sme business factors c2 version 25 july08
DESCRIPTION
Information on basic business aspects presented in a very clear and straight forward style, aimed at the SME market.TRANSCRIPT
Business Tips for
Small Organizations
Eur, Ing., Dr Lee E J Styger
Copyright © Eur. Ing., Dr Lee E J Styger
the burning issue
on life, the universe & everything
Copyright © Eur. Ing., Dr Lee E J Styger
Why Are We Here?
BASED ON
MAXIMUM
DELIVERY
ALL STRATEGY
SERVICE
FUNCTION
LIFESTYLE
POSITION
PROFITS
WHAT
STAKEHOLDERS
OWNERS TO DELIVER
AN
ADVANTAGE
WHY HAVE A BUSINESS?
Copyright © Eur. Ing., Dr Lee E J Styger
Copyright © Eur. Ing., Dr Lee E J Styger
Strategy
ADAPTIVE
CREATIVE
BIG PICTURE"HOW DO WE SECURE WHERE WE HAVE GOT TO?"
"HOW CAN WE GET THERE WITH RUTHLESS EFFICIENCY?"
"HOW CAN WE GO WHERE NO ONE ELSE CAN GO?"
"HOW CAN WE DELIVER AN ADVANTAGE TO OUR OWNERS?"
"WHAT DOES SUCCESS LOOK LIKE?"
ASKS
FORWARD LOOKING
MAKE
MONEY
TWO REASONS TO BE IN BUSINESS
STRATEGY
the
GENGHIS KHAN PRINCIPLE
the overview
Incase we forget
Copyright © Eur. Ing., Dr Lee E J Styger
Forwarding
INNOVATION
LIFE CYCLE
CUSTOMERS VIEW
VALUE CREATION WHAT IS A PRODUCT?
WHAT IS BUSINESS?
101
102
ECONOMICS
FORWARDING
THE IDEA
Copyright © Eur. Ing., Dr Lee E J Styger
Economics 102
In the Free Market EconomyOnly One Company Can be the Cheapest
the rest have to do something different
Go where no one else can goKnow the customer
Develop new products rapidly to meet customer demandDeliver those products with ruthless efficiency
Delight the Customer
Copyright © Eur. Ing., Dr Lee E J Styger
Economics 101
Choose Customers Who Have The :
Demand&
Ability to Pay
for your products and services
Copyright © Eur. Ing., Dr Lee E J Styger
Copyright © Eur. Ing., Dr Lee E J Styger
Definition - What’s Business?
SUPPLIER
SUPPLIER
VALUE
ADDING
TRANSACTION
INTERNAL
VIEW
DEPARTMENT
DEPARTMENT
VALUE
ADDING
TRANSACTION SERVICES
GOODS
TRANSACTION
SERVICES
GOODS
TRANSACTION
EXTERNAL
VIEWWHAT'S BUSINESS?
Definition - What’s A Product?
PEOPLE
SERVICE
MADE
MANUFACTURED
WHAT'S A
PRODUCT?
Copyright © Eur. Ing., Dr Lee E J Styger
Copyright © Eur. Ing., Dr Lee E J Styger
Creating Value
INNOVATION
DELIVERY
FLEXIBILITY
COST
QUALITY
THE 5 VALUE MEASURES
Develop an advantage by
differentiating yourself in the eyes of
your customers
Higher Perceived Value
Increased Market Share
Increased Revenue
Improved Qualityof Design
Higher Prices
Higher Profitability
Improved Quality of Conformance
Lower Manufacturing & Service Costs
Redrawn from - Evans R, Lindsay W. Manufacturing for Quality and Performance excellence, Thomson South-Western, 2008. ISBN 13: 978-0-324-38227-3
Quality & Profitability - Or Getting As Much Cash As You Can
Serious stuff - it’s in the quality book
Copyright © Eur. Ing., Dr Lee E J Styger
The 3 Key Considerations of Your Customer
CHEAPER
BETTER
FASTER
THE 3 KEY
CONSIDERATIONSAll Customers Are Fickle
they want all that value stuff and they
want it now!
Copyright © Eur. Ing., Dr Lee E J Styger
Copyright © Eur. Ing., Dr Lee E J Styger
Life Cycle
Time
Market
Share
Introduction
Growth
Maturity
Decline
The Life Cycle Curve
This is the one
they tell you about
All
Businesses / Products
Go Through This Curve
Copyright © Eur. Ing., Dr Lee E J Styger
Sustainability - Or Riding the Curves
Total Market Share All Prodcuts
Market
Share
Life Cycle Sustainability
Introduction
Growth
Maturity
Decline
Introduction
Growth
Maturity
Decline
Introduction
Growth
Maturity
Decline
Introduction
Growth
Maturity
Decline
Time
This is the one
they DON”T tell you about
Copyright © Eur. Ing., Dr Lee E J Styger
Sustainability Market leaders try to create entry barriers by replacing products and maintaining intentionally short life cycles
Innovate - New Products / Services
Total Market Share All Prodcuts
Market
Share
Life Cycle Sustainability
Introduction
Growth
Maturity
Decline
Introduction
Growth
Maturity
Decline
Introduction
Growth
Maturity
Decline
Introduction
Growth
Maturity
Decline
Time
“Core business is the enemy of sustainability”K Atkinson 2007
Don’t let the business historians run
your business
This is the line that matters for your business
- its the sustainability and market share line
Copyright © Eur. Ing., Dr Lee E J Styger
The Stages of Innovation & Commercialization
3 OH MY GOD2 THANK YOU GOD
1 PLEASE GOD
THE 3 STAGES OF
INNOVATION & COMMERCIALIZATION
High Dependency Original Stakeholders
High Dependency Supply Chain
Timeline of innovation cycle
1-Identification
2- Nurture / manage
3- Protect 4- Develop /grow
5- Benefit
the idea So What’s it
all about?
Copyright © Eur. Ing., Dr Lee E J Styger
Forwarding
PEOPLE STUFF
ANALYSIS BEING THE BEST
MARKETS
FORWARDING
THE IDEA
Copyright © Eur. Ing., Dr Lee E J Styger
A Thought That is Going to Fester
“It is not the taking part - its the winning that counts”
Time to deliver that advantage
Copyright © Eur. Ing., Dr Lee E J Styger
On Markets & Being The Best
THEY CHOOSE THEIR
"BEST"
YOU DON'T GET TO
CHOOSE FOR THEM
CUSTOMERS WILL
PAY A PREMIUM FOR
"BEST"
EACH HAS ITS "BEST"
FOCUS ON
YOUR "BEST"
COUNTLESS
SMALL MARKETS
NO SINGLE "BEST"
MASS MARKET
MARKETS
&
BEING THE BEST
Copyright © Eur. Ing., Dr Lee E J Styger
On Markets & Being The Best
Adapted from Godwin S: The Dip, Penguin Group, 2007, ISBN: 978-1-59184-166-1
PICK THE WRONG THING TO BE BEST AT
FOCUS ON SHORT TERM NOT LONG TERM
SETTLE FOR BEING
MEDIOCRE
LOOSE INTEREST / ENTHUSIASM
NOT SERIOUS ABOUT IT
GET SCARED
RUN OUT OF MONEY
RUN OUT OF TIME
7 REASONS -
YOU MIGHT FAIL TO BECOME
THE BEST IN THE WORLD
“Only talented people fret about mediocrity”
Copyright © Eur. Ing., Dr Lee E J Styger
Copyright © 2008 - Eur. Ing., Dr Lee E J Styger - email: [email protected]
SWOT Analysis Model
Spend all your time on SWOT
and you have no energy for
business development
ECONOMIC CONDITIONS
MARKETPLACE CHANGES
EXTERNAL ROADBLOCKS
WEAKNESSES
THREATS
NEW TECHNOLOGIES
NEW PRODUCTS
ENVIRONMENTAL CHANGES
TRENDS
KNOWN
OPPORTUNITIES
VULNERABILITIES
EXTERNAL CRITICISM
WHAT COULD WE DO BETTER
WEAKNESSES
RESOURCES
ASSETS
OUR ADVANTGE
WHAT DO WE DO WELL
STRENGTHS
SWOT
This is where we are -
not where we are going to
Copyright © 2008 - Eur. Ing., Dr Lee E J Styger - email: [email protected]
The 4 Working Styles - HR and all that Stuff
Focus your business on who you are
now
and then team with the other styles as
your business grows
LOVES HANDS ON WORK
TASK ORIENTATED
IMPLEMENTER
CARRIES OUT TASK TO END
FOCUSED
DETERMINED
CLOSER ANALYTICAL
DETAIL ORIENTATED
METICULOUS
FACT FINDER
QUICKLY MOBILIZES ENERGY
SEE OPPORTUNITY
HIGHY ENERGETIC
QUICK STARTER
THE 4 WORKING STYLES
the payoff
How do we
manage
this lot?
Copyright © Eur. Ing., Dr Lee E J Styger
Forwarding
MEASURING THE BUSINESS
CONTROLLING THE BUSINESS
SALES
MARKETING
TIME MANAGEMENT
SUPPLIER MANAGEMENT
CASH FLOW
FORWARDING
THE PAYOFF
Copyright © Eur. Ing., Dr Lee E J Styger
Copyright © Eur. Ing., Dr Lee E J Styger
Cash Flow
Cash is King - cash is king -
cash is king
DO NOT LOAN
TO
YOUR CUSTOMERS
FAST
YOUR MONEY
COLLECT
CUSTOMER BASE
LEADS
PROSPECTS
PIPELINE
BUILD
CASH RETAINED
CASH OUT
CASH
FLOWCASH IN
MANAGE
CASH IS KING
CASH IS KING
CASH
IS
KING
CASH IS KINGTHE 3
MOST
IMPORTANT POINTS
CASH FLOW
Copyright © Eur. Ing., Dr Lee E J Styger
Types of Cost
Drive out cost from your business
- not quality and not value
ALL RESOURCES OBTAINED
IN A GIVEN TIME FRAMETOTAL
RESOURCES USED
IN NON-PRODUCTION
PERIOD
USED TO
PRODUCE PRODUCT
COST OF RESOURCES PRODUCT
FOR RESOURCES
CASH PAYMENTS
OUT-OF-POCKET
CURRENTLY OWNED
ASSETS
PAST PAYMENTS
ACTUAL
FUTURE BENEFITS
FORECAST PAYMENTS
EXPECTED
THE 6 TYPES OF COST
Copyright © Eur. Ing., Dr Lee E J Styger
Supply Chain Management
You stand or fall because of your suppliers
MATERIALS
TRANSPORT
LANDLORD
PHONE COMPANY
PROFESSIONAL ASSOCIATION
IT PROVIDER
LAWYER
ACCOUNTANT
BANKS
YOUR SUPPLIERS
THE SHADOW SIDE OF
YOUR BUSINESS
You manage them -
don’t let them manage
you
Copyright © Eur. Ing., Dr Lee E J Styger
Time Management - [tM]
BE MANAGED
TIME MUST
EVERYTHING
TIME IS
MONEY
TIME IS
TIME MANAGEMENT
You are a business -
time keeps working when you do not
Copyright © Eur. Ing., Dr Lee E J Styger
Thoughts on the Pink & Fluffy - [Marketing]
YES
YES
YES
ACCESS
YOUR
MARKET
YES
DEFINE
YOUR
PRODUCT
YES
KNOW YOUR
MARKET NOT
BROCHURE
NOT
T SHIRT
NOT
TOOLS
WWW
NOT
LOGO
MARKETING
&
the FLUFFY STUFF
Don’t spend too much time on the
tools and forget about the job in
hand
Copyright © Eur. Ing., Dr Lee E J Styger
Sell - Sell - Sell - [or generating a transaction]
Don’t be afraid to ask for the order
ASK FOR THE ORDER
CLOSE
TO YOUR PRODUCT
THE NEED / VALUE
LINK
THE NEED
FIND
QUESTIONS
ASK
RAPPORT
ESTABLISH
THE 5 STEP SALES PROCESS
Copyright © Eur. Ing., Dr Lee E J Styger
Keeping Control CUSTOM
PAPER
SAP
JOB SHOP
WINDCHILL
TEAM CENTRE
PLM
PAGE MAKER
SAGE
ACT
MYOB
DOCUMENTOR
NUMBERS
EXCEL
TOOLS FOR BUSINESS CONTROL
KEEP A SINGLE
DATABASEYOU MUST -
keep control of your business
Keeping Control - A Popular Example (DATABASE)
KPI's & DATA ANALYSIS
STOCK CONTROL
LETTERS
FAX
BASIC MARKETING
SALES FUNCTIONS
PAYROLLHR
SUPER
TAX
GST
LEGAL REPORTING
BILLING HOURS
SUPPLIERS
CUSTOMERS
RECORDS
MYOB
A BUSINESS CONTROL
SYSTEM
Copyright © Eur. Ing., Dr Lee E J Styger
So much more than
invoicing and tax payments
2008
Master
Monthly ExpenditureMonthly ExpenditureDate Description R&D / IP Tax / GST Prof Services Post Stationery Communications Travel (Australia) Travel (Overseas) Accommodation Hospitality Car Parking Consumables Capital Equipment Journals Prof Subs Other Total Mileage
1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
6 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
7 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
8 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
10 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
11 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
12 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
13 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
14 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
15 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
16 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
17 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
18 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
19 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
20 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
21 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
22 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
23 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
24 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
25 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
26 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
27 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
28 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
29 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
30 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
31 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Totals 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
NOTE: MULTIPLE SIMILAR EXPENSES (I.E. CAR PARKING) ACCRUED ON THE SAME DAY ARE ENTERED AS A SIMGLE TOTAL IN THE FORMNOTE: MULTIPLE SIMILAR EXPENSES (I.E. CAR PARKING) ACCRUED ON THE SAME DAY ARE ENTERED AS A SIMGLE TOTAL IN THE FORMNOTE: MULTIPLE SIMILAR EXPENSES (I.E. CAR PARKING) ACCRUED ON THE SAME DAY ARE ENTERED AS A SIMGLE TOTAL IN THE FORMNOTE: MULTIPLE SIMILAR EXPENSES (I.E. CAR PARKING) ACCRUED ON THE SAME DAY ARE ENTERED AS A SIMGLE TOTAL IN THE FORMNOTE: MULTIPLE SIMILAR EXPENSES (I.E. CAR PARKING) ACCRUED ON THE SAME DAY ARE ENTERED AS A SIMGLE TOTAL IN THE FORMNOTE: MULTIPLE SIMILAR EXPENSES (I.E. CAR PARKING) ACCRUED ON THE SAME DAY ARE ENTERED AS A SIMGLE TOTAL IN THE FORMNOTE: MULTIPLE SIMILAR EXPENSES (I.E. CAR PARKING) ACCRUED ON THE SAME DAY ARE ENTERED AS A SIMGLE TOTAL IN THE FORMNOTE: MULTIPLE SIMILAR EXPENSES (I.E. CAR PARKING) ACCRUED ON THE SAME DAY ARE ENTERED AS A SIMGLE TOTAL IN THE FORM
MONTHLY TOTAL "CONSUMABLESMONTHLY TOTAL "CONSUMABLES 0
“t” = invoiced sales - consumables / number of hours worked“t” = invoiced sales - consumables / number of hours worked“t” = invoiced sales - consumables / number of hours worked“t” = invoiced sales - consumables / number of hours worked
T =
2008
Master
PROJECTS
CLIENT & TITLE R&D
Date Work Description TBP 801 801 TBP 801 802 TBP 801 803 TBP 801 804 TBP 801 805
1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
6 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
7 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
8 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
10 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
11 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
12 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
13 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
14 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
15 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
16 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
17 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
18 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
19 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
20 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
21 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
22 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
23 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
24 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
25 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
26 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
27 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
28 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
29 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
30 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
31 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Totals 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Invoiced Sales 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
MONTHLY TOTAL HOURS WORKEDMONTHLY TOTAL HOURS WORKED 0
Other Charges (i.e. Flights)
MONTHLY TOTAL INVOICED SALESMONTHLY TOTAL INVOICED SALES 0
KISS Principle
Kiss business control - simple spread sheet
controls all billing hours and outgoings + “t”
the “historians” keep it legal!
Copyright © Eur. Ing., Dr Lee E J Styger
Copyright © Eur. Ing., Dr Lee E J Styger
What to Measure
STAFF TURNOVER
ATTAINMENT OF FORMAL CPD
CUSTOMER PERCEPTION
OPERATIONAL EFFICIENCIES
SUPPLIER PERFORMANCE
CAPITAL EQUIPMENT UTILIZATION
T =
PRODUCTION OUTPUT
DEBIT DAYS
CREDIT DAYS
OPEN & CLOSED
ACTUAL NUMBERS
NON-CONFORMANCE REPORTS
SALES GROWTH & MARGIN
SOME
TYPICAL
KPI'S
Glodratt EM, Cox J. The Goal, Gower Publishing Second Edition 1993. ISBN 0-566-07418- 4
Throughput =Invoiced Sales - Consumables
Number of Hours Worked
A Simple Measure
“A simple - live measure - on how your business is doing”
The higher “t” the more cash
you are making!
Copyright © Eur. Ing., Dr Lee E J Styger
the close
Copyright © Eur. Ing., Dr Lee E J Styger
Copyright © Eur. Ing., Dr Lee E J Styger
Adapted from Scott Adams
The 13 Great Management Lies YOUR INPUT
IS IMPORTANT TO US
OUR PEOPLE ARE THE BEST
WE'LL REVIEW YOUR
PERFORMANCE IN 6 MONTHS
I HAVEN'T HEARD ANY RUMORS
TRAINING IS A HIGH PRIORITY
WE DON'T SHOOT THE MESSENGER
PERFORMANCE WILL BE REWARDED
WE REWARD RISK TAKERS
THE FUTURE IS BRIGHT
WE'RE REORGANIZING
TO BETTER SERVE OUR CUSTOMERS
YOU COULD EARN MORE MONEY
UNDER THE NEW PLAN
I HAVE AN OPEN DOOR POLICY
EMPLOYEES ARE OUR
MOST VALUABLE ASSETS
THE 13
GREAT MANAGEMENT LIES
If you are still wondering why you are
running your own business..
remember these
On Direction
“It doesn’t matter how slowly you go as long as you do not stop”
Confucius
Copyright © Eur. Ing., Dr Lee E J Styger
Copyright © Eur. Ing., Dr Lee E J Styger
The Business Tips
SENCE OF HUMOR
OBJECTIVITY
PROFESSIONALISM
INTEGRITY
MAINTAIN
BELIEF IN THE PRODUCT
YOUR FAITH
KEEP
HUNT YOUR GOALS
REWARDS
DELIVERY
TIMES
SET GOALS
YOU ARE A BUSINESS
TIME
MANAGE
DELIGHT ALWAYS
OVER DELIVER
UNDER PROMISE
CUSTOMER EXPECTATIONS
MANAGE
DO NOT SET LIMITS
INCENTIVIZE THEM
MOTIVATE
YOUR PEOPLE
MANAGE
VERY CLOSELY
CLOSELY
CASHFLOW
MANAGE
TELL YOUR MARKET
TELL YOUR WORLD
WHAT
YOU DOTELL THE WORLD
SELL SELL SELL
& BE DIFFERENT
WHAT MAKES YOU DIFFERENT
DECIDE
& FOCUS ON THEM
EXPOSE
YOURSELF
RELENTLESSLY
WHO ARE YOUR CUSTOMERS
DECIDE
& DO IT
WHAT YOU DO
DECIDE
KEY POINTS
thank you for your time
www.connect2.biz
Copyright © Eur. Ing., Dr Lee E J Styger