E.O.W (End of the Week) Notable Tip: Unprofitable Factors in the industry

Happy Friday!

I hope you’ve had a great week.

Today, I want to discuss unprofitable activities/factors that your company may be utilizing a great deal of resources on.

“By understanding your customer’s priorities you are able to shift resources to activities that drive value and profitability, in turn, eliminating those factors that yield no profits and realizing opportunities to create new factors that have not been offered before. It is critical that your accounting team is aware of the activities and customers that offer the most profit by creating and maintaining a Customer P&L sheet. “

 

As always, “Success is continuous improvement!”

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Maintaining Integrity during rapid growth

What is integrity? According to dictionary.com, integrity is “adherence to moral and ethical principles; soundness of moral character; honesty.” Why is it important in business? Integrity in business is important because it builds internal and external trust amongst all the people that have dealings with the company.

Effective leaders “walk the talk”; in other words they do what they say. It is imperative that during the early stages of a startup that codes of conduct be established that convey how business will be done and how employees, clients and suppliers will be treated. Companies that have great cultures are avid believers of collaboration. They encourage employees to share ideas and work together to solve problems.

“Two heads are better than one but 7 heads are even better”

When your company is impacted by rapid growth it is often found that you lose touch with your employees, reaching targets takes priority instead of optimizing client satisfaction, and company values may become diluted as employees may start to do anything necessary to keep their jobs. Effective leaders implement department headcount caps of 170 or less, discuss company values, mission and strategy daily, and have employee-centric cultures.

For example, an automotive air bag manufacturer, Takata, wanted to cut costs so they opted for a cheaper material which resulted in a mass recall. Evidently, they increased their losses by not maintaining integrity in their product. There are many other ways to cut cost but keep quality and this showed their lack of consideration for their customers. They were more concerned about their bottom line. It is going to take a long time for them to build trust with those customers that they lost because of their poor judgment and poor ethics.

Nevertheless, it is important that leaders ensure that their employees understand and never stray from the company’s core values by discussing this matter daily. Customer satisfaction, internal and external respect amongst employees, clients and suppliers, and collaboration are the key factors that make for an enduring company. When employees trust their coworkers and leaders they work together as a team and protect the company from harm.

E.O.W(End of the Week) Notable Tip: Alternatives to Layoffs during business financial hardships

Happy Friday!

I hope you’ve had a great week.

Today, I would like to discuss some alternatives to reducing costs during business financial hardships instead of mass layoffs. Strong and effective leaders build trust in their companies and see their employees as their second family sometimes even as an extension of their family. When employees become aware of financial troubles in the company their stress levels go higher than usual, their health may become impaired, and productivity is also affected. Laying off a plethora of people causes employees to lose trust and loyalty to a company. When employees trust their leaders they are less likely to move on to greener pastures because security, trust, and opportunity is integrated into the culture offering a peace of mind.

“When faced with financial troubles in your business try to see ways to cut costs, require/offer unpaid vacations to employees (4-8 weeks), and integrate an evergreen employment policy that stipulates employees will not lose their jobs if the company is facing financial troubles (hire the right people through rigorous hiring practices to ensure they are worth keeping). “

Through an expenses analysis you can identify expenses that your company can live without and requiring employees to take 4-8 weeks of unpaid vacations during hard times can also free up cash as well. However, the unpaid vacation should not be forced and only those employees that can afford to take time off should take advantage of this. You can also offer employees the opportunity to work from home as this will reduce your electricity bill.

I hope you’ve enjoyed this E.O.W!

As always, “Success is continuous improvement.”

 

 

E.O.W (End of the Week) Notable Tip: Reducing defects in a product

Happy Friday!

I hope you’ve had a great week.

Today, I will leave you with a short tip on how to keep product costs and defects low.

“Whenever a faulty product/service reaches a customer, the costs associated with the error increase. Integrating preventative plans to detect and correct the nonconformity before the product/service is prepared to serve the customer is the least costly approach to providing a quality product or service.”

 

I hope you found this short tip useful! As always, “Success is continuous improvement!”

E.O.W(End of the Week) Notable Tip: Insurance

Happy Friday!

I hope you’ve had a great week.

Today I leave you with a short tip on how CFO’s can save money on business insurance.

“CFO’s can get better insurance deals by becoming involved and sharing with insurers balance sheet information, profit and loss, cash flow statements, credit ratings and cash reserves. In short, a business that has strong financial health is able to retain more risk.”

As always remember, “Success is continuous improvement.”

Strategic Customer Analysis

It is common practice to determine your target customer when developing a business. However, this tunnel vision buyer group mentality leaves money on the table for businesses. To truly optimize profit and revenue a company’s leadership must be well aware of the many buyer groups (purchasers, actual users, and influencers) that can offer opportunity to enter into a new market space with high profit potential.

For example, say you are leather shoe manufacturer who usually focuses on retailers as its main buyer group. Through analysis of your current, similar and alternative products coupled with identifying the pain points of using your product you can realize a low-cost profitable opportunity to reel in your end users; essentially entering into a new market space.

A more effective strategic customer analysis would require you to understand the following:

  • Why buyers choose to buy your product; aka purchase criteria
  • What are the factors that cause customers to become angry with your product or company
  • What are the factors that keep potential customers at bay (you must understand their priorities and create solutions to meet their needs)
  • The preferences of your customers
  • The decision making process of your customers
  • Customer behavior
  • Why they choose to buy at a certain time (holidays, birthday, graduation, et cetera)
  • Time, travel, hassle and money the customer is willing to pay for buying and using your product or service
  • What functional needs need to be met
  • purchasing power

Businesses must also understand what factors motivate buyers to purchase based on price or quality. However, it is imperative that you just focus on the buyer group that has the highest profit potential at a lower cost and your company’s capabilities are able to meet their priorities.

E.O.W (End of the Week) Notable Tip: Redesigning Business Models

Happy Friday!

I hope you’ve had a great week.

Today, I want to discuss business models. As we all know, changes in trends and customer behavior affects profit. Therefore, it is important that leaders stay abreast of trends that could affect their bottom-line and have solutions at the ready. They should also include non-customers into their value chain spectrum for the purpose of realizing profitable opportunities.

“Companies should redesign their business model every 4 to 5 years.”

 

I hope you’ve enjoyed this short tip and as always, “Success is continuous improvement.”

E.O.W (End of the Week) Notable Tip: Strategic Plan Performance

Happy Friday!

I hope you’ve had a great week.

Today, I want to end this week with key insights on strategic plan performance.

“Strategic plans should concentrate on critical success factors for the company, providing plans for closing the gaps between what the company is capable of doing versus what it needs to be able to do. Gap analysis is key to identifying areas for improving performance. Negative gaps require immediate corrective action to eliminate the root cause and improve performance toward the goal and narrow the gap. Positive gaps showing better than expected performance may encourage the company to take further action to enhance the gap. Lastly, it is critical to integrate a contingency plan in case of errors or significant changes in the market occur.”

 

As always, “Success is continuous improvement.”

 

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