Tag Archives: 4 Pillars of M.O.R.E

Suppy & Demand’s role in Strategic Planning

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A question was submitted to address-

“…how to assess and compensate for Supply & Demand in a small business?”

Supply and Demand is one of the necessary factors a business needs to aggressively monitor due to its direct correlation to the businesses ability to generate revenue.  Supply & Demand is one of the 5 key components we look at when assessing the “Products Pillar” of any business.   While  the Laws of Supply & Demand would be considered economics and financial planning(most of which I place under the Operations Pillar), most of the control an organization has over it aligns with its products designs and features.

For example creating that “uniqueness” in your product line is one tactic you can Strategically Plan to increase the Demand for your product.

First some background – This question originated from a M.O.R.E Assessement ©  Our firm refers to the “4 Pillars of M.O.R.E.©” (Products, People, Operations, & Marketing) that all businesses need to generate revenue.  Depending on the scale or scope of your business and industry the method to assess each of these can range widely, but the importance of each of these Pillars is a constant.  When they work together, you generate more revenue.   So, assessing and developing each of the “Pillars” is vital  to develop your businesses ability to create revenue, so these 4 areas are always our starting point for assessments.LearnMore-Blue-Primary-16

 

Assessing Supply & Demand for your Product

Many businesses utilize purchased Business Plan tools (templates, software) or SWOT/PEST analysis methods when determining existing competition and direction, which is an important part of assessing Supply & Demand.  While these are good tools, they can become easily biased by whomever is completing them.  I have read many SWOT analysis that simply don’t represent Threats or Opportunities with in a company well.  Thus if a SWOT is the only format used, it can lead to poor or unwise strategy and false outcomes.  I always recommend more than one set of eyes create/debate outcomes when using this type of assessment.  I DO think they are valuable tools and our firm uses them, but in conjunction with other tools.

The process we tend to use frequently is referred to as a “Market Study”.  A Market Study is an in-depth, qualitative analysis process which employs many tactics.  Each “Study” is a relatively custom designed because every organization or brand is unique.  Brand development differs in every organization based on resources, skills and leadership. When performing a Market Study, the process is gathering information from key representatives of every key constituency possible that may create, utilize or experience that business product.  Perceptions are confirmed about the product/companies current and former character and user, and enough data is gathered to support future direction. Using an organizations vision and mission needs to be a focal point.  A Market Study provides holistic data (internal & external) to help answer: What niche(s) could the organization occupy and what is distinctive about its positioning?  Where as a SWOT is merely a component of a Market Study that is generally produced internally.  While there may be overlap, it is not as thorough.

Surveys are used in most Market Study’s and are an excellent way to collect data on a variety of topics and also works well for supply and demand studies.  A properly designed survey has the demographic data, customer preferences, and motivators data needed to help position your products correctly.  C.S.Simons Consulting performed a Survey in 2015 to determine why people hire a consultant, which significantly improved how and who we speak to.  Click on the Survey link to take our brief Survey!

Benchmarking is also a recommended step in a Market Study and involves competitive data and interviews to discover strategies or missed opportunities of similar businesses. Properly designed conversations will provide significant information you can use for Supply & Demand assessment.   Generally both companies gain from the experience and can also lead to improvements in Cost Containment & Labor Optimization.

Territory is another key consideration when determining Supply & Demand.  What is the radius for your product appeal ? (assuming a physical address).  This changes radically by product or service and by industry, but the key is to understand buyers preferences and motivators as it relates to what you sell.  How far will they go to find us?  While it sounds obvious or easy, it may not be.  The second part of that consideration is how many like “you” are there within this radius?  Competition is good to an extent, but how do you determine over-saturation?

Quick example;

Many people want Bankers, Lawyers, or Accountants close to where they are located but won’t think twice about traveling for a specialty doctor or upscale retailer.  Determining if you are a basic service or destination service in the mind of your customer is key to knowing the radius they will travel to give you their money.  Of course, the farther they travel the higher the expectations and the more you risk if they are unsatisfied.  But, most will easily justify spending more if you are a destination than if you are basic.  (Law of Supply)

How to compensate /correct for Supply & Demand deficiencies?

If you don’t have….

Location, Location, Location,

you need

Marketing, Execution, and Follow up

Marketing – Customers need to know  either 1) your name or where you are  AND 2) why they want/need you.  Tactics and Campaigns will come and go, but to maintain customer Supply & Demand, Marketing professionals may be your best bet.

Execution –  What ever the Marketers are saying you “do” or “sell”, you better make sure the people your customers encounter in your business or products they buy from you,… do it.  If you say you have great customer service, you need to make sure they encounter Excellent service, if your marketing says your product will help them loose weight or look sexier, it better or else it will effect your Demand.

Follow up – No matter what you sell, if you have customers, you should ask how they liked the product.  The number one thing you need to do once they have purchased something, is to get them (or their referrals) to come back and buy more!  I recognize this can be more difficult depending on what you sell, but the fact remains that you need feedback to help determine if you are executing what your Marketing says you are.  No feedback or not even asking for feedback can be very dangerous.

  • Ever go to a local restaurant where the food was so-so(or worse) and no one ever came back to ask “how is everything?”.  You leave less than impressed. Has your likely hood of recommending or returning gone down?  Maybe. But what if you traveled an hour to go to this restaurant you “heard about” and had the same experience.

What is your likely hood of going out of your way next time to return? 

There goes your Demand

 

Key times to RE-ASSESS your Supply & Demand

It’s important to note that Supply & Demand is just one of the 5 key factors our company looks at to assess the Product Pillar for revenue generation and therefore not the only consideration when assessing your products design and strategy.  Reviewing the Supply and Demand for your organization/product can be done at any point of the business life-cycle.

Key times to do this are:

  • At Start Up
  • Any time your business encounters a major change like new leadership
  • When planning Expansion/Relocation projects
  • Opening new locations – know WHY they find you, don’t assume they will
  • Considering new technology implementation
  • Creating a Strategic Growth Plan
  •  If it has been more than a few since you looked at this you may want to because of the rate of speed technology changes.

Internet Marketing is radically different than it was 3 years ago, thus HOW people are finding you IS different.  The internet has shifted buyers motivations in many industries, how has it effected yours? I always have a plan in my back pocket for a sudden change in sales (+/-) and I have many systems in place to tell me where or why people are finding me.  This data is reviewed periodically and is the basis for changes in Business Strategy.  I highly recommend this be given some thought by owners and operators.  I don’t have to tell you how quickly things change and your customers needs and loyalties are changing just as quickly.

This is only the tip of the iceberg on this subject and how to use the information for product development  and building your business.  Feel free to contact me if you would like to discuss this further or if I can help guide you to some Marketing professionals I work with to help.
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Carpe diem!

Why Marketing alone can’t save your business

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During a recent google search, I found an interesting article that listed the top 50 questions asked to “Consultants in 2016”. Literally 48/50 were related to some form of Marketing, Social Media or SEO.  While those are very important reasons to look for an expert, I am concerned(and my business shows) that many businesses are missing out on other fundamental ways to help their business.   Given National closure rates are so high for Small/Medium Businesses, do people think Marketing will save their business?  What are the top reasons a business fails and how does Marketing help avoid that?

The number one concern a business owner should have is how to maximize their businesses ability to generate revenue.

Marketing is one of the 4 most important areas to develop and can not be overlooked.  But not developing the other three can jeopardize the sustainability of a business. I have seen too many instances where an organization improved efforts to increase the customer base through Marketing, only to find the business couldn’t capitalize on the new found popularity or volume.  If your first reaction to this is “that’s a good problem”, you are wrong.  It is a problem that may hurt your business more than it helps it.  To increase revenue in a sustainable way, you need to consider building on all 4 key areas.

The 4 key areas (we call them Pillars)

Products – People – Operations – Marketing

–M.O.R.E. Business Assesment©–  by C.S.SimonsConsulting

Case in point –
A classic example is the restaurant that creates a great coupon that is hard to say no to. People come in droves and crowd the restaurant. Tables are full, the Bar is crowded and there is a wait list as long as your arm.

Successful Marketing right?

Then things start to go wrong, the food comes out late, servers become overwhelmed, orders begin to get switched around and as a result the tables don’t turn. Then the customers at tables start to become frustrated and before you know it, they have such a bad experience, they don’t want to return. People waiting for a table end up waiting twice the time they were quoted.

Perhaps the house buys a drink or dessert to appease, this calms many people but that may not work on everyone.  Customers take out frustration on your staff.  Your staff takes out there frustration on each other.  All in all, it turns out to be a tough night for that restaurant.

But the pain continues because customers who want to vent are just getting started.

Customers proceed to tell there friends what a bad time they had when they’re at work or through social media and this can linger for some time.  So while the coupon brought increased sales initially, the other areas of the business that weren’t ready for this suffered.  The servers don’t make($) what they expected due to the restaurant failing, the kitchen crew is frustrated because they weren’t set up for that kind of business, and the product quality suffered due to the volume.  Marketing people call this a successful campaign and while sales were up temporarily, they then slumped even lower than before the coupon was sent out.  Damage has been done.

We all know this story, and it can happen in all industries.

This problem was created by an over emphasis on Marketing and not insuring that other important components needed were addressed.  Generally this is a type of ad hoc marketing, and don’t confuse it with “strategy”. A Business Strategist would not only look at ways to get more people through the door, but make sure the business was equipped to handled the increase.   I have literally seen Groupon tactics destroy businesses, they will get people to your business, but it is unlikely you will make money off the new business or create repeat customers (which is what every owner  that signs up for that service wants).  I am all for Marketing.  Marketing/Advertising is to increase demand or volume, just make sure your business can meet the demand you create.

So if Marketing won’t save my business, what should I look at?

FACT:

90% of business fail due to lack of quality management

                   48% due to incompetence

                        42% due to inexperienced leadership

   -International Management Consultants, USA

The SBA, SBDC, Dunn & Bradstreet, IRS &  Census bureau will also show similar statistics.

4 ways to achieve a sustainable growth in your revenue
  1. Learn to evaluate your business.  When you are in a position of growth, expansion or even for a limited promotion like the coupon in the case study above, make sure you look at the 4 key area’s needed to generate revenue for your business.  If any of those area’s slip during a period of increased advertising, understand it will jeopardize the results you had planned.  Maintaining product standards, Quality Assurance measures, and Brand management are the tip of the iceberg to insure daily execution.  Daily execution is what your customer base will judge you by and ultimately determines everything from customer loyalty to profitability.  Much more information on these 4 areas (Pillars)can be found on our website.
  2. Don’t confuse sales with growth.  Sustainable businesses create strategies that take all 4 areas and develop each of them to meet desired goals.  Top line sales don’t always translate to growth especially if you can’t sustain that level of revenue.   Training everyone in the company to focus on all 4 areas can lead to rapid, organic growth for a company that is sustainable.  In short, develop your people and they will develop the business.  Give them systems and tools that help them achieve their job.  When systems, tools, training, and goals are all focused on developing your products, then you have something to Market.  Never Market under the “Strategy” these others will “fall in line”.  This is a common mistake and they seldom do.
  3. Don’t over rely on online development.  Unless you are strictly E-Commerce.  As mentioned above, 98% of the questions searched about consultants were for Marketing based consultants.  Yet, Marketing usually doesn’t make the top 5 reasons why businesses close.  Marketing Consultants are important in today’s business world and C.S.Simons Consulting works with several extremely valuable Marketing experts, but there is more to developing your business than a Marketing Expert can offer.  They are part of the solution, not the whole solution.
  4. Know how the pieces connect.  The business “Pillars” I refer to have overlap and it can be confusing as to how they fit together to build a business.  Further more, what is needed to support each pillar can change by industry, by business size and even business age.  Knowing what is needed to get you to the next stage is the key to growth & sustainability.  If you think all your organization needs to grow is better or different Marketing, I strongly recommend you look at the other pieces of the puzzle to.                                                               LearnMore-Red-Primary-16

All businesses need to Market.  Many outsource this for a variety of reasons and many of them are good reasons.  The point is to understand the impact of the marketing tactics to the other sides of your business before they are launched.

If you really want to increase your revenue or strengthen your business make sure you are defended against the top reasons business fail in the first place!

Carpe diem!

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Non Profits & Small Business – How to plan a Communications Strategy

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Content Management, Frequency, and Target Audience are but a few of the components in a Communications Plan.  Non Profit(s) and Small Businesses need to be very strategic on what messaging they need and which tactics to use when creating a Marketing Campaign due to the amount of time needed and financial investment it takes for these to work.

Knowing the attitudes and motivators of your buyers/supporters/followers has a direct impact on measuring  a plans effectiveness.   The following are excerpts from a white paper published by C.S.Simons Consulting  in 2012 designed as a FREE resource for those businesses who recognize the need for better effectiveness in their communications but have limited funds to hire a professional Marketing firm.  There is also 2 worksheets available to expedite your Communication Planning, feel free to contact me if you would like a copies.

Why develop a strategy around a Communications Plan?
  • Planning contributes greatly to success.
  • Increases effectiveness of messaging
  • Identifies key users and followers
  • Engagement, engagement, engagement
  • Keeps entire organization focused on Strategic initiatives

What is Strategic Communication?

 Strategic communication is planned and accomplishes a specific outcome.  It is essentially a project plan for everything you may need to “Market” a product, service or business effort. Designing one will ask the right questions of you as to how you want it presented(see below).  It is designed ahead of time so your company controls the exposure and narrative that puts your product/service/effort in the best light to the people or businesses you want to see it.  Otherwise you risk the reputation and message being delivered.  Below is a checklist to help you organize a Communication Plan of your own.

  • Strategic communication is targeted to a particular audience or audiences utilizing known demographics about your customer.
  • Strategic communication is designed and delivered to produce a desired result
  • Strategic communication aims for results with the best possible use of time and resources.

Strategic communications should be tracked, with measurable performance.

Some key questions to consider at the start of the process are:
  • Where are you now and where do you want to be?
  • What will you need to do to get there?
  • What role can communication, education and training play to achieve your goals?
  • How will you learn from your experiences?

 

 Be careful! – what to avoid
  1. Communication is part of the entire Policy and Strategy implementation process.   To implement a Communication Strategy there are many projects to be prepared and undertaken. There must be an understanding of what your customer wants from you, who your customer is and where to find them.  Demographics, Attitudes and Motivators is how it is referred to with in the Marketing world.  These are addressed first prior to forming a Communications Strategy around how to effectively have that group pay attention to you.  Most business people or Executive Directors would agree with this yet this stage often receives little attention until much later on.  Often communication is considered only after plans, polices or projects are prepared which strongly reduces the potential for successful project implementation.
  2. Ad hoc communication is not effective.   There is an enormous difference between communication strategically planned and that without strategic planning.  It will miss the target audience or deliver the wrong message.  You may have very little time to get the attention of your audience, so every little effort needs to be effective.

 

FREE Checklist for planning a Communication Strategy

 Message: This will comprise a combination, of WHO you are trying to speak to, and WHAT you want them to remember or HOW you want them to act.

Timeframes & Frequency: You have to clarify if you are designing a communication strategy with long term goals, a communication plan with short term goals or a communication plan for a specific project. A Strategic Communication Plan will likely utilize all three types of communication plans and is a comprehensive approach for long term messaging.

Target Audience:  To create a master strategy, match the goals of your strategic plan to groups identified in the recent membership survey.  The membership survey results provide detailed information on demographics such as age, proximity to lake, length of membership, and communication preferences.  Use this information to choose which medium to communicate to each demographic.  To broadcast a particular message, many organizations choose multiple mediums and alter their message slightly to improve connection with a particular demographic. Much of a communication program success relies upon the content connecting with its target audience.

Budgeting:  You must consider costs when planning a single event or campaign style communication.  This needs to be in the planning phase to insure its completion.  Too often plans don’t become reality because the finances weren’t thought of ahead of time.  Include time of any staff in your estimation even though it is part of a different line item.  When you want to determine the success of a tactic, all costs must be considered.  Include any print materials, ad space, postage, graphic design, sponsorships, office supply and smallwares (table, chairs, poster board, raffle prizes, etc)

Content:  The body of the communication and the vehicle for reaction.  Utilize demographic information to “speak in a language” that the reader will understand.  Incorporate grabbing headlines, pictures or graphs whenever possible as this is a proven to increase attention and action.

Tools & Format;  what method or medium would be best suited to deliver message and achieve results.  Consider the target audience, and how to best reach them based on prior success.  If trying to reach a new target audience, which design works best for the market? Is capital expense needed for a first impression?   Is graphic designing needed for a mailing or email blast?  Print ready advertisement design?  Pictures needed for social media or press release?

Instrumental style communication – You need to be conscious of whether you are dealing with a communication campaign that is organized to raise the interest of the public, politicians and other special groups for a particular issue, or to generate support for policies or plans.

 Interactive style communication – A plan is for establishing active dialogue with certain groups and fully involving them in planning, implementing or evaluating (Feasibility study)

 Maintenance and Accountability;  to assist with daily management of any communication campaign, the creation of tools to help monitor message, frequency, placements and responsibility should be utilized.  Examples of such tools are provided in the tools section of this report.

 5 considerations for Successful communications
  1. When implementing, regularly check how feasible the plan is, and what disasters may occur.
  2. What will affect the success of the message? Which stakeholder is it designed for?
  3.  Be flexible in adapting the plan in case of shortages in money or time.
  4. What will people’s reaction be – What do they want in the communication?
  5. If the communication is announcing an event or action item, how much time is given for members to react?

 

When to use a campaign and when to use single source messaging

A campaign can be designed for virtually any application, after all, more is often better when done right.  The primary goal behind a multi-tactic campaign is to leverage each individual tactic/method to achieve greater impact with the desired message.

Some occasions for use of a campaign

  • To educate a population on a particular subject
  • To tell a story of your brand
  • Establish a dialogue
  • To create recognition of a subject
  • Public Relations
  • To display a style or belief system

Single source messaging which is a one time event through standard media such as direct mail, email, website or online posting and is designed as a “one and done”.  It doesn’t have a direct connection to either the message that LSPA has agreed to or a direct connection to the mission of the organization.  While it is important and informational, it may not lead to a call for action like those in a campaign will from its recipients.

Some occasions for use of single source messaging

  • Scheduled events
  • Confirmation of expected information
  • Thank You’s
  • Annual Reports
How Non Profits can identify the role for a Communication Plan

 To identify the role of communication it is necessary to ask:

  • What is the current Knowledge, Attitude and Practices (behaviors) of the target groups and stakeholders involved?
  • What reactions do you want the target groups and stakeholders have?

It is also important to clarify what are the desired changes in the people involved in this issue:

  • Is it to change the attitudes of people and/or organizations
  • change the mind sets – the way people look at a certain issue
  • change the way people feel about an issuer
  • change behavior? (more difficult)

To assess the role of communication in this change process it is necessary to understand if the problem is due to:

  • A lack of awareness that the issue is important
  • Negative attitudes towards the issue or the solutions
  • Lack of skills or “know how” to make a change

In these cases the different states of knowledge, attitudes and practices need different communication solutions, and communication may be used as a sole instrument.

 Frequently made mistakes in communication planning

 The objective of the communication activity is not properly defined or is too vague

  • The objectives are too ambitious to achieve
  • There is lack of knowledge of what is precisely wanted from the target groups and what is required to achieve the result:
    • e.g. is knowledge needed? new skills and practices?  
    •   e.g. do we need an attitude change from them?
  • Communication goals are set to change other people’s behavior and values without understanding how the behavior change can take place
  • The fact that people need social, economic or other benefits for any kind of behavior change is not considered when objectives are defined
  • Indicators are not defined for the communication targets/objectives, making evaluation of the outcome difficult.

 

For more on this subject or to discuss additional ways to help your organizations Ability to Generate Revenue, contact C.S.Simons Consulting.

 

Carpe diem!

 

 

Non Profits & Small Business – 3 Keys to Finance Basics

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Businesses of all sizes will eventually need to prepare and manage three basic financial statements.  They are included in any comprehensive Business Plan and I will show you how they are commonly used for business strategy and routine Operations Management decisions.  These are the Profit & Loss Statement (P&L), the Balance Sheet, and the Cash Flow Statement.  I admit these can be both intimidating and confusing yet the sooner a business can use these as a compass the sooner they can be financially independent.

They will be asked for by any Business Analyst, Loan Officer, or Financial Advisor of your business so what are they?

Defined

Profit & Loss Statement (P&L) –  Also called an income statement.  This is a consolidated record showing how much you have spent (expenses) and how much you have made in revenue.  The two are calculated showing what your net income is over a specific period of time.  The period of time these show may depend on the industry you are in and typically are either by calander months, fiscal period(typically 28 days), or weekly.  It is also very common to have quarterly P&L showing a consolidated series of numbers that help you determine if it is time to sound the alarm or not.

Balance Sheet – This is a dashboard of your companies overall health.  It provides a summary of the businesses assets, liabilities and net worth.  Essentially the balance sheet tells you what you own and what you owe.  Assets are resources your business controls such as cash, equipment, buildings, furniture, inventory and money owed to you.  Your Liabilities will be the obligations you owe to others such as payroll, taxes,  Accounts payables or loans.  Your net worth is what is left over.

Cash Flow Statement –  This report demonstrates how cash has flowed in and out of your business over that time period.  Typical software programs to produce all of these would be Quicken or  Peachtree if you do your numbers your self (opposed to an Accounting Firm) or for smaller or really savvy businesses Excel works just fine.

How you use them – the 101

P&L – Depending on the scope of your business the P&L Statement can be very complicated or extremely simple.  The key is to have it inclusive of money going in and out of the business over a set period of time.  All expenses should be categorized so that at a glance you can tell why and where they are up or down from a previous period or the “forecast” budgeted amount .  Similar with revenue.  The more information the better because this tool will not only help track history, but it will help you predict future spending in most areas.  The expenses are commonly broken down into two categories; “Controllable and Non Controllable”.  Examples of non controllable expenses would be rent, loans & taxes.  Controllables are pretty much anything you can say “NO” to (much more on that another time).  This report will subtract the expenses from the revenues and show your “net profit” at the bottom.  This is a very important report for the Operations Management team to utilize and if used properly it can be very effective in containing costs and contribute to a positive cash flow for the company.   But it is not all inclusive and needs to be used in conjunction with the other two forms.

Tip – A “best practice” I have all my clients do is when using a P&L is to have all expenses broken down as a percentage of total revenue that is expected.  Manage by using the percentages and not necessarily the dollars on the form.  Ex:  (Forecasted Revenue is always 100%).  Say labor is expected to be 15% of your revenue $.  Then lets say Revenue is down a little.  The manager can either adjust labor or not during that month.  Well if labor comes in at 14% of  projected revenue, you may still be ok in that category.  If labor comes in at 20% because the manager did not use the P&L to make adjustments, then you have lost money.  Same goes for every line on the P&L.  The more information you have, the better your daily decsions could be!

Balance Sheet –  This report is generally broken into a few areas.  Assests will be broken into categories depending on how accessible they are or how quickly you may expect to use them.  “Current or Fixed”  is common terminology.  Current assets, often referred to as “Liquid” means you could use it today if needed (cash, accounts receivables, or short term investments) and are usually listed first.  Followed by Fixed assets which may be a building or equipment you own.  While you could free up money invested in these it may take some time to access it.  Under Fixed assets you are likely to find “Depreciation” which is the amount of money estimated to be used up from the fixed assets. Meaning,  if you had to sell them today, what would they actually be worth?  If you subtract the depreciation from the Fixed assets you will determine how much is available or “net Assets”

Liabilities are listed next and they are everything that the business owes to someone else.  Accounts payable, taxes, loans, wages, etc.  Similar to assets these are also categorized by time frames, although Liabilities are listed by due dates.  If your business has a invoice that has 90 days on it, it won’t be listed on your P&L, but will be listed on your balance sheet.

Both the assets and the liabilities are then subtracted from the assets to determine a businesses “Net worth” or “Owner Equity”.  In short it is a snapshot of what you would have left if you had to sell the business today after you paid everything off that you owed.  Most would agree, it is a good idea to keep an eye on this figure!

Cash Flow Sheet –  depending what type of business you are will determine the frequency in which you use this report.  Any organization that may have an unpredictable revenue stream will rely on it more frequently.  As one Non Profit client put it, “this report essentially shows you how much air you have left”.  This report will not only list what cash is expect to come in and go out of the business, but it calculates a time frame of how long the business could continue should things change drastically.  Generally measured in days weeks or months depending on the size of the Balance Sheet numbers.  In a larger corporate environment this is only reviewed by the most senior level Executives but for Small Businesses and Non Profits, who tend to live “day to day” this can be a helpful report to review quarterly.  Because using just a P&L, like so many companies do, can be deceiving.  It may look like you made money during a specific period but other expenses not appearing on a monthly P&L may come to terms.  Remember the 90 day invoice I mentioned earlier?  Well that may also need to be paid which can throw off your cash accounts.  A Cash Flow sheet would show what will be due and help you plan for it so you don’t become over extended.  As mentioned this is particularly important for many small or seasonal based businesses and pretty much all Non Profits.

As mentioned most software packages on the market will take a lot of the work out of creating these important reports for you.  All it takes is a small time investment to load all the information on a daily basis.  If you prefer to hire an Accounting Firm to get you started, I work with several I would be happy to recommend.  I guarantee that using these standard Financial tools will improve your businesses ability to generate revenue.

For more business basics click here for information on our Business Boot Camp Workshop

Carpe diem!

10 steps to a better Inventory Process

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To many it is a dirty word, but most businesses understand that “taking inventory” is a necessity and must be dealt with.  The frequency of it is often determined by the industry and it ranges anywhere from once a week to once a year.  But Inventory is an extremely important tool and when managed properly will not only add to a companies profit line, but contribute to keeping your cash flow lower.

Many dread the process.  It can be very lengthy and tedious.  We thought it would be helpful at year end to pass along some tips to help make this process more efficient for you.  Simply put, the more organized you are, the easier and quicker it goes and the better you do it, the more you know where your money is.  When working with clients, I often offer to do an inventory with them.  They usually jump at the offer for help, and it gives me great insight as to how they run their office and thus lets me know where to dig in deeper.  The goal is usually to do a better job with Inventory and save them time doing it.  I have listed those things I look for below.

Inventory is a process; don’t view it as a task.  So many look at it as a one time task of counting what’s on hand.  That part of the process is referred to as the Physical Inventory, but it should not be viewed as the only component.  What leads up to, and happens after the Physical Inventory is equally important in the process and each adds to the efficiency of the other.

Why is this process so important?

Inventory takes a lot of time to perform correctly.  What if you could save ½ hr or more every time you do it?  I save most people at least an hour by having them follow the steps below.  Oh, and also….this is money were talking about.  Inventory is important because the dollars it identifies are vital when figuring out your product costs, so the more detailed the collection process, the better your product costs look.

If you don’t have everything I list here in place, it may take a few months of implementing to really see the effects of how much time it will save you.

Here are what I refer to as  the 4 components of the Inventory Process;

Determining need(s)

    • Establishing what needs to be in your inventory ahead of time helps streamline the counting process.
    • Establish Product specifications and Order guides to insure consistent ordering.
    • Have Vendor agreements to insure pricing, quality and consistent supply.
    • Have Production systems in place that can establish pars on items needed to inventory.  Keeping inventory as low as possible to meet demand.

Organize

    • Organizing storeroom logically and insure items are located together.
    • Establish product pars to insure adequate space is available.
    • Create Physical count sheets to mirror storage to accelerate counting process.  (see “Shelf to Sheet” below)
    • Have someone clean and organize store room prior to counting.
    • Create different count sheets for different store rooms and consolidate like items at the end of the counting process (not during)

Daily Management

    • Label and date to help insure proper rotation (everything has a shelf life)
    • Limit access and secure storeroom when not in use. (Key control)
    • Minimize storeroom personnel to ensure consistent receiving and control
    • Limit who receives orders and handles invoices
    • Perform account receivable tasks as invoices are received

Monthly Management

Pre- Physical counting

    • Ensure the most current price is on the Inventory extension sheet (Master Spreadsheet) for each item (changes by industry) and that it is done prior to Physical counting day.  Account receivables need to be up to date at time of Inventory counts.  Doing price changes at the same time is proven to not be efficient.

Post Physical counting

    • Review and tally all Physical count sheets.  If products may be found in multiple spots, consolidate to one number to enter on the Master spreadsheet.  Doing this ahead of time will expedite the data entry AND begins the analytical process.
    • Enter counts in Master spreadsheet to allow for calculations (referred to as “Extensions”)
    • Review extensions and look for obvious errors.  – Key miss-types or entered as “each” but priced by “case” would be one of the more obvious
    • Analysis of inventory by category totals and comparison to prior inventory.  Look for any major differences, variations, or trends.

Depending on the industry, I generally advise establishing an acceptable variance by Inventory category becomes established.   If over the “acceptable” variance (5%?) then have the manager report as to why.

Other key points that will help your Inventory process
  • Make sure how it is being counted is consistent with how it is purchased, used or stored.  If it comes in a case of 100 ea., yet they are only used 1 at a time, then break the sheet down to an “each” price and inventory them by the “each”.
  • If it is purchased by the pound, then make sure there is a scale available when inventorying occurs.  Do NOT assume each one is a given weight.  There is a reason why the maker doesn’t price the product this way.
  • The Physical Count process needs to be completed at a designated time when no product will be entering or exiting the storeroom(s).  Often done after hours or before business start for the day.  If you have multiple units doing individual inventories, it is important to insure they all do it at the same time, otherwise performance comparisons are difficult.
  • Utilize  “Shelf to Sheet ” – a 2 party system during physical inventory.  Inventory is not about filling in what is on the count sheet; it is about capturing the money on the shelf.

                 Process -One person starts in the upper corner of a storeroom and calls to                                             the second person.  The person calls what item it is and how many there                                                are.  The second person finds the item on the count sheet and writes down                                             the amount.  If they don’t find the item on the sheet, they write it down                                                   separately to be added at the end of the process.  The first person then goes                                       to the item adjacent to what they just counted and calls that item off etc.                                             This is done throughout the storeroom and is a methodical way to ensure                                               everything is accounted for.

  • Make sure Physical counts are never taken while someone is sitting at their desk.  Mistakes happen and this is why they call it “Physical” inventory.
  • Lastly for proper control a non Ordering/Receiving person should be involved in performing the physical counts also.  This is a common Risk Management practice plus; people that touch these products everyday are more likely to make assumptions/mistakes during a lengthy Inventory process.

 

Carpe diem!

 

Hello World!

Ask an Expert, Conversations with a Consultant, Marketing, Operations, People, Products, Quotes, Observations & Ironies, Uncategorized,

Today I am introducing a new blog series from C.S.Simons Consulting.  This blog will feature several different types of content on the issues that business people struggle with every day.  Advice will be given on a variety of subjects that directly effect your revenue and we are always looking for questions or topics for discussion, so please don’t be shy.

Here’s a quick overview of the categories we offer;

“Ask an Expert” Series

A collection of questions asked of me or my collaborators about many different business or management topics.  Presented simply with brief answers but we are always available to elaborate on them if you’d like.  These may be answered by someone in our firm or other experts we collaborate with.

“Conversations with a Consultant”

The format in this series is designed to be easy flowing with out too many buzz words and corporate talk.  Just simple conversations, focused on information designed to assist you with your work and help you make more money.   The majority of these topics will fall into 1 of 4 areas; People, Products, Operations, and Marketing.  These 4 key areas’ are found in every business and are the most important indicators of your businesses ability to generate revenue.  C.S.Simons Consulting exists to help others make more money, and these are the same areas focused on in our proprietary “M.O.R.E. Assessment Tool©.

“Quotes, Observations & Ironies”

Favorites and classic quotes, probably some opinions on business related current events and those that know me should expect periodic sarcasm.

 

Please let me know any questions that you have about these topics or how to implement the changes mentioned into your business.  I am here to help.

 

Carpe diem!

Conversations with a Consultant – Products

Conversations with a Consultant, Products, ,

This area of the blog will be dedicated to the broad category simply called “Products”.

In this category I will outline different aspects needed to design new, or strengthen existing, products with in your company.  How to look for opportunities in the market place and the science behind how to be sure the product you design will sell prior to its launch.

I will continually challenge readers to look at there business differently.  The people, the physical location, your customers, and the energy/hype these all produce are all “products” of your business that people WILL judge you by.  It all adds up and the business that creates a better EXPERIENCE with their “products” will have the ability to generate more revenue.  Which is of course what this is all about.

I will also be speaking about different strategies to use with the products you offer.  Some choose to create a bigger, better or sexier versions of an existing product line.  So what do you need to know about the competition and what you need to do to stake your percentage of the market?

Others want to be pioneers and create something new in the marketplace.  Sounds great, but what do you need to do to be both noticed and profitable.  Being a pioneer is the expensive route to go, so how much will you need for capital reserve?  How do you project that?  We’ll talk about that too.

Most companies spend time and resources in creating and maintaining a products reputation.  There are many different tactics to use depending on what type of product you present.  How do I plan and measure this? Are your people your product? do they create your brands reputation? Or do you manufacture a product reviewed by consumers?  Very different tactics and each will be explained in this category of our blog.

Experience shows that few businesses look at all the aspects needed to create a strong and lasting product in today’s market place. A chain is only as strong as its weakest link.    Marketing Consultants may touch on these aspects but seldom take this holistic of an approach, one that considers the other areas of your business needed to support your marketing tactics (People & Operations).  While these experts usually have very good advice on what Advertising mediums or campaign tactics and strategy will serve you best, there is more to generating revenue than just getting the people through the door.  It’s about execution.  The goal of these conversations are to help you create the strongest, most sustainable product possible.

 

Carpe diem!

Conversations with a Consultant – Operations

Conversations with a Consultant, Operations, ,

This area of the blog will be dedicated to the broad category simply called “Operations”.  Much of the focus will be dedicated to the common components that people skip for one reason or another.  I will show you the details to consider and tie those to the dollars and cents of your business.  Most people understand the discussion regarding “operations” in the business and how it has a direct reflection on your profit, so I don’t need to sell anyone on the importance of this category.  This is most commonly focused on in the Manufacturing or Retail sectors, can focusing on it improve the Financial or Healthcare Industry?  I will discuss these and other industries to show you what you may be missing!  I have clients from these sectors that will absolutely agree this is linked to your businesses ability to generate revenue.

The bulk of this blog will be multiple conversations over time around general management topics like Financial reporting, Auditing, Crucial Policies (every business needs), Time Management (my most popular seminar!), the many sides of Human Resources, and Labor management to name a few.  As with all of the blogs on C.S.Simons Consulting, special efforts will be made to break these down into actions that fit the scale and scope of your business.  Continued focus and discussion of these common subjects in a conversational format will make it much easier for operators to “fine tune” their own programs.  So questions are encouraged!

But I promise to still challenge you in ways that you may not have thought about!

Operations comes down to a few key area’s; Planning, Execution, Measurement, and Correction.  This blog will challenge industries that don’t think one of these pertains to them, and show them the importance.  I will also provide broader concepts to consider and different approaches to accomplish these.  Learn from my 25 years of Leadership in Operations Management, because I want to help.

This category will help keep you focused on the two things that matter most;

1) how to increase your businesses ability to generate revenue

2) how to be more profitable.

 

Carpe diem!

Conversations with a Consultant – Marketing

Conversations with a Consultant, Marketing, ,

This area of the blog will be dedicated to the broad category simply called “Marketing”.

In them we will continually refer to internal and external marketing tactics and discuss best practices of both.  I will be addressing how to make sure both types of marketing are part of your business.  Help you determine how much of each you may need for your situation and show you how each are directly linked to your ability to generate revenue.

Internal marketing tactics are methods you may use to get your employees to behave a certain way.  So many agree that the employee is the greatest resource to a business, and few if any show you how to market your strategies and directions to your staff.  Sometimes the best marketing takes place when you are least aware of it.  I have been recognized and rewarded throughout my career for the accomplishments of my team.  This conversation will discuss how internal marketing increased my businesses ability to generate revenue. 

There are countless resources on the internet for external marketing.  There are “How to” templates, Social media companies, Networking groups, and everybody has a better way.  Few of them will even discuss Return On Investment with you.  If it is not measurable, how can you determine success?   This blog and my business are founded on assessing ways to generate revenue, so in this blogs I will always show you how the subject affects your profitability.

We will be speaking more about basic Marketing 101 than cutesy tactics that may or may not work.  Topics like Demographics, how to assess a Marketing Campaign, Budgeting for Marketing, Public Relations, and Sales & Public Speaking 101’s, will be directed to smaller business owners.  Topics like Exploring Channels, Segregation, Big Data, and Sales Force Management will be directed towards larger business.  Each of these topics differs greatly depending on the size of your business, the industry you are in, and your personal comfort zone.  All of these topics can be applied to all sizes of business and should all be part or the Marketing conversation.

The motif of this category is on the importance of Marketing to your business.  It is a key component to generating revenue and most troubled companies I have worked with think of marketing last or as “extra money”.  If I have enough, then I will spend it.  This seldom works well and where it does work, it will only provide limited results.   These conversations will help you question your own marketing and give you multiple ways to look for improvements.

C.S.Simons Consulting is not a Marketing Consulting company.  It is a Management and Business Strategy firm, we help you get the most from your business, but I do collaborate with multiple Marketing experts that I can recommend to help design what your business may need.  My job is to discover how well your marketing is working to generate revenue for your business.

 

Carpe diem!

Conversations with a Consultant – People

Conversations with a Consultant, People, ,

This area of the blog will be dedicated to the broad category simply called “People”.

This category will focus on a few keys aspect of People Management; Selection, Training/ Development, Evaluating, and Motivation.  This subject applies to a micro business of 1 person or company of 10,000, and we will have something for all of you!  I will give details of how to gauge this area and how each of the above is linked to your businesses ability to generate revenue.  We will show micro-businesses how to measure their own potential and larger businesses how to get more out of their labor.  We can discuss tools like Labor Optimization grids or how to plan and manage a Succession Plan for your business.  There is an endless list of topics that our clients are continually asking about.

We may present managers with challenges, that when implemented, will improve employee “ownership” and greatly reduce turnover.  We may show many managers that they are the obstacle and then present how to fix it.  It’s not that hard once you know what to look for, and C.S.Simons Consulting is here to help you.  You will also hear from certified Coaches, Corporate Trainers and other Human Resource experts on best practices in Labor Management.

Many that say “People” are the greatest asset a business can have.  They can have an exponential effect on your revenue.  There are some great companies over time that have developed effective programs and methods for developing people to a greater potential.  Our consulting firm is designed to help your business make more profit and “people” have always proven to be the single greatest catalyst for that.  Let us show you what we have learned from those companies, lets have a conversation about how to get more from the investment you make in your people.

 

Carpe diem!