Thrive, Survive or Dive - Kevin

50 %
50 %
Information about Thrive, Survive or Dive - Kevin
Business & Mgmt

Published on June 24, 2009

Author: kevinnott

Source: slideshare.net

Description

Essential tools that every business owner must know and use to forge a profitable business.

Kevin Nott , M.A. Business Strategy Coach [email_address] (801) 850-1716 www.GetProfitPointed.com

Thrive, Survive or Dive Keys to Building a Profitable Business

Recommended Reading

What is a Business Worth? Net Present Value of all projected future cash flows Approximately five times your current annual net profit IF Your business can run in your absence Otherwise Your business has little value

Net Present Value of all projected future cash flows

Approximately five times your current annual net profit

IF

Your business can run in your absence

Otherwise

Your business has little value

Build a Business of Value Profitability Consistent Maximized Systems That drive the business That can be managed by others

Profitability

Consistent

Maximized

Systems

That drive the business

That can be managed by others

Would you expect someone without the proper tools and adequate training to build a house?

Is it reasonable to expect someone to build and manage a successful business without the right tools and knowledge?

Lack of business knowledge and skills is the primary reason most businesses fail and others rarely achieve their potential

Lack of business knowledge and skills is the primary reason most businesses fail and others rarely achieve their potential

Key Questions to Ask What is the current value of my business? What would I like it to be worth? How do I get from here to there?

What is the current value of my business?

What would I like it to be worth?

How do I get from here to there?

Thrive, Survive or Dive? Diving companies Losing money Sales are dropping

Diving companies

Losing money

Sales are dropping

Thrive, Survive or Dive? Surviving companies Covering costs with revenues Sales are unstable

Surviving companies

Covering costs with revenues

Sales are unstable

Thrive, Survive or Dive? Thriving companies Making strong profits Growing Sales

Thriving companies

Making strong profits

Growing Sales

What Makes the Difference? Thriving companies understand the concept of Profit Point They manage their business around the key driving principles.

Thriving companies understand the concept of Profit Point

They manage their business around the key driving principles.

What is Profit Point? The point where revenue is sufficient to cover all costs to that point and the company starts to make a profit Gross profit equals fixed costs Can be measured in sales dollars or units Can be utilized to measure performance of separate business units or revenue types

The point where revenue is sufficient to cover all costs to that point and the company starts to make a profit

Gross profit equals fixed costs

Can be measured in sales dollars or units

Can be utilized to measure performance of separate business units or revenue types

Profit Point

Key Profit Point Factors Revenue: Amount billed to customer Direct Costs: Costs directly associated with a specific sale Gross Profit: Revenue less all Direct Costs Gross Margin: Gross Profit expressed as a percent of revenue Fixed Costs (Overhead): Costs that do not directly fluctuate with sales volume

Revenue:

Amount billed to customer

Direct Costs:

Costs directly associated with a specific sale

Gross Profit:

Revenue less all Direct Costs

Gross Margin:

Gross Profit expressed as a percent of revenue

Fixed Costs (Overhead):

Costs that do not directly fluctuate with sales volume

Profit Point Question If profit does not occur until the profit point, what does it take to reach the profit point?

If profit does not occur until the profit point, what does it take to reach the profit point?

Profit Point Revenue Formula Fixed Cost $ ---------------------- Gross Margin %

Profit Point Example $10,000 (Fixed Costs) ----------------------------- 50% (Gross Margin) = $20,000

Profit Point Unit Formula Profit Point Revenue ---------------------- Price per Unit

Profit Point Example $20,000 (Profit Point $) ----------------------------- $1000 (Unit Price) = 20 Units

Test Yourself Unit Selling Price: $200 Unit Costs: $100 What is the Gross Profit per Unit? What is Gross Margin Percentage? Fixed Costs: $8,000 What is the Profit Point in Dollars? What is the Profit Point in Units?

Unit Selling Price: $200

Unit Costs: $100

What is the Gross Profit per Unit?

What is Gross Margin Percentage?

Fixed Costs: $8,000

What is the Profit Point in Dollars?

What is the Profit Point in Units?

How Did You Do?

Profit Point

Furnaces, Inc. What is the Gross Profit? What is the Gross Margin? Fixed Costs = $20,000 What is the profit point revenue in dollars? How many furnaces do you need to sell to reach the profit point?

What is the Gross Profit?

What is the Gross Margin?

Fixed Costs = $20,000

What is the profit point revenue in dollars?

How many furnaces do you need to sell to reach the profit point?

Profit Point Example $20,000 (Fixed Costs) ----------------------------------- 40% (Gross Margin) = $50,000 $50,000 (Sales) -------------------------- $2,500 (Unit Price) = 20 Furnaces

But I don't want to just break even! I want to make money!!

I want to make money!!

Profit Dollar Revenue Target Fixed Cost $ + Profit $ --------------------------- Gross Margin %

Furnaces, Inc. $20,000 + $5,000 (Profit) ----------------------------------- 40% = $62,500 $62,500 -------------------------- $2,500 = 25 Furnaces

Profit Percent Revenue Target Fixed Cost $ ---------------------------- Gross Margin % - Profit %

Furnaces, Inc. $20,000 ----------------------------------- 40% - 10% (Profit) = $66,667 $66,667 -------------------------- $2,500 = 27 Furnaces

Managing the Profit Point Increase Number of Unit Sales (Volume) More sales opportunities Increase the close rate on sales opportunities Increase the Gross Margin Percentage Increase and manage selling price Reduce and manage direct costs Reduce fixed costs

Increase Number of Unit Sales (Volume)

More sales opportunities

Increase the close rate on sales opportunities

Increase the Gross Margin Percentage

Increase and manage selling price

Reduce and manage direct costs

Reduce fixed costs

Profit Point Calculator

Comparing Competing Products Fixed Costs = $20,000 Desired Profit = $5,000

Let's Take a Closer Look

Items that must be considered Capacity Availability of leads Cost per lead Sales closing rate

Capacity

Availability of leads

Cost per lead

Sales closing rate

It's About Profit Get there quickly Maximize every opportunity Every sale after the goal is gravy

Get there quickly

Maximize every opportunity

Every sale after the goal is gravy

Take a Break!

Key Driving Principles of Profit Point Know Your Numbers Set Your Course Create Opportunities Sell for Profit Manage the Work

Know Your Numbers

Set Your Course

Create Opportunities

Sell for Profit

Manage the Work

Step 1: Know Your Numbers What you need What they are Where they come from How to use them

What you need

What they are

Where they come from

How to use them

Numbers You Need to Know Accounting Marketing Sales Production

Accounting

Marketing

Sales

Production

What you need to know about Accounting What goes where How to read financial statements Basic financial analysis

What goes where

How to read financial statements

Basic financial analysis

Marketing Numbers Market share Advertising Cost of advertising by medium Response rate by medium Lead conversion rate by medium Cost per response by medium Sales close rate by medium Cost per sale by medium Inbound call conversion rate

Market share

Advertising

Cost of advertising by medium

Response rate by medium

Lead conversion rate by medium

Cost per response by medium

Sales close rate by medium

Cost per sale by medium

Inbound call conversion rate

Sales Numbers Average ticket Sales Closing rate Financing rate Referrals

Average ticket

Sales Closing rate

Financing rate

Referrals

Production Numbers On-time completions Call backs Labor efficiency rates Material and equipment cost (usage) rates Gross profit per man-day

On-time completions

Call backs

Labor efficiency rates

Material and equipment cost (usage) rates

Gross profit per man-day

Profit Point Exercise Estimating Revenue

Step 2: Set Your Course Identify where you are now Decide where you want to go Establish a plan to get there

Identify where you are now

Decide where you want to go

Establish a plan to get there

Strategic Planning Situation analysis Customers Vendors Competitors Economy Regulatory issues Competitive products Barriers to entry Internal Analysis Market share Image Capabilities Products Culture Goals

Situation analysis

Customers

Vendors

Competitors

Economy

Regulatory issues

Competitive products

Barriers to entry

Internal Analysis

Market share

Image

Capabilities

Products

Culture

Goals

Strategic Direction Grand Focus Customer Product Capacity Basis of Competition Low price Quality Speed Service

Grand Focus

Customer

Product

Capacity

Basis of Competition

Low price

Quality

Speed

Service

Strategy Selection Matrix Price Speed Quality Service Customer / Market Product Capacity

Customers Who is? Who is not? Products What are? What are not? Define the Business

Customers

Who is?

Who is not?

Products

What are?

What are not?

Identify Strategy Drivers Processes that are performed in the business that Create distinctiveness Critical to the success of the strategy Must be a priority Must be performed very well

Processes that are performed in the business that

Create distinctiveness

Critical to the success of the strategy

Must be a priority

Must be performed very well

Strategy Fit Matrix Meets Customer Wants / Needs High Low Internal Capabilities High Winner Temptation (Solution seeking a problem) Low Challenge Foolish

Aligning around the Strategy Structure Systems Staffing Style Skills Shared Values

Structure

Systems

Staffing

Style

Skills

Shared Values

Step 3: Create Opportunities Increase the number of new customer opportunities Increase the number of opportunities from existing customers Increase perception of value

Increase the number of new customer opportunities

Increase the number of opportunities from existing customers

Increase perception of value

We Call it Marketing Creating, communicating, and delivering goods and services that satisfy customer needs Developing an identity with customers Positive Distinguishable Memorable

Creating, communicating, and delivering goods and services that satisfy customer needs

Developing an identity with customers

Positive

Distinguishable

Memorable

What You Need to Know The need you are planning to satisfy Who your customer is How your customer thinks Your product features and benefits How your product meets the needs of your customer How to reach your customer

The need you are planning to satisfy

Who your customer is

How your customer thinks

Your product features and benefits

How your product meets the needs of your customer

How to reach your customer

The Marketing Process Focus on the strategy Create the product Create a marketing plan Communicate message to customer

Focus on the strategy

Create the product

Create a marketing plan

Communicate message to customer

Create the Product Image Uniforms How you answer the phones Logo Scripts Vehicles Product Lines What you think of the customer The work you will do How you do the work Literature Policies and procedures

Image

Uniforms

How you answer the phones

Logo

Scripts

Vehicles

Product Lines

What you think of the customer

The work you will do

How you do the work

Literature

Policies and procedures

Marketing Plan Who will we market to? How do we reach our customer? When? How much will we spend? What will the message be? How frequently will market?

Who will we market to?

How do we reach our customer?

When?

How much will we spend?

What will the message be?

How frequently will market?

Tools for Communicating with Customers Advertising Public relations Internet Top-of-the-mind awareness Referrals Repeat customers Cross selling Educating

Advertising

Public relations

Internet

Top-of-the-mind awareness

Referrals

Repeat customers

Cross selling

Educating

Profit Point Exercise Establishing a Marketing Culture

Establishing a Marketing Culture

Step 4: Sell for Profit Increase the rate that opportunities are converted to sales (Close Rate) Get more profit from every sales Get more sales opportunities

Increase the rate that opportunities are converted to sales (Close Rate)

Get more profit from every sales

Get more sales opportunities

Getting a customer to buy Purchase decision is made when price is less than or equal to perceived value Value is established by the customer Move customer to buying decision by Lowering price Increasing perceived value

Purchase decision is made when price is less than or equal to perceived value

Value is established by the customer

Move customer to buying decision by

Lowering price

Increasing perceived value

What You Need to Know Why people buy Your product's benefit You and your company How your product meets a customer's needs How to logically and effectively present ideas How to encourage a customer to make a decision How to overcome objections

Why people buy

Your product's benefit

You and your company

How your product meets a customer's needs

How to logically and effectively present ideas

How to encourage a customer to make a decision

How to overcome objections

The Sales Process Establishing selling opportunity Establish explicit needs Demonstrate capability to meet need Offer to satisfy need Gain commitment

Establishing selling opportunity

Establish explicit needs

Demonstrate capability to meet need

Offer to satisfy need

Gain commitment

Formal Sales Presentation Introduction and warm up Customer assessment Company presentation Needs resolution Commitment

Introduction and warm up

Customer assessment

Company presentation

Needs resolution

Commitment

Profit Point Exercise Sales Process

Step 5: Manage the Work Maximize amount of work performed Ensure quality of work meets or exceed standards Minimize costs Labor Materials Other

Maximize amount of work performed

Ensure quality of work meets or exceed standards

Minimize costs

Labor

Materials

Other

The Key is Labor Management Systems for Attracting Retaining Motivating the right people to do the right thing at the right time for the right price again and again

Systems for

Attracting

Retaining

Motivating

the right people to do the right thing at the right time for the right price again and again

Labor Management and Profit Point Labor is a primary resource in every marketable product Quantity of labor time (Capacity) Quality of labor time (Productivity) Cost of labor

Labor is a primary resource in every marketable product

Quantity of labor time (Capacity)

Quality of labor time (Productivity)

Cost of labor

What You Need to Know about Labor Management Motivation Planning Training Hiring Retention Team building Compensation Employment laws and regulations

Motivation

Planning

Training

Hiring

Retention

Team building

Compensation

Employment laws and regulations

Employment Tools Management Systems Clearly understood job expectations Competitive compensation Safe working environment Management systems Time sheets Employee reviews Commissions and bonuses

Management Systems

Clearly understood job expectations

Competitive compensation

Safe working environment

Management systems

Time sheets

Employee reviews

Commissions and bonuses

Key Driving Principles of Profit Point Know Your Numbers Set Your Course Create Opportunities Sell for Profit Manage the Work

Know Your Numbers

Set Your Course

Create Opportunities

Sell for Profit

Manage the Work

Get to the Point! Find your profit point Make changes needed to get there quicker Track your performance daily Make daily management decisions

Find your profit point

Make changes needed to get there quicker

Track your performance daily

Make daily management decisions

Kevin Nott , M.A. Business Strategy Coach [email_address] (801) 850-1716 www.GetProfitPointed.com

Add a comment

Related presentations

Canvas Prints at Affordable Prices make you smile.Visit http://www.shopcanvasprint...

30 Días en Bici en Gijón organiza un recorrido por los comercios históricos de la ...

Con el fin de conocer mejor el rol que juega internet en el proceso de compra en E...

With three established projects across the country and seven more in the pipeline,...

Retailing is not a rocket science, neither it's walk-in-the-park. In this presenta...

What is research??

What is research??

April 2, 2014

Explanatory definitions of research in depth...

Related pages

Survive Thrive or Dive - Official Site - Home Page

... Survive Thrive or Dive will teach you how to dig deep into the ... Dr. Kevin Orieux has over thirty years of experience in the ...
Read more

Survive Thrive or Dive - Official Site - About the Author

In this biography of Dr. Kevin Orieux learn how 20 years training and expertise have been distilled to bring you Survive Thrive or Dive, the book you've ...
Read more

ACTX Publishing | Publications | Survive, Thrive or Dive

In Depth: Survive, Thrive or Dive | Dr. Kevin Orieux's second book. ACTX publishing. Who are we; ... not merely to survive our current economic turmoil, ...
Read more

Aararat Consulting

Aararat’s training will focus your ... Dr. Kevin J. A. Orieux. Survive, thrive or dive What's your ROI?
Read more

Trump’s McCain Flap: Survive, Thrive or Dive? - YouTube

Trump’s McCain Flap: Survive, Thrive or Dive? Bloomberg. Subscribe Subscribed Unsubscribe 345,034 345K. Loading... Loading... Working...
Read more

Thrive, Survive or Nosedive - 2013 News | Bangor Worldwide ...

Thrive, Survive or Nosedive News. Going to college or university can be a daunting experience, ... from fresher to final year, to thrive as a Christian.
Read more

Trump’s McCain Flap: Survive, Thrive or Dive? - Bloomberg ...

Trump’s McCain Flap: Survive, Thrive or Dive? Jul 20, 2015 5:51 PM EDT .
Read more

Exits From The Top #5 - Will Your Organization Thrive ...

Will your nonprofit organization thrive, survive or dive after CEO succession?
Read more

SURVIVE OR THRIVE? - wiaa.com

Kevin M. Bryant, PhD., CMAA Thrive Athletic Consulting, LLC. WIAA Coaches Express June 11, 2016. ... SURVIVE •ENDURE •CONTINUE •LAST •SUBSIST ...
Read more