Archive for the ‘Planning’ Category

The Warning Signs in the Recession

Tuesday, June 23rd, 2009

Very often the experiences of SMEs in a downturn are just not consistent with what we are led to believe. The bank balance is healthy (or at least OK), sure we are having to discount more, everyone is looking for a “deal“ but things could be worse. We are still very busy.

Just stop and think for a minute. Let me suggest as possible backdrop:

  • Business activity has reduced so to try and maintain volume margins are squeezed by discounting.
  • Purchases are down due to the slow down so Creditors have reduced.
  • Stock (if this is a feature of your business) is being used to fulfill orders in lieu of purchases.
  • Debtors are paying, later maybe, but paying.

All this change in activity can show itself in a better bank balance, initially. This can be euphoric but it can lead to a false sense of security.

It is essential to measure and monitor the level, type and profitability of sales or contracts and check the impact on the break even for the business.

If there is an adverse impact on the bottom line then corrective action must be taken and quickly.

Areas to consider for priority improvement are:

  • Sales Conversion Rates.
  • Sales Profitability.
  • Cutting out Waste in ALL Processes.
  • Get the Invoice out as soon as possible.
  • Review Terms.
  • Focus on Credit Control.
  • Monitor Preformance Monthly, Weekly or Daily.

At Practical Partners we specialise in helping you and your people to do just that. Real Business Improvement through people first and processes.

For a free initial meeting to discuss the issues facing Your business call David Hudec on 07809 839 880.

Steering your way through the recession

Monday, May 18th, 2009

During the good times, riding on the crest of a wave and with the economic tide high many small businesses weren’t too concerned about the general direction they were heading, the course they took or the hazards they faced.

If no obstacles were on the radar then there was nothing to worry about. Radar can have a very long range after all. Mistakes and waste were annoying and costly but probably not critical.

Now the economic tide has gone out for most small businesses, the clear water to sail in has become restricted and performance is vital at every level of the crew, the long range radar seems somewhat irrelevant.

Now the most important control seems to be an echo sounder, measure the depth and avoid the previously hidden obstacles that could sink you.

When the fear of not knowing exactly, or even roughly, where you are really hits then there is a tendancy to do one of the following:

  • Nothing.
  • Change everything and loose sight even further.

What really needs to happen is

  • Take stock of where you are in a rational and controlled manner.
  • Identify the good and the bad.
  • Make sensible assumptions.
  • Plot the most appropriate course and
  • Constantly monitor your position.

In essence Business Planning.

If you are unsure of how to do any of the above, don’t know where to start or just want to bounce some ideas off someone then I am available to do just that.

With 25 years experience in running my own manufacturing business and, since 2005, I have been helping others with the running of theirs.

I am offering a free initial planning session where we can discuss the issues relevant to your business and do some really effective goal setting to start the process.

Leave a comment, email me or simply call 07809 839 880 to arrange your visit and start to stop the rot.