Archive for Business Strategy Tools

Zen and the Refreshing Art of Business Spring Cleaning

iStock_000021234364_DoubleThis week I relocated to a new home. I’d lived in the original house for just seven years but I was amazed by the amount of “stuff” that had built up over that time. At the end of the move, not only had I reduced my clutter,  but even more I felt deeply refreshed in my thoughts, attitudes and my whole approach to life.

 

It got me reflecting how often a clean out in the workplace can be equally re-invigorating on so many levels – physical, strategic, monetary, emotional.

Most of us accumulate quantities of ‘stuff’ that we rarely clean it out. Even if we make a conscious effort at the beginning to plan our processes and what we store or archive, somehow they still become cluttered over time.

The clutter can relate to physical items or systems and processes, or even outworn ideas.

Here are some of the changes we’ve made over recent years to ‘declutter’ and refresh our approaches and processes.

  • Six years ago we moved offices and went paperless (well as much as you can be) – and saved ourselves $36,000 per annum ongoing!

    Without the need to store paper files we could reduce our space requirement by 80sqm. At a cost of $450 per sqm, that represented an ongoing saving of $36,000 per annum. Yes it was a tough process at the time. On the upside though, we’ve reaped the benefits of massive savings and we no longer have the nightmare of reams and piles of paper requiring housing somewhere.

  • We re-located our network servers offsite – and saved more space, capital outlay and technical maintenance.

    For years our emails have run out of Microsoft or Google hosted solutions without an issue. It was time to consider replacing the servers we still had onsite.After the exercise of looking at the costs and potential savings, we started the process. As we were already operating remotely from different sites we had invested heavily in access to high-level internet sped and productivity, so we were confident this would not be a problem. Even so, you have to accept and take in your stride that in any transition there will always be a few potential glitches.The end result has been a service that is smooth and operates just as effectively as when the servers were housed in our own offices. We have no large capital outlay and the ongoing costs are less than if we had stayed “in house”. Once again we reaped benefits in terms of physical space and cost savings – and the headache of monitoring and maintaining technical equipment.

  • We reviewed internal systems and saved our clients and our team time and effort by creating a smoother, faster process.

    We examined one of our internal paperwork processes, which was designed around mailing people a physical form. If you wanted a company for instance, we would post you a form to complete, or partially complete, dependent on needs. By switching across to electronic forms our clients can review and respond much more quickly.

  • We recently implemented a secure portal system – and made significant savings in time for everyone while ensuring security of information.

    Emails that contain sensitive information such as tax file numbers dates of birth and bank account details are vulnerable to cyber attack. We do not normally supply this information by email. This has always meant a lot of paperwork and more time for our clients waiting on documents and posting them back. Now if our clients choose they are able to sign the document electronically at a click of a button with complete security. They can review details on screen and if they agree sign documents. If they have changes or questions, they don’t have to print out documents to post. They can ring or respond online safely. It’s been a significant saving in time – even more since the Australia Post service has reduced in frequency.

How to spring clean your business and business systems

A spring clean leaves you feeling fresh and ready to strive towards the goals you have set. The difference will become obvious on many levels too, personal, team and business.

  • Throw out old information (securely of course);
  • Review business systems.  Examine both who performs a task and how they are carried out. Update if appropriate;
  • Look for simple easy tweaks within everyday processes that may save time, effort or give your clients or customers a better result;
  • If you have a particularly big task ahead of you, consider calling in a qualified outsider who can help you assess useful changes. Being in a position to see the inside of so many businesses, this is one area where we can offer many useful suggestions and improvements.

Be aware that you may hit roadblocks. These could be physical or equally importantly emotional as you and your team members struggle to deal with change. And that too is part of our key contribution in helping you transition or change.

 

 

What made you decide to create a business forecasting tool like CashMAX?

The Words Cash Flow on Crossword PuzzleMany people ask me how I came up with the idea of business forecasting tool for SMEs.  I saw a need for a tool designed to walk you through the process of gathering the right information to track and manipulate the drivers and KPIs that help a small business grow. The result was CashMAX, a tool that helps you plan, set strategies and manage budgets.

As an accountant and business advisor – and a business owner myself – I observed that not enough SME entrepreneurs really understand their businesses. They are not properly on top of their cashflow, the issues around GST, Tax, Debtors and Creditors and a whole heap of other things that allow a small business to become a big business – or even grow to BE a business rather than just a job for the owner.

One of the most important, but least understood aspects of business is making money, what needs to be done to generate cash, and how to manipulate the crucial relationship between the timing of profit and cash.

Of course you have the option of using spreadsheets and all the alternatives out there for what we do; but they are prone to human error. They require a lot of manual input, calculation of formulas and so on. In fact you either need to be an accountant or pay one to extract the right information for your business.

We started off building CashMAX Forecaster as a tool to assist us working with our clients. From there it took on a life of its own. Over time we built into the tool every circumstance we experienced over hundreds of businesses, developing more ways to look at different parts of their business.

Once we involved our clients we realised we needed to make people accountable – so we made it internet based. This allowed our clients and their managers to be actively involved in establishing their budgets. They could set budgets based on what would then become their KPIs. The result was that we could now hold them accountable for these KPIs. They were no longer some number established by accountants somewhere away from the real business and the people working in it. They were the numbers, the KPIs that they had set based on their own input.

For our clients it has taken their understanding of their businesses to a whole new level. They have a far more comprehensive view of their business and its drivers. They have better information for basing their business decisions on as well. And their management team feel more involved and have more clarity about their roles and responsibilities in the business.

It’s been a lot of work, and a lot of refining and developing based on years of experience and practical testing with hundreds of clients. We’re pretty excited with where it is right now, and it will keep on growing. It’s a powerful business forecasting and management tool for SMEs created out of a real synergy of knowledge, needs and skills between accountants and business owners.

The Geometry of running a business

Round, like a circle in a spiral

Like a wheel within a wheel

Never ending or beginning

On an ever spinning reel

Driving down the coast road this week I heard a song from the soundtrack from the Thomas Crown Affair 1999, Windmills of Your Mind.  The lyrics made me think about circles and squares and the issues we face as business owners and employers.  Yes, a little bit cryptic I agree, but it was a long drive at the finish of an interesting but demanding work assignment, so bear with me while I explain.

Business decisions are only made when we reach a choice and determine a path of action.  In making business decisions there are many many variables.  These variables include issues such as:

  • What is the decision going to do to my cash?
  • How is the decision going to affect my profit?
  • Is this the right time to make the decision?
  • Is this going to be the right decision both for me as well as for my business?
  • What is the likely impact of the current economic uncertainty on the business environment I operate in?
  • How much will this decision cost me now as compared with my expected future returns?
  • Is the decision going to help me progress towards my goal – today and/or in the future?
  • What if the decision fails to deliver the planned outcomes?
  • What if my partner or employees don’t agree with the decision?

And the list goes on and on. And on!

The risk so often is that we end up in a loop – a circle of endless discussions that lead to indecisiveness and results in no decision being made at all. A wily business entrepreneur I know declares that even a bad decision is better than no decision at all.  There is a modicum of truth in that to be sure. But these days there are some useful strategy and decision making tools available that can help you get out of that ground hog day cycle and move forward.

A good business strategy and decision making tool should help you:

Run optional scenarios to test and determine if the proposed action is going to provide the outcome you want.
You should be using your strategy tools to develop options, extrapolate the potential outcomes and discuss the options until you are comfortable with the decision. Then you can take action and implement.

Allow you to focus on the impact of the decision.
What is the $ effect?  How and when is it going to make a difference?  If it becomes clear that it is not for another two years and doesn’t require further immediate thought, you can put it aside and concentrate on those parts of your plan and strategies that are important to making a difference today.

Provide a structured and directed way to review and discuss your plans and decisions.
As a business advisor an activity that takes up much of my time is simply talking through decisions with my clients, most often because they are too close to the situation to evaluate it.

These days the tool I most often use is CashMAX Forecaster™.  It allows my clients to work through their decisions with minimal outside help.  Just quietly my clients love the added benefit of being able to produce a report that is professional enough to present to banks and JV partners-a huge cost saving.

Which brings me to another geometric shape – the square.  Often while you are running around in ever decreasing circles you also end up trapped thinking inside the square.  You stifle the lateral thinking that allows you to generate other possible scenarios until such time as you happen to talk to someone else about it, and they ask you questions that push you to reconsider or get to the root of the matter.

This can apply not just to you as a business entrepreneur and owner but also to day-to-day matters that your employees face.  I don’t know how often I have seen time evaporate because people are stuck on an issue or problem that could be answered if they simply asked for a second person to look at it.  Even more remarkably, the answer will often come from them – they just need someone to drag them back from focusing on the details and the process, rather than the outcome they are trying to achieve.

If you find yourself in an issue which has you going in circles, and desperate to think outside the square, pick up the phone and talk to someone.

If you need a tool that will help you understand the impact of a decision on your business, cashflows, profit and future, then call me and ask to get access to CashMAX.

You can walk around in circles forever, or escape through the revolving door to map your own future now.