Time Management Solutions Newsletter – August 2009

 
                                      In This Issue                                   

(Time to read entire document 20 minutes)

 

This Month’s Funny

 

 

 

"Debt is like any other trap,
easy enough to get into,
but hard enough to get out of."
Henry Wheeler Shaw

www.businesssupport.co.nz

 
Welcome to Time Management Solutions August 2009 eNews.
Welcome to Time Management Solutions

Hi Business Owner,

A few months ago we provided some help when it was asked and considered the case closed. However, this month I have been on the receiving end when someone whom we'd helped referred some of his respected clients - in other areas of NZ - to me as a potential coaching clients!

Kindness creates magical journies and the incident left me with a few pearls that I'd like to share with you.

  1. Positive actions tend to provoke others. We did a favour and it was immediately returned to the benefit of other people - and the ripple probably hasn't stopped yet!

  2. Referrals save time because the referrer has already perceived a match between the needs and capabilities of two parties and so the likelihood of a positive outcome for all is high.

  3. Technology has dissolved the geographical boundaries for many businesses - and will progressively dissolve ideological boundaries for us all. (Skype Video, emails and fax)

  4. Distance is no bar when it comes to liking someone you've yet to meet in the flesh.

         Enjoy!

 Regards 

Andrea Krsinic

 

 

RIBI Powered by ProfiTune Business Growth Specialist  

 

Andrea Krsinic

Business Growth Specialist

+64 021 1893445

Phone /  Fax 03 4489096
 

 

The Dilemma in Buying New Business Equipment

(Time to read this article: 5 mins)

When it comes to acquiring new equipment for your business, do you use your own money or do you use the bank's via an operating lease (rental agreement), a chattel mortgage, hire purchase, time payment? What's smart?

Scenario

Let's say you’ve had a rough year, and the profit and loss is not looking too bright, but that you need – or can capitalise on – adding a new piece of equipment to your business right now.  As we’ve noted in recent articles, the banks have a much reduced appetite for exposure to small business risk right now and can be found asking for the level of security you would expect from a wage earner borrowing for an investment property – but at about twice the property loan interest rate!  

 

Do you go without?  Do you beg?  Do you put your home up as security? 

Let’s say that you began Coaching with us 3 months ago, have turned the profit corner and have now built up a bank of $100,000 in cash, that you have loans from the last 18 horror months that you’re tempted to pay down and a $750,000 mortgage on your $1m business premises, but that you have your eye on a new piece of equipment at $82,500 that could add significantly to competitive edge, but are finding a less-than-helpful reception from your bankers.

What do you do?

As a general rule it’s smart to conserve your own cash and to use the bank's money to finance equipment over the term during which it is intended to earn an income (sort of like paying wages to a good worker who will make you more each month than you're paying them).

However, when you strike a combination of strong cashflow and low deposit interest rates as we have right now, it pays to widen your assessment to include a couple of other scenarios, not the least of which is that of exploiting the unique bargaining ability that cash provides when buying for products that may not be selling strongly elsewhere.

Calculations

·         On the cash on deposit in your bank account, the bank is likely to be paying you around 3%-5.5% (see www.interest.co.nz  
              for current  rates).

·         On the property mortgage you’re likely to be paying the bank around the 6% mark.

·         On a business overdraft you’ll be paying the bank between 8% and 11% (the majors can be charging 50% over the second
          tier lenders).

·         On a fully drawn equipment loan you pay around 14%, but let’s say 12% for this exercise (at the time of writing 14.5%
          was Marac's current plant and equipment loan,)

·         Using an offset account for your cash on hand would effectively earn you 6% (if offset against your mortgage interest); 
          8.5% against a business loan; 11% against an overdraft; and, if used to purchase equipment outright instead using asset 
          finance, anything from 12% to 15%.

·         If you are not off-setting your cash on hand on a daily basis, then it may be earning you 3%-4.5% (though in this era it’s 
          not unusual for banks to pay nothing or very little on business deposits). So, you are effectively “losing” 8% to 12% in 
          interest earnings (or excessive interest costs, depending on how you look at it).

·         To any equipment finance arrangement add an establishment fee ($400) and a monthly account fee ($7.00) which, over a 
          5 year term total $420 or, on an $82,500 purchase, adds another 0.5% to the cost of the money - ie, it adds 0.5% to the 
          real interest rate).

·         Then there are factors such as Director’s Personal Guarantees, and the impact of liabilities or on-going cash-drain for 
          purchases on your future borrowing capacity.

Using Cash

So, let’s look at actually how using your own cash to buy the equipment offers you the potential save up to 50% of its cost!

We don’t have space for that here, but if you click through to our website we outline, step by step, how to negotiate the deal of a lifetime.  Print from the webpage and you’ll have it all.

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Time Management for Salespeople

     (Time to read this article: 6.5 mins)

Many of those charged with bringing in the bacon – of initiating and concluding sales for the business, particularly in an out-bound role – live in an extremely fluid environment.  They don’t know from one day to the next to whom they’ll be talking; what opportunities will surprise them; and in some case, they don’t even know what part of the country - or the world - they’ll be in tomorrow!   

While this fact often provides their greatest satisfaction from their role – it feels like freedom, they get to use their initiative, and it’s continuously stimulating – it also hides their greatest challenge, that of organising their time so that they are not only highly stimulated, but also highly productive.  

In fact, if you ask us, we’ll tell you that the greatest performance challenge for an outbound salesperson is mastering time management or – more accurately – self management with respect to Time.  

 

 

So just how can you manage a fluid and largely reactive environment that is shaped by opportunity; or the outcome of a chance conversation, article or referral; or by a rapidly evolving market environment?  

The answer is obvious (at least after thirty-something years of studying the problem, it is to us):  You:  

  • Put flexible structure around the salesperson;

  • Provide systematic support for their use of time; and 

  • Encourage routine and system around the predictable and recurring parts of their role so that they are completed efficiently enough to;

  • Leave large chunks of time free for productive selling activities. 

In short, you provide them with training in and access to a Salesperson’s Time Management System.

A Sales Time Management System

The essential elements in any effective Sales Time Management System (STMS) are:  

1.      Goals.  If firm, quantified and dated goals have not been negotiated with each member of the sales team and the team as a whole, 
         then the horse has fallen at the first hurdle! 

2.      Focus. If the sales leader is not focusing and refocusing their team on their daily, weekly and monthly goals, progress to date, and 
         distance to travel then, again, underperformance is guaranteed.  The STMS must incorporate a clear statement of goals in a visible 
         spot, up front.

3.      Planning.  Facing a new sales day that promises endless possibilities requires you to select carefully those possibilities that you can 
         actually fit into the day.  That implies at base, listing tasks, estimating the time required for each, then measuring that against the 
         total time available, and moving items that don’t fit.  Miss the list, and you more than halve sales productivity – but they’ll sure feel 
         busy without it.

4.      Reality Check.  No salesperson’s day goes as planned - unless nothing happens, that is!  So a key component of an STMS is the 
         allowance of sufficient unplanned time in each day to manage new developments.  Omit this step and you miss leads, buying signals, 
         opportunities – and sales.

5.      Priorities.  In the absence of clear priorities, everything looks urgent!  A clear focus on the need to bake a loaf of bread before 
         sundown is what makes the wheat a priority over the chaff.   So, for every salesperson, their daily tasks must contain clearly    
         identified priorities.

6.      Tracking.  If a salesperson can’t track their use of time, then it’s likely they are wandering; they are doing less of what matters and 
         more of what doesn’t; and they have no way of then backtracking to correct the process. 

7.      Capture.  If a salesperson is not equipped to capture in the instant the enquiries, tips, referrals, hints or intuitive flashes that form a 
         normal part of their day, then they suffer the Salesperson’s Paradox:  They will feel overwhelmed by the cascade of events and 
         overworked by jumping from one task to another, even while under-performing in terms of bankable results.  Capturing the 
         opportunities in the moment, confident that they can and will come back to them shortly, enables them to remain focused on – and 
         complete – the task of the moment.

8.      Review.  Keep doing the same thing while expecting a different result is (you know it) “one definition of insanity”, so a great 
         salesperson will automatically and routinely review their performance, learn from it, and change their behaviour as required. Omitting 
         this and the first two steps from your STMS heightens the risk of endless and vigorous activity - without results!   

 

Leading Salespeople

In the ProfiTune world, the first two and the last steps, while the responsibility of each salesperson, also fall into the province of the sales leader, and an effective STMS provides the leader with a quickly assessable form of field data on which to base their assessment, feedback and performance coaching to each individual team member.  

Whether privately or as a group, this review, assessment, feedback and improvement function is an essential element to sales performance improvement and that implies that sales leaders will conduct structured and effective meeting with their sales teams on a regular basis.

A simple meeting regime may consist of:  

1.      Preliminary review of the STMS sheets of each team member.

2.      Assembly of a short agenda of common issues.

3.      A 5-minute daily “stand up” sales meeting which covers:

a.      Our goal for the month.

b.      Our score to date.

c.      The distance to run to our goal, broken down into so much per day, per person.

d.      Any new opportunities

e.      A recommitment to achieving the day’s goals

f.       Positive reinforcement (salespeople run on positive reinforcement mixed with a tinge of urgency).

4.      A 1 hour weekly review – similar agenda to daily.

5.      A 2-4 hour monthly review, assessment, recognition and reward, followed by setting the new month’s goals.

All of this is made so much easier if the team’s salespeople are individually organised around an effective Sales Time Management System that support the sales leader in gaining quick and accurate insights into the behaviours that are key to sales success.  

ProfiTune offer both a Sales Time Management System and the training and support to both team members and sales leader in the form of training, systems induction and sales performance group coaching to make it all work.  For help please email us.  

If you are responsible for a sales team you may find this past article useful: “Salespeople: What Works? Commission or Retainer?”

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Numeracy - An Essential Business Skill

           (Time to read this article: 5 mins)

If numbers is the language of business, then ledgers contain the memories of what happened; your balance sheet is your scoreboard, and your profit the pulse of your business.  

Our Vision is to be recognised as having the world’s most effective systems for coaching business clients to success and one of the first things we establish before coaching with anyone is the story that their numbers have to tell.  After 20 years in business and 6 years in coaching, the knowledge of just how few business people can read - and understand – the story that their accounts are telling, still frightens us.

Profit & Loss, and Balance Sheet

Over the years we’ve encountered plenty of business owners who think that their Profit & Loss Statement and their Balance Sheet are lies that their clever accountant conjures up for the Tax Office, and when those accounts show a tax due of next to zero, they congratulate themselves on the result, oblivious to their true meaning which is that they did not make any money!  

Our goal is to have our clients paying the highest amount of tax at the lowest legal rate that can be structured for them.  Let’s face it, if you were to pay $200,000 in tax this year, and through the services of an excellent accountant had minimised your tax to an effective 20% of profit, you’d be puzzling over how to best invest (or spend) your $800,000 in after-tax profits!

Bookkeeping 101

Leaving aside the risk takers who choose to operate outside of the tax regime, a business’ Profit and Loss Statement and Balance Sheet represent an “hermetically sealed system” inside which all of the business’ money or value circulates.  In that system, money or value can neither disappear or appear – it may change form (from money owed to you by debtors to money in the bank when they pay you, for example), but it can’t become more or less of itself.  

Gross Profit

So, when we encounter a new client who feels that they’ve been trading profitably (though often they mean “busily”) but are experiencing cashflow problems, we check first to make sure the profit is real.  We often see high sales volumes but Gross Profit Margins that are so low in terms of industry benchmarks that there is no way they will yield a profit after overheads, interest, depreciation and amortisation items.

Net Profit

Next comes an examination of expenses to see where there may be leakages.  Common culprits here are small increases in a hundred “little things” which together add up to a small fortune ‘leaking’ out of the business.  Comparison with the previous year’s figures and, if available, industry benchmarks, often tell an interesting story.  With knowledge comes the power to change, and tuning expenses for a better bottom line is usually relatively easy. 

With the profit now quantified and certified, we then go looking for “lost cash” in the only place it can now be – in their Balance Sheet. 

Balance Sheet

Real profits may now be sitting in the form of:  

·       excess stock (without controls, stock tends to increase when trading is brisk)

·       higher debtors’ balances (again, brisk trade, more accounts and, sometimes, less vigilance)

·       drawings by or dividends to shareholders (took some of their capital out of the business)

·       reduced overdraft or loans (the money went back into the bank)

·       capital improvements to property (turning the asset money into an asset building)

·       lower creditor balances (you may have caught up on overdue accounts you owed)  

Aged Debtor and Creditor Balances are always worth a few minutes analysis, particularly if you can look at changes over time.  Warning signs here are a severe imbalance between the totals owed to (by debtors) and owed by (to creditors) the Company. 

Debtors & Creditors

One 5 minute inspection of a new $9m pa client recently showed a 2.5: ratio between what was owed to the company by Debtors and what it owed to its Creditors.  It was effectively lending $1M continuously to its Customers who had obviously become used to (if not dependent upon) their generous trading terms.  Cost to our client?  Around $10,000 a month in interest on their own overdraft which, if Debtors were pulled within terms, could have been paid down to zero.  

The bottom line here?  (That was probably an intentional pun!)  Learn to read the story of your business or suffer the pain of ignorance.  

In this context I’m reminded of a saying by a friend, Christopher Howard, one of the world’s great public educators:  You pay for your education only once, but you pay for ignorance time and time again.  

If you’d like some help in becoming a little better at reading between the lines of your accounts, then please contact us for a chat about how we can assist.

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Free electronic tax calendar for small businesses in Australia

     (Time to read this article: 1 mins)

 

A free electronic calendar is now available on the Australian Tax Office website to help small businesses meet their tax and superannuation guarantee obligations throughout the year.  The Tax Commissioner, Michael D’Ascenzo, said the small business tax calendar provides reminders of lodgement due dates for small businesses, bookkeepers and tax agents. Mr D’Ascenzo said that “based on your individual circumstances, the calendar records all the due dates you need for the financial year, such as when to lodge your business activity statement and when to pay your employees’ superannuation.”

Small businesses and organisations can also record notes and reminders, such as appointments or payment due dates; update the calendar at any time if their business structure or reporting obligations change, and print a one-page yearly planner for tax and superannuation obligations and due dates.  

The latest version of the tax calendar is now available and copies can be downloaded for up-to-date information for lodgement and payment due dates. To download a free copy of the tax calendar, visit the Tax Office website at www.ato.gov.au/TaxCalendar. The calendar is also available on CD by calling 13 72 26.  

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Solving the People Puzzle

(Time to read this item:   3.5 min)

Why are so few employees team players? Why is it, that one person in five is actively sabotaging the average business? Why do three in five do the absolute minimum that it takes not to get fired? What does it take to motivate some people?

Are your people the problem - or could it be you?

Maybe it's just a case of finding the right people? They are out there - but research shows they could be as few as 20% of the labour market. How do you identify them? Better: How do you attract them to you?

Imagine what it would be like if you could harness the ability, intelligence and talent of every person on your team, and direct them laser-like, towards achieving your goals and the Vision for your business.

ProfiTune is presented with these same questions, these same challenges by audience after audience, client after client, and we solve them. Up until now, we've solved them one by one through coaching. Now we offer the solutions we have developed in the form of a book: Solving the People Puzzle.

When you solve your people puzzle you'll find you can have it all: A brilliant, motivated team; a positive, uplifting and harmonious workplace; huge productivity; capability to deliver world's-best products and services; growing profits; and the deep, deep satisfaction that comes from knowing you're now on the right path.

Want it all? Start here by ordering your advance copy of Solving the People Puzzle.

WIIFM? (What's In It For Me?)

Reading this book you'll learn:

  1. Why, when your people are clear on the values in your business, they don't need rules to handle new and challenging situations perfectly.

  2. The real purpose of your Vision and Mission statements, and why getting them right is the second item on any leader's Job Description.

  3. Why attracting the right people, is actually easier to achieve than finding them, and what you have to do for the right people to find you.

  4. There is a real-life Matrix in every workplace which, until you crack the code and understand it, will frustrate every attempt you make towards improved people performance.

  5. The real-world secrets to motivating half the people on the labour market; the reasons why the other half can't and won't be motivated by you; and how to tell the difference between them.

Advance Copy Deal - Invest $39.95, Save $158.90

Reserve your advance copy(s) of Solving the People Puzzle now and receive:

  1. One sneak preview of a Chapter emailed to you immediately upon order placement.

  2. One eBook copy immediately upon release (1 November 2009; valued at $19.95).

  3. One  autographed printed copy of Solving the People Puzzle February 15, 2010 (value $29.95).

  4. Complimentary invitation to the first post-launch Webinar facilitated by the author (Peter Rowe) (Value $99).

  5. Free postage anywhere in Australia (value $10.00) or $10 postage anywhere in the world.

$188.85 of value for just $39.95. Restricted to first 250 clients (our newsletter circulation is 5,000+).

Reserve your Advance Copy Deal now.

     

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On the Lighter side 

(Time to read this article: 1 minute)

We apologise in advance for this one- the editor would not be told!

Recently a thief in Paris nearly got away with stealing several paintings from the Louvre.  However, after planning the crime down to the smallest detail, entering without detection, bypassing sophisticated security, lifting the artworks, and escaping cleanly he was captured by traffic police who encountered him only 2 blocks away when his Econoline van ran out of gas.

When asked how he could mastermind such a crime and then make such a basic error as not fuelling his van, he replied, "I had no Monet to buy Degas to make the Van Gogh."

Ba boom!

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Thoughts on the Subject of Time Management

"Time is a great healer, but a poor beautician." - Lucille S. Harper

"Be mindful of how you approach time. Watching the clock is not the same as watching the sun rise." - Sophia Bedford-Pierce

"Living your life without a plan is like watching television with someone else holding the remote control." - Peter Turla

“Most males underestimate the amount of time required for small tasks (5 minutes jobs usually take 20 minutes) and overestimate the time required for major tasks (so they keep putting them off until they have a clear day in which to do them).”  Peter Rowe.

"The bad news is time flies. The good news is you're the pilot." - Michael

"All the flowers of all of the tomorrows are in the seeds of today."- Chinese Proverb

"You can't catch one hog when you're chasing two."  - Moe Schaffer

"There is more to life than increasing its speed."- Mohandas K. Gandhi

"You must get good at one of two things. Planting in the spring or begging in the fall."- Jim Rohn

"Crash programs fail because they are based on the theory that, with nine women pregnant, you can get a baby a month." - Wernher von Braun

"Time is a great teacher, but unfortunately it kills all its pupils." - Hector Louis

 

Brevity Brief

 

"We read and recommend The Brevity Brief. If you're serious about keeping up to date with business ideas, but have limited available time you can download the mp3 and listen while you drive.

 

The Brevity Brief adds value to your business through analysing a business book, then giving you insights and recommending action items you can deploy in your business.

 

For a free sample go here. Try it"

  

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The material in this edition of our Newsletter is © 2003-2009 ProfiTune Business Systems Pty Ltd
and used under license by Time Management Solutions.”

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Andrea Krsinic
T: 03 4489096 F: 03 4489096    M: 021 189 3445   E: info@businesssupport.co.nz
7 Ventry Street,  Alexandra,  9320  New Zealand