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What coloured day are you having? (PART 2)

By on May 29, 2009 in Mindset

Today we’re talking about the SKY BLUE day. Have you heard of the term ‘the sky is the limit’ Well that’s how you’re meant to feel on a sky blue day.

This is the day when you’re working on bringing income into your business. It should be one of the most exciting things that you do. Lead generation, lead conversion and then sales fulfilment.

This should also be a really positive day and the most common way I see of this turning into a black day is when you have to deal with the customer from hell. Now be honest, we all have them and when they dominate our day it will turn black fairly quickly. A SKY BLUE day is about going forward not backward. Working out how to interact with our GOOD customers.

They are the ones who love what we do, are positive about our business and always value us by honouring their commitments with us. A SKY BLUE day is not about reacting to customers and feeling pushed around.

Get on the front foot. Think about your uniqueness. Think about why you are so much better than your competition. Be courageous. It will make you feel a lot better and that’s how you’re supposed to feel on a SKY BLUE day

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What coloured day are you having? (PART 1)

By on May 22, 2009 in Mindset

Colour is such an important part of the way we bring vibrancy to our lives. I remember back to black and white television (which shows you how old I am) and the day when I first saw colour. Everything seemed so much more real and vibrant.

In developing our whole system called The Financial Fence® I have learnt the value of colour and as a result found that many people learn more by the association of colour than numbers and words.

So in this little series of blog posts I’m going to look at the three colours that make up the activity on the fence and associate them to the kind of day you might be having.

So there are three different types of day you may be having as a business owner:

  1. A SKY BLUE day – this is the kind of day when you’re interacting with your customers.
  2. An ORANGE day when you’re working on administration , process and efficiency.
  3. A GREEN day when you’re working ON your business rather than IN your business.

Many times you may be having a day when all the colours are merged together and you feel in a bit of a mess. That is probably a black day for you.

If you’re having one of those days then the best thing to do is take a deep breath. Count to ten. Put two of the three colours away for the day and focus on only one of them.

You’ll find this will really help you and , you know, there’s always another day to bring out the other colours and get the value from them.

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Is my business a going concern?

By on February 24, 2009 in Current Affairs, Management

Is my business a going concern and if so what items should I be accumulating?

Are you hoping that your business stops completely at the end of this month? If the financial crisis is affecting you, the answer may well be YES. However, most of us are in business for the foreseeable future. We’re working with a “going concern” paradigm. What that means is that at the end of every month we’re likely to have unfinished tasks which are commonly known as ‘works in progress.’

So what would I have in Work In Progress? What would be accumulating in my books relating to that?

If you’re a manufacturing business the answer is simple. All the work left in your factory which is part-finished.

But what about a service company, a law firm or an accounting firm?

Again, there will be assignments and ongoing work which have been done but have not progressed far enough to bill clients. These should be accumulated in work in progress.

What about a project management business?

This is quite easy. It’s all the amounts spent on jobs which can not yet be invoiced to customers.

While all this sounds logical, when it comes to the book keeping everything gets a little haywire! Many book keeping systems work on a cash basis, so whenever a purchase is made it goes in the COST OF SALES. That is code for ‘written off’! No wonder people have difficulty working out their profit. It’s a mis-match of revenue and cost items which bear no resemblance to each other. What a great fruit salad!!

Every business has work in progress of some sort. If you are not accumulating any in your books then they are not a true reflection of what’s really happening in your business.

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Do you really know where your profits are coming from?

By on October 1, 2008 in Management

On Friday, I introduced you to the second of three keys for ensuring you succeed in these changing economic times, and that was, “Make sure you are empowering those people who are really running the business.”

Today I want to talk about the third key, but before I do let me take a few sentences to reflect on the gale blowing through the financial markets.

A dip? A pothole? A sinkhole?

It seems that we’re in for more than a small dip on the economic horizon. We’re in for completely different economic times!

This morning I was with a client who has been around for a while and was recalling the economic hard times right back to the 60’s. He did comment that we’ve been on an economic run now for the last 18 years. He remarked — and I agree wholeheartedly with him — that for many managers this will be a completely new experience.

Think about it for a minute.

What were you doing 18 years ago? For most of you, it would be something quite different. Your position and scale of responsibility will have been very different from today. That’s why we’ve started blogging in the way we have been. I foresaw current events back in March and the “proverbial is only now hitting the fan.” It means we at One Sherpa weren’t having a lend of you when we outlined the need to acquire new skills for managing in the new environment.

Somehow we got the title for the Summit right on the mark, which is ‘Critical skills to rise above uncertain times.’

Anyway, back to my third key…

“Make sure that you know where and how your profit is being made.”

As I was saying above, we have been on an amazing boom time for the last eighteen years and as a result many of the management practices that were necessary in hard times have become completely irrelevant and lost from the skills repertoire of managers.

In the good time it was simply a matter of increasing your sales as fast as you could, and the profits would generally follow along, even if the cash flow was tight. It was not necessary to know where you made your profit because it all just seemed to work itself out.

In the economic times ahead it will be more important to know exactly where you make your profit. There will be far less room for error and non-profitable products and services will need to be eliminated from your business to first survive and then to continue making satisfactory profits.

At One Sherpa, we determine a company’s performance by looking at the movements in their profit, broken down into three separate elements:

  • Price/Cost Inflation,
  • Cost Productivity, and
  • Volume/Mix Change.

Business owners have not been concerned about this type of breakdown (recently) because inflation has been low, volume has been high and businesses have generally run along OK.

Think about the level of cost increase running in your business… Has it increased? What about the effects of the petrol price increases? How have increased interest rates affected the households of your employees? What about the massive increase in the cost of food?

We used to be able to manage with only one major factor – volume increases — because the other factors were not significant enough to make a material difference. Not any more! In the new environment we will need to look at all three factors and understand why and how they’re affecting our day-to-day business.

I would like to ask you to consider adding your thoughts and relections in the comments area below. One of the reasons for blogging is to increase the interaction and cross-fertilisation of ideas. I really appreciate your thoughts and comments and if you are able to share them in the comments section of the blog it would increase the value of the articles and give others the benefit of any thoughts and feedback you might have.

I look forward to seeing you at the Summit on October 17th. Come ready for a day to remember and some take-away value that will assist you chart your way up your own particular mountain.

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