Business Advice - Discounting

Don’t Discount Your Way to Disaster

There is always the temptation to reduce prices when sales are a bit sluggish. It is one of the most over used marketing strategies around, and it can be a recipe for disaster. What many people don’t understand is the volume of sales that is required to recoup the discount given away.

Here are some statistics that may surprise you. If your present gross profit is 20% and you cut your prices by 10%, you will need to increase your sales by 100% just to break even on the discount. It is even worse the lower your gross margin. If we use a gross margin of 15%, you will need to increase your sales by a staggering 200% to break even.

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Customer Experience - Business Coach

Customer Experience – Be Careful What You Create

I have just spent the last year or so working with a large retailer. The retailer struggled to get good customer and staff engagement. Often leaving both parties unsatisfied.

The company had strong procedures, paid well and had developed a good customer offering in the last 12 months. Yet Head Office management could not understand why they were not making in-roads on their major competitors.

One problem was the inconsistent application of process. For example the company had a robust returns policy which was over and above the legal requirements. It was a simple process that could be followed by all staff so what could go wrong! Customers with a problem could return to store and follow the process, simple, product was replaced, repaired or not accepted depending on the circumstance.

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Business Tips - Business Advice

7 Tips for Business Success

Running a great small business is not easy and the failure rate is too high. These businesses fail for several reasons but it often because the owners have not thought through what they want out of the business and how they want it to operate. In the end the business is running them around, rather than them running the business. As a business coach I often get asked what the key things are required to be successful in business. While there is no silver bullet, I believe you need the following:

  1. A business plan.

This does not need to be a book that sits on the shelf gathering dust, a simple plan on a page in most cases will be enough. Without a plan you have no path to the future.

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Business Advice - Franchising vs Licensing

Franchising vs Licensing

What is the difference between Franchising and Licensing?

This is a very good question and one I get asked often. Many peoples are genuinely confused about the terms franchising and licensing and often use them interchangeably.

Business owners tell me that they want to license their business rather than franchise it, believing that licensing has much of the same advantages as franchising but without the costs and regulations. Unfortunately, this belief is wrong on many levels. So, to help dispel the myths here is a summary of the facts:

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Business Coaching Sydney - Dashboard Reporting

Dashboard Reporting

Every business owner and manager will benefit from implementing processes that provide information on business performance that can be easily evaluated to identify areas of improvement, risks and trends. One method of providing such information is dashboard reporting.

Like a car dashboard, the objective of dashboard reporting is to provide clear and concise information of the key drivers of business performance. Dashboard reporting should be a synopsis of business operations and provide information in a visual format that is easy to read, remembered and understood by key decision makers in the business. This should in turn improve decision making.

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Business Coaching Sydney - Review Finance

Why You Should Review Your Financial Performance Regularly

In my travels I continually come across people who have little or no understanding of how their business is performing financially. There sole aim is to get paid and have money in the bank. They may (or may not) know the sales numbers but they don’t know their overall profitability or which of their customers are making (or losing) them money. They rely on their accountants to crunch the numbers but really the accountant is simply producing the BAS and doing the year-end tax return.

In my view every business should be producing a simple profit & loss each month to track how they are performing. It will highlight many areas of improvement that simply looking at your bank balance won’t do. For example, poor payers (you haven’t sold anything until it is paid for) work in progress (work not yet billed) or too much inventory (tying up your valuable cash). Expenses too high. It will also highlight if you are making money or not and (hopefully) motivate you to address these problems.

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