Imagine you are planning a trip from one city to another city in a state you have never been.  Being from Wisconsin, I like to use San Antonio and Houston Texas as examples.  Picture a state map of Texas which you have found from a search on the Internet.  One star shows San Antonio in the southern part of the state and towards the east you see another star which shows the city of Houston.

Now, I am going to drop you off in San Antonio and ask you to drive to Houston using this map.  You can do it.  You probably would start by asking someone for directions, usually a clerk at a convenience store or a gas station.  Then you begin by driving southeast on the highway, watching for directional signs, hoping to find one that tells you what exit to take sending you in the right direction towards Houston.  The trip would take quite long time and you would spend money on gas, lodging, food, and most likely experience a lot of frustration along the way.  Who would travel this way?

Most of us would buy a road map with the individual highways and city streets clearly marked.  We would then be able to estimate who much gas we might need, we would call ahead and make hotel reservations in Houston so when we got there we knew we had a place to rest for the night.  We might use the Internet and plan where our favorite restaurants where or plan to try a famous restaurant we read about in a travel magazine.  We would do research for the trip in order to have a pleasant experience with a lot less frustration.

That is what strategic planning can do for an organization.  It is like traveling with a road map rather than a state map.  Organizations that use strategic planning often have a more specific focus and direction for accomplishing their goals.  A strategic plan can be one of your most valuable completive advantages!

Let me know what you think.

Take Care,

Gary

·         An unbiased written assessment of these areas using our disciplined process and proprietary assessment tools;

·         Company Culture

·         Human Resources

·         Marketing Strategies

·         Operations/Management

·         Financial Analysis.

·         Comparison of your company’s performance data to industry averages.

·         Summary of the areas your company is performing very well.

·         Summary of the areas where your company needs to improve upon.

·         Identify areas where your company needs your immediate attention.

What we will need from you:

·         Two hours of your time

·         30 to 60 minutes with your key employees

·         Payment of $360 due upon completion of assessment

Call us today at (920) 427-5077 for a no obligation consultation to learn more about this customized program.

Let me know what you think.

Take Care

Once the most urgent issues are dealt with, now you can begin to be proactive in developing a customized process to deliver your organization’s strategic goals and objectives. 

An important concept for strategic planning has to do with the owner’s ability to redirect his or her energy from ‘fire fighting’ to ‘strategic planning’.  Once the root causes are eliminated, the owner’s time spent fighting fires will be significantly reduced and this time must be filled with other value added activities.  Why would anyone want to eliminate a main portion of their daily activities without filling it with something else?  These emotions have to be dealt with within this process.  Having the owner focus on the metrics used to track the success of the strategic progress in the various areas will add value to the entire strategic planning process.

There are several very good tools used to assess your organization.  This is not a random process, it is calculated and structured using proven tools to show benchmark metrics which will be used later to assess the success of the strategic planning process. 

Let me know what you think.

Take Care

Owners and managers can understand how their businesses are performing by understanding these liquidity ratios;

Return on Equity Ratio (ROE)

Return on Asset Ratio (ROA)

Asset Turnover Ratio

Account Receivable Collection Period

Current Ratio

Quick Ratio (Acid Ratio)

Debt to Asset Ratio

We will look at the three ratios your banker will probably look at first; Current Ratio, Quick ratio, and Debt to Asset Ratio.

Your Current Ratio is calculated by dividing your current assets found on your balance sheet by your current liabilities, also found on your balance sheet.  This ratio is often expected to be a 2 to 1 ratio, assets to liabilities.

  Your Quick Ratio (also known as your Acid Ratio) is calculated by dividing your current assets minus your inventory by your current liabilities found on your balance sheet.  This ratio if often expected to be a 1 to 1 ratio, assets minus inventory to liabilities. 

Your Debt to Asset Ratio is calculated by dividing your total liabilities found on your balance sheet by your total assets, also found on your balance sheet.  This ratio may be depended on your industry.  Here is why you need industry benchmarks in order to analyze what the information is telling you.

Knowing these three ratios and how your organization performs to your industry averages can greatly enhance the conversation between you and your lender.

Let me know what you think,

Take Care

Your managers should have a good understanding of their specific departmental financials and how those numbers effect the organizations financial performance overall.  They don’t have to fully understand the cash flow statement and they may never see the balance sheet in a privately owned company, but they do need to manage to the numbers on the profit and loss statement.   Remember, the profit and loss statement is a management tool showing the operational effectiveness of your organization.  

One important financial tool for managers is an operating budget.  By having an established budget, your managers will have a target, a benchmark, and set goals.  The best budgets are the ones your managers will have helped to develop.  At the end of the day you want your managers to believe they can achieve the target budget numbers and a great way to accomplish this is to have them contribute to the development of those numbers.  It is harder to say the numbers are bogus and unreachable if they had a hand in building the budget with your support.  Half the battle in reaching your organization’s overall financial goals is having a positive attitude and believing you can accomplish the budgetary goals of each department. 

Let me know what you think.

Take Care

A simple monthly newsletter with employee contributions can help your employees feel connected to you and your organization.   A bulletin board can help communicate customer satisfaction, quality benchmarks, exceeded sales goals, and other important information you chose to include. 

Establishing a formal process for communications and including the policy within your employee manual will show you’re serious about open communications to all members of your organization. 

Creating a culture of ‘open communications’ does not cost a lot of money but can return huge dividends through higher employee morale and improved employee and customer retention rates  

Let me know what you think,

Take Care

Budgets should include percentages against the total revenues of the organization and have a section for ‘comments and assumption’.  Each budget should be analyzed against actual performance on a ‘line-by-line’ basis from the profit and loss statement.  Each line should have a variance column reflecting how actual performed to budget. 

Using the budget as a financial analysis tool, you can identify where your organization is performing above the estimated budget and possibly duplicate those positive actions throughout your organization.  You can also identify where your organization is under-performing to budget and either correct a miss-calculation on your budgeted profit and loss statement or identify an area where you need to improve and correct an immediate problem.  

Not only will you be able to benchmark against your budgeted profit and loss statement, you can also benchmark against a budgeted cash flow statement allowing you an insight to what your cash needs will be on a monthly basis.  Each of these budget statements should reflect any seasonality your business may experience.  Having this information will also greatly improve the quality of your discussions with your lender.

Let me know what you think.

Take Care

Can you read and understand either of these two phrases? 

If you can read and understand either phrase, you have most likely taken a class in Spanish or French during your school days.  Is it prudent for us to think we could understand either phrase without having some type of training in that language?  Most of us would say no.

Well, reading and understanding your company’s financial statements without having the proper training is just as difficult as trying to understand either of these two phrases without having the proper training. 

Most business owners launched their businesses in an area where they have a specific talent and often have years of experience practicing the technical aspect of that business.  But they may not have years of experience reading and analyzing Profit and Loss statements, Cash Flow statements, and Balance Sheets.  In order for owners and managers to make the best business decision for the future sustainability and growth of their businesses, they must understand their financial statements to the point they can read them and analyze what these statements are telling them about their business.  

It’s not unreasonable for business owners and managers to seek out the proper financial training in order to fully understand their financials, just like it is not unreasonable to seek out the proper training in order to fully understand a foreign language, even the simplest of phrases such as; “Hello, how are you?”

If you want to undersand your company’s financials fully, give us a call.  We can help.

Let us know what you think,

Take Care

Besides giving your present workforce guidance as to what you expect of them, job descriptions can also aide you and your management team in;

·        the recruitment process

·        the selection of new hires

·        the training of current and new employees

·        the performance appraisal process

·        the improvement of employee retention

Having job descriptions can save your company money as potential job candidates may chose to ‘self select’ out of a job position before you hire them because they are fully aware of what you expect and they are not willing to do that type of work.  This can save hours of lost training time, reduce employee turnover, and improve employee morale.

A job description is just one of many valuable tools your managers can use to manage people in a way that protects every person’s self-esteem and also gets the job done.

Let me know what you think.

Take Care