During turbulent times, companies do more with less. For your business to develop winning ways during these challenging times, benchmarking is a very effective way of staying ahead of your competitors.
Benchmarking takes financial figures from your accounting system and converts them into ratios, which allows you to compare your results to those of your competitors. These figures are usually expressed as a percentage of sales or profits, before abnormal items are taken into account.
Benchmarking is working ‘on’ your business rather than ‘in’ your business.
So this week’s tip is all about improving your cash flow through effective stock control.
Here are 5 areas to examine in your business:
Stock levels – do you have a system, such as MYOB with inventory processing, for recording your stock movements, in and out? Do you review your stock levels and stock turnover on a regular and on-going basis?
Incorrect stock – have you got the right products that meet your customers needs? Do you get regular feedback from your customers?
Warehousing – do you have a large storage space where you are paying rent, that is not needed, when your suppliers are able to deliver in a short turnaround time? Keep your money in the bank not on your shelves.
Delivery – Are you regularly reviewing your own and your suppliers cost and method of delivery of your product and /or service?
Shrinkage – Are you measuring your shrinkage, and reviewing ways to reduce this? Are you aware that staff is the main reason for shrinkage?
Over the next 3 weeks, we will continue to look at benchmarking your business and continue examining the various departments within your small or medium-sized business. Additional factors such as finance, planning and management and how they impact on your cash flow.
Reference: Bright Ideas for Small Businesses – how to get your Cash Flowing efficiently, Charisse Gray, 2009.
"Just a short note to tell you how we are travelling; We have had our busiest ever summer. This month we took over $100,000 plus accounts. The number sounds good, but more to the point our GP (Gross Profit) is up where it should be.Our accountant rang last week, (shriek), he has just completed last years tax for us. His words were along the line of ”of all the businesses he deals with, he has never seen a business turn around like ours”. Neridah and I attribute this to your time and persistence with us. Thank you." - Trevor and Neridah Cains, Murwillumbah Mowers & Chainsaws.
"Phil, I want to thank you and convey my gratitude for the excellent standard of professional development and service that you have afforded to my staff and me over the past 8 years. The professional Executive Coaching that you have provided to me has been instrumental in both my personal and professional development and I can say without hesitation that your contributions have greatly shaped and aided my achievements of the organisations that I have worked for. The introduction of the PINNACLE’s professional services has certainly provided a strong return on investment and this has led to a positive flow-on effect in relation to the quality of our services." - John Jensen, Executive General Manager, Community Services at House With No Steps
"Whether Phil is providing Executive Coaching to senior managers, facilitating team or leadership development, Phil demonstrates the highest standards of professionalism in his approach, delivery and follow through of the individual projects. Hs ability to deliver an individually tailored solution to any business challenge we presented him with has been an asset to our organisation. He was able to develop a unique understanding of the project brief and deliver a professional outcome that often exceeded our expectations. As a leader of an organisation employing approximately 400 staff and caring for over 700 clients I benefited greatly from his expert and professional guidance." - Anne Leeson, Regional Director, UnitingCare Ageing – North Coast Region
"Phil facilitated the design and development of our strategic business plan with our management team to take us out of the small business syndrome into a medium business mentality. With Phil facilitating the process it ensured a quality process as he kept our business planning team on track and provided clear direction. Phil provided a very much needed sounding board as his past experiences allowed him to look at the issues pragmatically, making our team look at real issues both from left of field and right in front of us, that are often too easily missed." - Matthew Denehy, Managing Director, Eagle Insurance Brokers
"Since I have been working with Phil, I have set actions with time frames in place for everything I do in my business...he holds me accountable for them, and I have learnt so much and grown so much as a result of this. I now feel in control of my business and feel confident I can succeed with growing my business and opening another store." - Sarah, Surf wear fashion retailer.
"Enlightening and Empowering. I have learnt that I know a very small portion of what I need to know and that this is the biggest threat to my financial security.... that business isn’t rocket science and the answers to any difficulties are readily available if you are wise enough to listen and brave enough to re-invent yourself, with the assistance of your coach. Thanks Phil." - Tania, Retail Music Store Owner
"Phil’s input and support as an external consultant with NORTEC since 2010, has ranged from extended individual executive coaching assignments; team based executive leadership development programs; panel involvement in recruitment and selection processes to broad based organisational development initiatives. The diversity of these assignments for NORTEC is testament to both his effectiveness and broad base of knowledge and experience he offers his clients. Phil’s structured and accountable approach, combined with his highly effective facilitation skills and contemporary management knowledge, ensures clarity in terms of respective accountabilities in the client : consultant relationship and realisation of tangible return-on-investment and value for his clients." - Paul Bennett, Chief Executive Officer, NORTEC Employment and Training Ltd.