator – that’s what differentiates you from your competitors. If you aren’t sure about the compelling reason why your prospective clients should be contacting you then it might be a great time to contact us. We have resources designed to help you with this critical phase in a cost-effective way.

Training can mean seminars, lectures and workshops, manuals, memos and meetings. There are many ways to interact with your different divisions and to get them motivated as well. Take advantage of the many organizations out there that run training programs in diverse and interactive ways. If you want your team members to participate and actually benefit from training, it’s vital to keep it interesting or their attention will be less than focused.

“Time in can become money out.”

With well-trained team members you will find that your client satisfaction increases, which in turn generates more lasting relationships. You will also witness a motivated and driven team. When team members feel empowered or inspired by their work, they feel invested in their work responsibilities, and therefore take more interest.

The problem most firm owners find with training team members is the inability to tangibly weigh the benefits against the costs. What are the economic frameworks to judge the profits generated based on the training? You certainly aren’t evaluating conventional returns – training is an intangible resource.

One way of viewing intangible benefits such as training is team member happiness, or job satisfaction. Lack of training leads to lackluster performance, often because team members feel inadequately prepared to take on more difficult and rewarding tasks. With the right equipment (in this case, knowledge or information), the team is more confident and more likely to accept challenges, which in turn boosts productivity.

By viewing training programs as conventional commodities, you will never see the economic benefits. Look to the ways in which training is a catalyst to other less tangible assets. A solely monetary view is no longer a comprehensive one. And remember that as your advisor, we have the tools to help you measure critical areas of your team members’ satisfaction and help you build a winning team.

REACH OUTSIDE THE BOX

It’s easier than you think to reach outside of the so-called box and generate new clients. Don’t be afraid to ask your loyal clients to refer your services to their own contacts. Often classic word of mouth tactics can open up an entirely new world of business.

In 2004, at its worldwide partner conference, Microsoft pitched security as a competitive advantage. Now seven years later, how has information technology security affected firms and has it indeed proved to be a competitive advantage?

With the rising power and influence of the Chief Information Officer, it seems Cressen’s observations and Microsoft’s pitch was right on target. Information is just as valuable as the money managed by the Chief Financial Officer, and protecting that information is a competitive advantage.

Protecting your IT assets should be your number one priority in business, and information and technology are part of these recognized assets. To be a savvy competitor in your market, your firm should be as protective of its innovations and ideas as it is of its financials.

Ways to ensure security can be simple, including virus protection software and email safety (i.e. deleting archived messages and attachments), setting up firewalls and keeping software systems up-to-date.

“Protecting your IT assets should be your number one priority in business.”

Secure your networks using full encryption when connecting remotely and lock down wireless networks. Other tips include backing up securely and frequently, protecting your office premises and taking extra steps to ensure the safety or your laptop and other mobile devices.

When it comes down to it, digital security keeps information from leaking into the hands of the competition. It may be a costly initiative, and one that requires consistent attention and upgrading. However, the payoff is a simple and concrete benefit: IT security can protect your intellectual property from willing adversaries, disgruntled team members and cutthroat competitors.

The competitive advantages of IT security are not easily measurable – and nor is the risk that your firm may face. In order to take stock of the risks and reap the rewards, avoid using terms such as “monetary” and “measurable” and focus on competitive advantage, long-term survival and compliance.

Succession planning can limit dissemination and downfall, and can be a simple step-by-step process that will ensure future success. It requires a long term approach: investing in mentorship and leadership can reap benefits as many as 20 years down the line.

“To assume there will be a natural successor is a common mistake.”

Start by taking time to consider your ultimate goals (but be aware that goals, and therefore plans, will fluctuate). Build flexibility and evaluation periods into your plan. To assume there will be a natural successor or that your most desired candidate will want the position is a common mistake, especially in family-run firms.

Factor a wide range of possibilities into your plan. In order for a next of kin to seamlessly take over and generate a flourishing legacy, they must have the willingness, desire, training and know-how required for any entrepreneurial position.

Set milestones in your plan that include evaluation times and periods of consideration. You need to account for changing situations – have one or more of your children now enrolled in college, entered a master’s program or taken a job at a competitor’s firm?

If your planning leads you to selection of one family member over another, try not to let feelings, favoritism and emotional attachments play a part. Remain as impassive as possible yet respect family bonds. Try to stay true to your original succession ideal, and make the decision based on who has demonstrated their ability to maintain your desired legacy.

Keep family members and important players in the know, sharing your thoughts and ideas along the way. Minimize the element of surprise or you may create hurt and dissatisfaction. When a decision has been made, be prompt and clear and do not hesitate to put the orders in motion. Do not leave things in a period of limbo and uncertainty.

A sound suggestion is to set up a board of trusted team members or colleagues to be your counsel. This keeps you informed and also allows your colleagues and team members to feel that they have a part in the decision making process.

And don’t write yourself out of the plan. Keep yourself in mind as your make decisions and craft out how you will remain part of your legacy after the changeover.

Remember to give thought and equal consideration to all options, even if the years eliminate some of them. You never know what financial environment you might find yourself retiring in, and in some cases the selling of the firm may prove the most profitable and stable way to take care of your loved ones.

As experienced professionals we have the expertise to assist with succession planning. With our assistance, you can increase the chance that all parties will achieve their desired outcomes.

Cash flow, as they say, is the lifeblood of any firm. It does not matter whether you are making thousands of cars a year or selling lemonade to neighbors, if you are stuck waiting for payment from clients, then you cannot pay your suppliers for the next batch of products to sell.

“Here are 10 tips to help you improve your cash flow.”

These 10 tips could help you improve your cash flow.

1. Consider giving discounts for payments upfront. Some firms will have a discount window of a month that clients must pay within to receive the discount. This is easier to enforce than a penalty for late payment and is more attractive to clients too.

2. Take as long as you can to pay your bills without incurring a late fee. If a supplier gives 30 days, then take the full 30. Pay regular suppliers before others; early payments can generate goodwill and improve the likelihood of obtaining credit.

3. Invest surplus funds in a high-interest bearing account or other financial vehicle. There is no point having idle money in a firm, but just make sure you can get your hands on it quickly if the need arises.

4. Create a cash flow forecast. Know when the money should come in, when it is likely to come in, and when you will have to pay it out. Knowledge is power as it will help you prepare for the inevitable delays.

5. Issue your invoices as soon as possible. This is one task that should be first on the list every day. Once sent, make sure you follow up the day after the invoice is overdue. A polite phone call to jog the memory or a second email can help things along.

6. Give clients many options for payment and emphasize your preference for electronic payment such as direct debit.

7. Split payments for longer projects so that you are not waiting for the full invoice at the end of the job. This has the advantage of providing some security of payment as well as increasing cash flow.

8. Monitor your stock and replace products that are unlikely to sell. Focus on the better selling, higher-margin items.

9. When things get tight, triage your payments. Call all your suppliers and negotiate extended periods or deferred payments. Do not pay the biggest debt first- pay the most important.

10. Link sales commissions to invoices paid rather than revenue billed. A cold call from your accountant to a client asking why a bill is unpaid is going to be less well received than the sales rep giving a friendly reminder at the next meeting. It also gives the sales person a reason to speak to the client again – and perhaps lay the ground for another sale.

Email etiquette is partly set by expectations. If you are in a role with high levels of communication, people will grow to expect a quick turnaround to their questions. This can be frustrating and annoying, but if they are clients it can also be a great opportunity to show off the company’s customer service.

In these cases, how you handle vacancies from your desk is obvious. The Out of Office Assistant in Microsoft Exchange (or equivalent in other email application – they all have them) can let people know that you will not be able to give them the instant response they may be expecting.

The away message should give a brief description of what you are doing, when you will be back and when you will return their emails.

It could also leave an alternative form of communication (“if it is urgent please call my mobile”) or point of contact (“if urgent please ring the receptionist”).

“Don’t leave your clients guessing.”

An out of office message shows your email contacts that you respect the effort that they have made and that you value what they have to say.

It also acknowledges receipt of their message, if only by automated response. Email is still not a 100 percent reliable form of communication; spam-trapping software can catch legitimate emails, and they can get accidentally deleted by a wrong key press, or an email server can crash and messages disappear.

When someone fails to get a reply to an email they will inevitably wonder whether the receiver has reacted negatively to the email’s contents. Was it not important, offensive, or over-reaching?

Even if you are not in a customer facing role, using an out of office responder is a professional touch that can increase the likelihood that a client or business partner will try to get in touch with you again, just because they will expect an answer if they do not see the auto-responder message.

Of course, you need to make sure that when you are in the office you respond to emails promptly. If you have an extremely busy schedule then set aside a half hour in the morning and in the afternoon to respond to emails. Regular contacts will know that receiving a response in the middle of the day is unlikely and will modify their behavior and expectations accordingly.

Google and Microsoft have instant messaging applications that can transmit your status to all your contacts as either available, away from your desk or busy. This can reduce the amount of phone tag where two people get stuck in an endless round robin of voicemails.

For most people, email is the preferred mode of communication. The key is to set up a predictable routine, stick to it, and treat the emails you receive with the same respect and attention you hope other people treat yours.