Vantage Blog

21
Sep
2011

Time to get your Business Fit

Whilst we dodged a bullet in 2008 it appears the economy is yet again challenged by sluggish sales as customers – in B2B and B2C markets - keep their hands firmly in their pockets.


During the GFC many businesses took the opportunity to ‘right size’ and removed obvious costs, but almost all failed to leverage it to its fullest in terms of waste reduction. This continued volatility may be your last chance to prepare your business for this fast-moving tsunami of economic woe.  Cash is tightening, confidence is shaken and where to next is uncertain.

A review of overheads and operating costs is essential before the economy takes off again. Why put more business through an incapable system? You will not meet your profit and cash-flow budgets without such a review.

Here is a check list of opportunities. Tick the box next to the ones you have in your business and then estimate the annual cost/savings for each. What is your total? You should find the number is somewhere between 10% and 20% of your annual sales (depending on how hard you cut in the past).

Tick the boxes below

OPPORTUNITY

ESTIMATED VALUE

PRIORITY

 

1. Remove poor performing staff

 

 

 

2. Remove unprofitable customers

 

 

 

3. Remove waste in the sales and marketing process

 

 

 

4. Remove waste in the production process

 

 

 

5. Reduce overheads

 

 

 

6. Achieve or exceed budgets

 

 

 

7. Remove inefficient suppliers

 

 

 

8. Increase average sales/customer by 20%

 

 

 

9. Improve cash collection by 20%

 

 

 

10. Other please specify  

 

 



  You have less than 12 months to free up this cash. You will need all of it to fund your survival in this continued volatility. Already cash flow is tightening, business confidence is severely shaken, and you must take action now. Get some help as you will not make the time it needs. Your role is to make decisions, establish consequences, and deliver on your budgets. There is a cost benefit; the savings you make now will be there year after year.

The last question to ask yourself is, “what barriers are there that are stopping me from making a start on a waste reduction program”? Fix whatever issues come out of this thought process. Keep asking the question until all the barriers are dealt with and then just make a start. If you don’t start within the next week you probably won’t. If you do increased cash flow and reduced risk will be yours. 

But most importantly you will be able to take advantage  of the eventual rebound better than your competitors - a great position to be in!

For information on the Vantage Waste Reduction Program please click here.





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