Business Leaders Workshop - FocusCFO

Business Leaders Workshop

Mike Derringer614-378-8600

[email protected]

Tom Thon614-419-4068

[email protected]

Business Leaders WorkshopGROW YOUR SALES!

Presented by Sandler TrainingTom Thon [email protected]

We Understand the Learning Process

1Awareness

2Knowledge

3Skill

4Mastery

What are you struggling with in your sales process?

The Password is…SALESPERSON

Most roadblocks, stalls, and objectionsyou face have evolved from

interactions with the buyerand are not necessarily tied to a particular

facet of your product or service.

©2020 Sandler Systems, Inc. All rights reserved. S Sandler Training (with design) and Sandler are registered service marks of Sandler Systems, Inc

Challenge:Put these typical SELLER steps in order.

HandleObjections

NeedsAnalysis

Follow-Up

Close(or attempt to)

Present /Proposal


Typical Seller Order:

NeedsAnalysis

Present /Proposal

Close(or attempt to)

HandleObjections

Follow-Up


Challenge:Put these typical BUYER steps in order.

AvoidCommitment

ExpressInterest

ObtainInformation(from salesperson) Disappear

ActMotivated


Typical Buyer Order

AvoidCommitment

ExpressInterest

ObtainInformation

DisappearActMotivated


The Buyer/Seller DanceAvoid

CommitmentExpressInterest

ObtainInformation Disappear

ActMotivated

HandleObjections

NeedsAnalysis

Follow-UpClose(or attempt to)

Present /Proposal

EDUCATEDBUYER

FRUSTRATEDSALESPERSON


Who is Leading theBuyer/Seller Dance?


What Happens When theBuyer is in Control?


In the last 12 months, approximately how much has your sales

challenge cost you?

On a scale of 0 to 10, how committed are you to eliminating your sales challenges?

Sandler Philosophies


The role of the salesperson is to createan atmosphere and environment which

allows the customer to buy whilethe salesperson stays out of the way.



Sandler Rule:Hard selling is good for one thing… hard pushback.


SandlerSellingSystem ®


Building theRelationship


Qualifying theOpportunity


Closing the Sale

SandlerSuccessTriangle


SUCCESS

Break the Rules;Close More Sales!

What is one Attitude, Behavior, or Technique you learned today?

……To Finance

Pivot - From Sales……

Setting… and more

importantly reaching

…Financial Goals!

Grow the Value!

What is at the Summit of Your Mountain?

Business Value - Transaction Execution§Succession planning§Transition to Next Generation§ESOP, Leveraged Recap or

Management Buy Out§Continue to run with Management

Team§Shut it down§Estate Planning

Value

Growth

Health

Foundation

Time

Focu

sed

Effo

rt

Health

Cash Flow

Value Creation

Growth

How Do You Begin to Climb the Mountain?

Start at the bottom and take one stage at a time

Foundation

Health

Growth

Value

Business Owner’s Journey Value Enhancement Pyramid

Foundation

Foundation Level- Close books monthly- Tax Planning- Payroll- Accounting reports- Compliance Issues- Communicating with bank- Professional relationships

established with CPA, Attorney, Banker

Have Great Advisors & Over Communicate With Them

• Advisory Board• Attorney• Banker• Business Coach

• CPA• Financial Planner• CFO/Fractional CFO• Sales Coach

Get your team and be proactiveand not reactive with them

In Control or Out of Control?

ProactiveReactive

Health

Health Level

- Positive Cash Flow from operations- C.O.A.R management systems- Forecasting & Budgeting- Knowing where cash hides- What are healthy sales?- KPI’s that are timely!- Looking forward, not backwards- CFO

Look Forward not Backwards

COAR - Four Systems Every Business Owner Needs

Issue• Am I going to run out of cash?

• What is happening today/tomorrow?

• What happened last month?

• What is happening 3 months from now?

System• Cash Flow

• Operating

• Accounting

• Revenue

Survey of Business OwnersImportance in running day to

day (ranking)

1. Cash flow system

2. Operating system

3. Accounting system

4. Revenue system

% that have and actually use them

8%

35%

100%

14%

Cash vs Cash FlowThere are only three places for a business

to get cash…

Investor Bank Business

… every business has the ability to optimize its own cash flow

Cash Flow is …

The cash generated or used by a business

Not Net Income -Consider the balance sheet

13 Week Rolling Cash ForecastYour Company NameSummary Cash Flow ProjectionRolling 13 weeksJuly 15, 2020

Week Ending

Week ending =======> July 17 July 24 July 31 Aug 7 Aug 14 Aug 21 Aug 28 Sept 4 Sept 11 Sept 18 Sept 25 Oct 2 Oct 9

Beginning Cash Balance $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

CollectionsCash Collections - - - - - - - - - - - - -LOC draws - - - - - - - - - - - - -

Total Collections - - - - - - - - - - - - -

DisbursementsCurrent payables - - - - - - - - - - - - -Future expenses - - - - - - - - - - - - -Payroll - - - - - - - - - - - - -Interest payments - - - - - - - - - - - - -LOC repayments - - - - - - - - - - - - -

Total Disbursements - - - - - - - - - - - - -

Net Change in Cash Position - - - - - - - - - - - - -

Ending Cash Position - - - - - - - - - - - - -

Available LOC - - - - - - - - - - - - -

Liquidity $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

ABC Company13 week cash forecastBase case (with moderate slow down) scenario

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Weeks

17-Jul 24-Jul 31-Jul 7-Aug 14-Aug 21-Aug28-

Aug 4-Sep 11-Sep 18-Sep 25-Sep 2-Oct 9-Oct 16-Oct

Beginning of week cash position (360) (360) (385) (310) (335) (260) (285) (210) (235) (160) (185) (110) (135) 65

Payroll (100) (100) (100) (100) (100) (100) (100)

Payables (after reductions put in place) (150) (50) (50) (50) (50) (50) (50) (50) (50) (50) (50) (50) (50) (50)

Collections 150 125 125 125 125 125 125 125 125 125 125 125 250 250 Assumes slow collections for 12 weeks, then normal

End of week Cash position (360) (385) (310) (335) (260) (285) (210) (235) (160) (185) (110) (135) 65 165

13 Week Rolling Cash Forecast

Not All Sales Are HealthyExamples of unhealthy sales:

• Too much revenue from one customer• Not enough revenue from one customer• Gross margin is too low to cover your overhead costs• Sales commission exceeds gross margin• Client pays too slow (AR days)• Orders cause too many disruptions• Inventory levels not correlated with sales (Inv turnover)

How to know if you have healthy sales ?• First, get the data• Sales by customer• Sales by salesperson• Margin by customer• Accounts Receivable

• Second, look for trends/problems• You might be surprised at what you will find

Healthy SalesImprove

Gross MarginIncrease

Sales / Day Change

Financial Summary

Sales $5,280,000 $6,336,000

Operating Profit 306,800 626,240

Operating Profit (%) 5.8% 9.9%

Bank Debt Balance $1,296,986 $793,258

Annual Cash Flow from Operations $182,199 $1,198,760

Health Indicators

Inventory Turns (#) 4.0 6.0

Inventory Balance $852,000 $572,000

Accounts Receivable Days (#) 60 45

Accounts Receivable Balance $825,000 $660,000

Gross Margin (%) 32.5% 34.0% +1.5%

Sales per day ($) 22 days/mo $20,000 $24,000 +20%

10 Keys to a Healthy Business

1. There Area Only Three Places to Get Money

2. Know Where Cash Hides

3. Understand How Debt Works

4. Understand Financial Reporting vs Management Info

5. Four COAR Systems

6. Not all sales are Healthy

7. Choose Your Financial Strategy

8. Cash Flow From Operations

9. Have Great Advisors and Over Communicate with Them

10. Look Forward not Backwards

Growth

Growth Level

- Scaling the business- Right Systems and monitors/KPI’s - Unkink the hose, what are the constraints?- Sales Management- Operational efficiencies- Business or Sales Coach, or - Advisory board

Revenue Funnel

New Opportunity

Initial Communication

Fact Finding

Develop Solution

Propose Solution

Solution Evaluation

Negotiation

Purchase Order

Value Level

- Systems in place to run the business- Knowledge transfer has occurred- Succession plan in place- You are not needed- Investment Banker, Exit Planner

Value

Value Creation

Internal Cash Flow

Business Value

BusinessRisk

VALUE REALIZATION TEAM

4

ADVISORS, COACHES, SPECIALISTSü Strategic planningü Growth strategiesü Leadership development

3

CFOü Forward looking and proactiveü Internal financial sophisticationü Business analysis and planning

2

ATTORNEY, BANKER, CPA, TRUSTED ADVISORü Key Business Informationü Tax planning and external reportingü Legal, Banking, Payroll, Insurance

1

ü Succession planningü Business transitionü Transaction execution

Business Owner’s Journey Value Enhancement Pyramid

Foundation

Health

Growth

Value

Climb the Mountain

Business Leaders Workshop

Mike Derringer614-378-8600

[email protected]

Tom Thon614-419-4068

[email protected]

Documents

Business Leaders Workshop - FocusCFO