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The 6 key areas to consider
“If your goal is anything but profitability – if it’s to be big, or to
grow fast or to become a
technology leader, you’ll hit
problems ”
Michael Porter
The Institute for Strategy and Competitiveness,
Harvard Business School.
Your Hosts today
Steven HellerDFK Laurence Varnay
Sydney
Gavin JohnsDFK Hirn Newey
Brisbane
Local knowledge. National Connections. Global Reach.
15 firms in Australia and New Zealand214 firms in 92 countries worldwide
• Business structure & set up• Business valuations• Due diligence• Accounting, tax, compliance assistance • Strategic Planning Workshops
It’s our goal today to:
Educate and empower you with the
knowledge of how to improve your
business profitability.
You'll leave this webinar with new
ideas and strategies to implement.
We are covering:
1) Master the numbers
2) Leverage your greatest asset
3) Make your working capital work for you
4) Embrace change and technology
5) Know your customers
6) Identify and avoid profitability drains
Quick Background Polls First…
1. Master the Numbers
Master the numbers
The best indicator of future performance, is past
results!
Be careful of data that is more than 3 years old.
What are the best sources of information?
Internal?
External?
Master the numbers
What are the best sources of information - Internal
Existing KPIs
Management Accounts of your business
Budget
Summary of key product lines or sources of revenue
Summary of performance of key suppliers
Master the numbers
What are the best sources of information - External
Industry Benchmarks
Example: ATO Small Business Benchmarks
Example: Australian Bureau of Statistics
Example: Small Business Development Centres
Understanding of the current economic climate
Master the numbers
A new action plan!
Choose 3 key change drivers that you believe will
immediately improve the profitability of your business
whilst not harming your long term business strategies
Develop a plan to monitor your changes.
Bonus Handout – Financial Spotlight
By attending the webinar today, you can download our “Financial Spotlight” spreadsheet
It is a tool for you to undertake a detailed financial analysis of your quarterly results for 2016 and 2017 (with annual comparatives for 2014 – 2017)
Instructions are contained within the spreadsheet
We encourage you to use this financial spotlight as a basis for discussion with your advisor – to better assist with formulating your action plan to improve profitability
2. Leverage your greatest asset
Leverage your greatest asset
Your team are at the coalface of the business
They know what works and what doesn’t
They deal with customers and suppliers
They can drive profitability
By properly leveraging your team, you can achieve
more without the need to spend more to do it!
Leverage your greatest asset
Communicate with your team.
Upskill your team’s sales abilities.
Undertake debriefs on specific tasks or transactions.
Develop systems & checklists for them so that they can
work more efficiently and take less time to train.
Empower your team; given them responsibility, authority
and accountability to make things happen.
Leverage your greatest asset
Other strategies to maximise productivity through leveraging
your teams:
Consistent and ongoing feedback
Recognise successes (they don’t need to be major)
Share the “big picture”
Start to build trust
Provide career growth opportunities
3. Make your working capital…
work for you!
Make your working capital…
work for you!
Freeing up working capital will result in increased
profitability, for example:
- Gives you the ability to pay down debt to reduce finance
charges and increase net operating profit.
- Results in improved credit rating and increased capacity to
borrow to fund future growth.
- Gives you the ability to re-invest in your business through
additional capital expenditure.
- Affords you the ability to pass on savings to customers to
improve competitiveness and increase market share.
Make your working capital…
work for you!
Debtor Management improvement tips if applicable
Take the time to credit check new customers – saves
you a lot of grief later
Use technology to invoice faster & get paid faster
Make your working capital…
work for you!
Creditor Management improvement tips:
Don’t settle your creditors too quickly – pay things when they are due and not before.
Negotiate extended payment terms from suppliers.
Negotiate discounts for early payments.
Negotiate bulk discounts & volume rebates
Bonus Handout – Working Capital Checklist
By attending the webinar today, you can download our
“Working Capital Checklist”
It includes our Top Tips for improving your
management of debtors, creditors, stock and finance.
We encourage you to review the tips to find strategies
that could you help you improve working capital
management in your business.
4. Embrace change & technology
Embrace change & technology
Review your current systems… can these be
improved? Be open to change!
Consider what new technology is out there to help you
do what you do… only faster!
Your goals with embracing change and technology
should be:
To make your workforce more productive
To make your business and team more compliant; and
Ultimately to make the business more profitable.
Embrace change & technology
Embrace the Cloud… consider new cloud based
technologies in the following areas:
Customer billing and payment systems
Customer Relationship Management Systems
Automated payroll systems
Human Resources Systems
Document Management Systems
5. Know your customers
Generally, it costs more to find new customers than it
costs to retain and improve your profitability through
existing customers.
Immediate steps to improve profitability from existing
customers, include:
Is the amount you charge commensurate to the value added
Meet with your key customers - understand their needs
Remind customers of everything you offer
Act on opportunities to upsell to existing customers
Ask your key customers for favourable referrals
Know your customers
Further steps to improve profitability from existing
customers, over the medium term include:
Determine who your most profitable customers are and what
makes these customers the most profitable
Seek feedback from your existing customers and improve
future transactions
Instil a culture of exceeding your customers expectations
Targeted marketing efforts (to attract your preferred
customers)
Know your customers
6. Identify and avoid
Profitability Drains
Inappropriate processing – are you using the right person,
for the job?
Unnecessary motion – OH&S issues
Defects – do the job right the first time
The most common drains to fix…
Do what you do… only more consistently!
Document procedures
Use operation manuals
Consider structured job briefs and debriefs (apply what you
learn – both when things go right and wrong)
Why does this matter in terms of a discussion on
profitability?
Improves team efficiency
Improves customer experience (consistency)
Reduces business risk by reducing errors and accidents
Don’t reinvent the wheel
What to do Next?
Master your numbers – analyse the results
Develop an action plan to start improving profitability
What needs to change;
Staff? Better working capital management?
Procedures or technology?
Who is responsible; &
How will your success be measured?
Make sure you set aside time to work ON your
business… not just IN it!
Go for it and don’t be afraid to ask for help!!
How else can DFK ANZ help?
Strategic Planning Workshops
Business structure & set up
Business valuations
Due diligence
Accounting, tax, compliance assistance
External, non-executive director services
Regular coaching meetings
www.dfkanz.com
Maximise your Profitability
Thank you for attending our Webinar
Questions are welcome!
*This material is not advice. You should not act solely on the basis of material contained herein. Due to the speed of developments in tax law and the summarised, general nature of this material, we recommend our formal advice be sought before
acting in any of the areas covered in this material.
Question time…
