Full Circle Business Development

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Article on the impact discounting can have on your business and the impact of raising prices.

The TRUE impact of discounting.pdf

Hope this Helps

Tony and Linda Bristow

Based on the Gold Coast, businesses from Ballina to Brisbane can work with Full Circle Business Development to improve profits, increase value and grow.

WHAT IS EXIT PLANNING or SUCCESSION PLANNING?

Put simply, Exit Planning is about leaving your business on your own terms. It is one of the most essential parts of your overall Business Plan. Some consider that it is THE most important part of your business plan as it will be the end result of years of hard work.

Exit planning is absolutely essential to ensure you receive the maximum financial return when you sell your business and minimise tax liability. It ensures you receive the full benefit of your hard work, as well as the successful transfer to the new owner.

Selling your Business or a Succession Strategy are multi faceted processes that includes a Diagnosis of you business, Valuation of your business, Setting a time frame, Establishing transition terms and many other considerations.

It is surprising how many business owners neglect to plan for their inevitable exit.There are 2 main answers owners respond with when asked about leaving the business and they include either death or winning the lottery!!

You may be just like many other business owners who are too consumed with the day to day running of their business to even consider the formulation of an exit or succession plan. This is a mistake. Exit planning is as important as marketing or sales.

Hope this helps

Tony and Linda Bristow

Based on the Gold Coast, businesses from Ballina to Brisbane can work with Full Circle Business Development to improve profits, increase value and grow.

The holiday season is looming large – and with it the parties, the networking opportunities, the tales of good cheer. Whilst the hangovers may be temporary, there is a more serious issue that all of us need to face – this is the worst time of the year for corporate cashflow.

Did you know for example that for the last 5 years March has almost consistently been the worst month in the year for insolvencies. According to the ASIC statistics this year there were 1095 External Administrations in March up from about 668 the previous year. Now given 2009 has been the first full year in which we have seen the effects of the downturn associated with the Global Financial Crisis, next March could be even worse as battered balance sheets, reduced margins and tightened bank credit take their toll. So why March every year?

What the Holiday Season Means To All Of Us :
1) We all have two week sales months in December & January……..
2) We all still have overheads we have to pay…….
3) Businesses stop paying each other from early December until mid February – it’s a regular cycle especially big companies – where key people are on holiday to sign off on your payments.

It becomes a vicious circle – nobody pays anybody because nobody has been paid, and this cycle doesn’t normally stop or get broken until mid February. As a result those companies that are already in a very weak position often decide to call it a day or a significant creditor, the ATO or their bankers lose patience and the rest is history.

Here’s an example from our client files of what can happen……

In late January this year we had a civil engineering client that emailed us on a Wednesday night. The Finance Director of their largest customer was on 2 weeks leave, resulting in no-one being able to sign off on a significant interim payment, which the client urgently needed to pay his staff wages on the Friday. It was a very uncomfortable situation.
Now to get cash in 2 business days from a professional lender is almost impossible – but because we work with working capital lenders all the time we called in a favour & secured a facility against two of the clients outstanding invoices, securing a small $70k facility in less than 48 hours to get the client through this difficult time. It was expensive – but the alternative was worse……a building site with no staff and a broken contract had the potential to be terminal. With some careful planning this sort of experience can easily be avoided.

Nobody plans to fail they only fail to plan.

The key advice we would offer anyone in business is to get your house in order before the Holiday season really starts:
1) Plan your cashflow until at least 31st March 2010 and work out where your gaps lie.
2) Get solid credit control structures in place. If you are selling now – ask when you can expect payment & try to get commitment from your customers to payment prior to Xmas (if necessary negotiate an early settlement discount)
3) Chase outstanding debts hard now to hit the payment runs at the end of November – otherwise you may not get paid until mid February
4) Chase any old debts hard before Xmas – otherwise they may turn bad next year
5) If you need to borrow get your application in place ASAP – this time of year all lenders get backed up as so many companies try to get finance before the year end, and decisions are always delayed.

Raising Finance
The GFC has made it harder to raise finance resulting in :
a) Increased rejection rates
b) Increased costs
c) Delays to decision making – primarily as a result of banks shedding 10%-15% of their workforce.
d) They also undertake their own due diligence – e.g. to ensure goods have been delivered.

If you need to borrow additional cash
a) Approach your bankers BEFORE a problem arises NOT as it arises. Lenders like to see a proactive approach to borrowing and hate surprises or being forced to make difficult decisions – their easy decision will be NO
b) You might want to consider multiple applications for funding – but be aware that banks are very cautious at the moment about “new to bank” facilities.
c) You might want to also consider alternative sources of finance that don’t require real estate security – for example factoring & inventory finance – after all if your bank turn round and say no you don’t want to be left high and dry.

Conclusion.
Because the next 4-5 months could be potentially difficult for all of us, it is essential that you plan your cashflow to at least 31st March 2010 – and instigate appropriate measures. If you don’t you might have an uninvited guest at one of your customer parties – an Insolvency Practitioner – or worse at your own.

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About the author: Tim Lea has specialised in factoring and invoice discounting for the past 20 years and is a published author on the subject of factoring and invoice discounting.  He is a partner of Cash Stream Financial (www.cashstream.com.au), who are specialists in raising factoring and inventory finance.  You have full permission to reprint this article provided this resource box is kept unchanged

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Based on the Gold Coast, businesses from Ballina to Brisbane can work with Full Circle Business Development to improve profits, increase value and grow.

Well, maybe not dead, but old models do need updating.
There is a revolution occurring in sales which every executive must understand. New scientific studies find new models are creating a transformation in the way we view selling, leading to a new framework and an urgent need for new skills. Companies that adapt quickly see sharply increased revenue – and profits.

In every company, sales pays for everything else. So why is it that in a recent study, 92% of sellers were judged by those who manage them to be selling at extremely low levels? The study pointed to ineffective management of sales opportunities as the principal cause.

Count on it: An unskilled sales force, or one that isn’t aligned with the market, results in:
1. Resistance, skepticism and even distrust;
2. Difficulty attracting and converting new prospects;
3. Much longer prospecting and sales cycles; and
4. Sales and opportunity costs that are too high and take too long to develop.

Research shows that there is a revolution occurring in sales which every executive needs to understand. The research is based on scientific study instead of opinion-based surveys. The new models uncover a transformation in the way we view selling, leading to a new framework and skills that make a quantum leap by becoming more aligned with current realities.

More importantly, companies adopting the new, 21st century models find remarkable success as soon as they draw on the research to change the way they relate to customers or clients.

Five Key Success Points

Conclusions from the research lead to five key findings, creating the new framework and skills needed to compete successfully in 2008.

Team Synergy – It was discovered that team synergy and cooperation rank among the highest reasons for successful selling. Team synergy is a total alignment between a strategic marketing plan, the selling team and upper management, each working to achieve and support the other’s goals using empowering processes and relationships.

Active and Dormant Demand – Active Demand is a dissatisfaction that is intense enough to kick-start the buying process. Dormant Demand is a dissatisfaction that is perceived to be low on the prospect’s priority list and therefore not acted upon until circumstances require it to become a priority. It’s important to note that top sellers work with dormant dissatisfaction; order takers – much of what passes for sales today – work with active dissatisfaction. Top sellers are able to identify dormant dissatisfaction that relates to their goods and services. They are able to transform it into active dissatisfaction, elevating it on the prospect’s priority list and thus leading them to take action.

Demand Creation Programs – The new, scientific-based research led to the virtual elimination of the most dreaded, most costly and inefficient of all sales activities: Prospecting. “Demand Creation Programmes” are exponentially more effective and cost far less than traditional prospecting and mining. Basically, demand creation leverages the prospects dissatisfaction, priorities and curiosity in a way that leads a potential customer or client to not only welcome a business dialogue with a seller but, if done well, leads to prospects actually call to do business with your company.

The Buying Sequence – Top sellers manage the “buying sequence;” they never sell. The buying sequence is a predictable progression all buyers go through to arrive at a buying decision, and top sellers use it to pilot any buying situation with pin point accuracy to a favorable conclusion.

Facilitative Probing – Top sellers use a series of probing models and a strategy to apply them to uncover a buyer’s dormant demand. Using this “discovery” model and the buying sequence together allows top sellers to ask thought-provoking questions that lead prospects to think through the right course of actions for themselves culminating in a decision they are committed to.

Fuelling The Revenue Engine

Selling is the engine that drives every company.

That’s why every executive – from the owner or CEO to the sales manager – must take a long, hard look at how sales is functioning. Is there synergy among the various parts that make up your connection with the market? How much will you benefit from moving your sales force to the next level?

Savvy sales leaders are proactive, not waiting until the wolves are at the door. They take on the responsibility of constantly elevating their company to the next level.

About the author or the publisher
A former assistant editor of “Business Week” magazine, and a television news producer and reporter before that, Charley James began writing when he was about eight and hasn’t stopped. Now, he covers and writes news articles including his own independent investigative reporting, writes articles, websites and newsletters for clients, drafts speeches, creates and writes ad copy, and crafts humorous essays about things people encounter every day. Charley has been published in many magazines.

Based on the Gold Coast, businesses from Ballina to Brisbane can work with Full Circle Business Development to improve profits, increase value and grow.

As MAUS Accredited Partners, we can also deliver world class business software applications. Software for Business Planning, Policies & Procedures, Human Resources and Business Intelligence.

Businesses that fail to plan is setting yourself up for future problems when it comes to being competitive and remaining viable, according to most business advisers. Less than one in four small businesses operate from a business plan and statistics show that almost 85% of small businesses fail within the first year of operation. It doesn’t need to be that way. Running a business without a business plan is like stumbling around in a dark, unfamiliar room and the small business failure rate could be improved if more businesses had a better idea of their business planning.

Effective planning is necessary to ensure business success. That’s an important sentence. You may want to read it again. Business plans are traditionally thought only for “start-ups”, however they are of vital importance for existing businesses, especially when considering your exit strategy or looking for improvement. Whether you are starting or buying an existing business; your business plan is one of the most important management tools determining the success or failure of your business venture. The fact is, if you don’t have one, your chances of success in business are greatly diminished. You also place yourself at a competitive disadvantage. Simply being an expert in your field does not automatically guarantee success in your business. Good business plans almost become your guiding star, giving you your bearings and helping you steer the business.

A business plan becomes an operational tool, guiding the owner through all phases of the business. This also allowed ideas to be better communicated especially when securing finance or keeping staff in tune with the business direction. The process of creating a business plan forces you to take a realistic and clinical look at your business as a whole. By taking a clinical look at your business, you can identify areas of strength and weakness.
Your business plan will help you to:

•  Better understand the business you will be operating
•  Identify your goals and objectives
•  Develop strategies to meet them
•  Pinpoint problems and suggest ways of overcoming them
•  Become aware of your competitors
•  Design and implement strategies to gain market share
•  Prepare realistic financial and operational forecasts.

Creating a business plan is not as daunting as some would think. It does take a bit of time and effort but it is well worth putting in the effort in the short-term to gain the longterm benefits. A sound business plan will also help those taking the plunge and starting a new business venture to find out what is happening in the applicable industry, the competitor’s strengths and weaknesses, potential pricing, advertising requirements and the start-up costs involved.

Hope this helps

Full Circle Business Development – Gold Coast

Improving Profit. Increasing Value.

We speak with many business owners. Time and again, Stress is a main topic of conversation. There is a great deal of stress that goes along with running a business, leading owners and their family to have a tough time making things work as they feel they have to take time from other activities in order to make things work. Unfortunately, people put stress around many issues – money, deadlines, staff, customers etc. Controlling stress is a big issue facing business owners. If it isn’t, it possibly should be, as managing stress can significantly improve the quality of your business and personal life. It’s not hard to do, but you may have to make some simple changes.

Hope this helps

Full Circle Business Development – Gold Coast

Improving Profit. Increasing Value.

Clearly, what competitors are doing cannot be ignored when setting prices. For example, a company with a small share of the market will probably find the general price level already set for him. This does not of course rule out the possibility of finding a differential advantage, which will enable a price well above the general level to be charged, especially if only a small segment of the market is being attacked. For example, the fact that ball-point pens are widely available for a few dollars does not prevent Parker’s doing good business with very expensive (and top quality) pens for the gift market.

Very often it will be wise to accept competitive prices as the starting point for any development of a marketing strategy. It does assume, however, and possibly wrongly, that competitors have got their sums right. Against this, in an established market consumers will probably have come to accept this level as the ‘going rate’, and will need a lot of convincing if they are to accept something different. Traditionally the concept of the ‘just price’ has been talked of in some quarters. This was supposed to be the price acceptable to both buyers and sellers. Normally, of course, this will be the price level that has obtained in the market over recent times –in other words, what the major competitors in the field are currently charging.
Where the ‘going rate’ is set in this way by competitors, it is often useful to do backward costing, i.e. start with the price at which the product must be sold and then work backwards to the price at which it has to be produced if profit targets are to be met.

The term competitive pricing is sometimes used to describe a price-setting policy where the ‘going rate’ set by competitors is used as a reference point. A price may be set ‘in line with’ the competitor’s price or ‘higher than’ or ‘lower than’ the competitor’s price, perhaps on the basis that we wish our product to be perceived as ‘better than’ or ‘cheaper than’ the already established competitive product.

Hope this helps

Full Circle Business Development – Gold Coast

Improving Profit. Increasing Value.