Blog - Ashley Thomson | Business Coach Melbourne

Cashflow - don't let it kill your business

Thu, 17 May 2012 00:00:00 -1000

There’s one major factor that separates good, solid businesses from businesses that are always struggling – reliable cashflow. And, cashflow is not just how much money is coming in your doors.

One of my clients recently had a situation that illustrates the difference between great revenue and great cashflow. My client unearthed a fantastic new sales opportunity selling into a large franchise chain, which would have been worth $500,000 to the business. It had great gross margins, and the chain was actively looking to change their regular supplier. It looked like a great opportunity.

Until, that is, we looked at the cashflow implications. This is a classic situation that many small business owners fall into – looking at the money to be made, but not the money that needs to be spent first.

When we looked at the deal, we found that my client was going to get 30 day terms from suppliers, and was given 45 days end of month from customers – except for certain stores where the terms were 90 days. After we mapped this out and accounted for the inventory my client would need to hold, we found that in month six there was going to be a $200,000 cashflow shortfall. Where was this money going to come from?

Luckily we had the time to renegotiate some of the terms with the customers and the suppliers, and we were able to present the cashflow analysis to the bank to receive favourable finance. My client was able to go ahead with the deal, knowing that the business had the finance to support it. This cashflow crisis was averted because we had the time to act before it was too late, but many small businesses don’t.

So, when you’re considering a new venture, make sure you know when you can expect to receive revenue, but also when you will have to pay your suppliers and your team’s wages. Make sure that the great deal you’re looking at isn’t going to put you out of business.

Brad Sugars Live Australian Tour

Mon, 23 Jan 2012 00:00:00 -1000

In February 2012, Brad Sugars, found and CEO of ActionCOACH is coming to Australia with his Business is Booming tour.

It's always a great experience to see Brad Sugars present, and I have 20 tickets available for visitors to my blog. Click to register with my code: AT65.

Brad Sugars is an excellent speaker and his audiences walk away feeling motivated and full of ideas to improve their businesses.

Here are the details:

Date: Tuesday 14 February 2012

Time: 6:00PM - 7:00PM networking time. Presentation 7:00 PM - 10:00 PM

Location: Sofitel, 25 Collins St Melbourne

Click to register with my code: AT65.

What to do when your salespeople stop selling

Mon, 05 Dec 2011 00:00:00 -1000

Your salespeople are critical to your business, but anyone who manages a sales team will tell you it’s not always easy. So, when your team or just one of your salespeople stop performing, what do you do?

First of all, make sure that you know how your team perform day to day. Sales is the one role in the business where you can measure each individual’s exact performance... so make sure you do it.

One of the first things to look at when your salespeople stop selling is to make sure you have done your job as the business owner. Have you set everything up to allow your team to sell?

Build a marketing machine that delivers ongoing consistent leads for your sales team – this doesn’t need to be all the leads they need, just a good amount to get them off and running each week.
Measure each salesperson at least weekly – measure their sales activity (calls made, appointments held, quotes produced etc) as well as their sales results.
Train them – Weekly debriefs on sales techniques, objection handling, difficult prospects, time management etc.
Incentivise them – give them the carrot to aim for in the form of a commission structure, but also make them aware of the ‘stick’ they will be introduced to if they don’t do the sales activity to achieve the results.

The key thing is to know what their results are, so that you know what area to concentrate to fix problems when they arise. Design your performance tracking carefully to collect the data you’ll need. That way, when you hit a performance issue, you know whether you’re dealing with a lack of activity on the salesperson’s part, a need for more training, lack of care and accuracy, or whether something else in the sales process needs improvement.

The printed brochure – it’s not dead yet.

Wed, 30 Nov 2011 00:00:00 -1000

In these days of email, websites, Twitter and Facebook, don't discount the benefits of a quality brochure.

The current trend is for businesses to email brochures to their prospects, or direct them to a website. It’s important to have electronic material for your potential customers to look at, but a quality printed brochure sets the tone for the professionalism of your business.

When you put together your brochure, here a few things to keep in mind...

Use a good graphic designer - don’t skimp on the quality of the design. First impressions count.
Use a professional photographer for your photos. A professional photographer has an eye for the right shot, perspective and lighting. The little things in photos count.
When it comes to text – less is more. Use small amounts of text, to compliment the photos. Don’t overdo it - many people won’t even read the text.
Use a compelling, but professional headline.
Size is important. For a generic company brochure, start with a 4-page A4 size format – a front cover, double page spread, and a back cover. DL is too small.
A good quality print job is important. Ask your printer to run off a sample for you.
Paper thickness – the right thickness is one of the most important things about a professional brochure. Choose paper with a minimum thickness of 250gsm. When people pick your brochure up, you want them to feel the rigidity of the brochure and ensure it doesn’t flop in their hand.

The most important consideration: people will judge your business by your brochure. If it looks and feels professional and gives them the impression that you have invested a decent amount of money in having it designed and printed, they will form a positive impression of your business and continue to consider a relationship with you.

Telemarketing vs Prospecting

Sun, 20 Nov 2011 00:00:00 -1000

How do you find new customers? If you’re like many business owners I’ve met over the years, it might not be by picking up the phone.

Many business owners shy away from phone sales, thinking that telemarketing is ineffective and may not present their business in a good light. I believe that this is because for most people, their experience of telemarketing is of a phone or power company making contact through an offshore call centre to “flog” their latest deal. Telemarketers of that style don’t take the time to understand what your needs are, nor what will be the best solution for you – they simply push whatever it is they’re employed to sell.

Prospecting, on the other hand, is what professional salespeople do. They research a list of prospective customers who are more likely to need their particular service. Often a professional salesperson will send some information beforehand to introduce themselves and their company. When they do contact you by phone, they will identify themselves and the company they represent. They may explain how they came across your company or reference someone who suggested they contact you. They will ask you open questions to understand your needs and help you to identify which of their products or services you might want. Finally if you have both identified a service or product that fills a need for you, they will recommend a course of action. This might involve a face-to-face meeting, a product trial, a demonstration, or similar.

Prospecting is a real skill and is very different to the “churn-and-burn” style of telemarketing used by many phone and energy companies. Done the right way, it can be an effective way of reaching new customers who might never have considered buying from you otherwise.

Be Lazy to be Successful

Thu, 06 Oct 2011 00:00:00 -1000

My clients are often surprised the first time I tell them that the key to business success is laziness.

What that means, though, is that you need to become a great delegator. You need to cultivate a lazy streak, and your first thought when there's a task to be done should be, "Who can do this, so that I don't have to?"

People who struggle the most in business are the control freaks, who feel that they have to do everything in the business themselves to ensure it's done in the right way. For anyone who's done that, it's very quickly apparent that there aren't enough hours in the day for one person to do every task - and the business isn't going to grow very much either. But, if you can give the task to someone else, and they can do it 80% as well as you can, that's good enough.

Obviously, there are going to be some things in the business that will rest with you, and it's certainly possible to go the other way and practice abdication rather than delgation. Delegation doesn't mean hoping someone else will do the work or even just dumping the task on someone's desk. To be a great delegator, you need to empower your team to take ownership of their new tasks.

When you delegate, you need to be sure that your team member understands the basics, such as what the task is and by what time they need to complete it, but that they are also free to make their own decisions. Nothing will de-motivate your staff faster than a control-freak delegator who just ends up redoing the team's work or overruling their judgement. Once you've delegated the task, it's not yours any more, and you shouldn't step in again unless you become aware of a serious error.

Develop a system in your business for keeping track of who has control of a task at a given time, and where it is up to.

If you feed your laziness with effective delegation, you'll free up time to move on to more important things in the business.

Business journalist Leon Gettler interviewed me on this topic recently.Read more in his article.

Where did your week go?

Fri, 30 Sep 2011 00:00:00 -1000

Do you find that you get to the end of your week, and feel like you didn’t achieve anything? If you feel like you spend your working hours dealing with all the little things that happen in your day, rather than ever getting around to the work that you mean to do, then the default diary can be a good solution.

A default diary isn’t like a normal diary, which lists appointments but keeps the rest of the week appearing ‘free’. Instead, you schedule your important tasks as well as your appointments. You might block out three hours every Tuesday morning to deal with the business finance, and an hour on Thursday to look at your marketing. Include all your commitments to yourself – everything that you regret not doing whenever you’ve let your week overtake you in the past. That could be a regular lunchtime walk or visit to the gym, making sure you spend some time reading up on new developments in your industry, or even making important personal phone calls.

It doesn’t have to be a complex thing – you can use whatever system you’re already using. Outlook, a paper diary, or Google Calendar will all the do the job.

The key is, that your entries in the default diary are all equally important. You wouldn’t interrupt or just decide to skip a scheduled meeting with a client, and your default diary commitments are the same. During your blocked-out times, you are in a meeting (even if it is with yourself), and you shouldn’t be disturbed. That’s time for you to get your head around the finance or the marketing plan or whatever else, without interruptions.

Don’t try to block out your whole week. About half of your available time is about right. You need to have the flexibility to deal with unexpected events that come up during the week.

With a default diary, you can to the end of your week and feel like you’ve been in control of it, because whatever else happened, you made some progress on those areas you’d blocked out to work on.

Business journalist Leon Gettler interviewed me on this topic recently.Read more in his article.

Is your quoting process losing you money?

Thu, 29 Sep 2011 00:00:00 -1000

As customers move away from accepting ticket prices at face value, more and more businesses are using quoting to generate a price to present to customers. There are hidden traps in the quoting process that business owners need to watch out for.

Businesses who quote often use standard rates, whether they be meterage rates, day or hourly rates, or a standard materials markup. But the true cost of taking a job from quote to completion isn’t often taken into account when standard rates are used.

Many businesses have little idea of their true costs, and if they need to discount to win the job, they don’t know at what level they will lose money on the job.

To quote on a job and know that you will make a profit every time, you need to understand the true costs in your business. That comes from understanding the financials, what makes up your fixed and variable costs, and then understanding your breakeven rates when you put the quote together.

So, sit down and have a look at your last few complete jobs. Analyse the actual cost of the resources you put into each job – materials, labour – including overtime and any extra time spent than you’d planned for, and including your own labour, any permits or fees you paid for the job, transport, any other costs, and covering a portion of your everyday overheads. Then look at how much you were paid for the job.

If you found you made little profit, broke even, or even lost money on the job, then you should be making changes to your estimating and quoting process.

Change Management

Wed, 14 Sep 2011 00:00:00 -1000

Change management isn’t just for big corporations.

Have you ever introduced a new idea to your team, only to find that it never gets off the ground?

It isn’t enough to just introduce a new strategy into your business; you need to get your team to embrace it. Too often as business owners we think that as long as we tell someone to do something, they will follow our lead. Experience teaches us that isn’t the case. We need to sell the idea to them and get them to take ownership.

I was coaching a business owner the other day, who was in the process of rolling out performance reviews with their key managers to the rest of the team. She wondered why no one had implemented the KPIs. Everyone had an excuse; they were too busy.

We needed to win over the hearts and minds of the key managers so that they saw the new KPIs as a priority. Their excuse wasn’t just an excuse; they are busy. But people make time for tasks that they feel are valuable and important. To get the managers to come on board with the new strategy, my client needed to get them to take ownership and embrace the concept before they would really want to do it.

To get your team on board with the new strategy, they need to understand its purpose and why it’s important to the business. Expecting them to do it just because they are asked isn’t enough.

Selling Your Business – Very different to selling your house

Wed, 03 Aug 2011 00:00:00 -1000

Almost nobody in business thinks of how they are going to exit their business until they quite suddenly reach a point where they need to or want to.

Too many people think that when it comes time to exit the business, they can simply advertise it online and someone will come along and offer them the price they expect. While this works in many property transactions, it almost never works in business.

There are two types of disappointments business people experience:

They think they have a business to sell, but really all they have is some stock, maybe some equipment and not really anything else.
They have a good business and have built it up over time, but unfortunately the number of people with $1M+ in cash ready to buy it is so small that they never end up selling it for the price it is worth.

So what’s the solution?

Plan your exit well in advance ... at least 3 years before you want to leave.

Look at all your options and plan for them. Think about who might be interested in your business and consider how you might appeal to them. For example, recruiting key staff with a view to selling the business to them over a long period of time, selling to a larger competitor, or selling to a strategic buyer looking to enter your market. Or, selling to a publically listed company with a history of acquiring privately held businesses in your industry.

Whichever way you go, you will need to prepare the business for sale to make it as attractive to your buyer as possible.