The job role of business advisors is to help businesses improve their performance by looking into their existing problems and working upon the same by putting into place some definite changes that might turn out to be highly effective. Also, they help businesses decide what would be the best option for them. Business strategy advisors have an important role to play in all types of business.
It does not matter if your business is home based, small or medium-sized, or a large scale organization. When you are facing problems and do not know how to work your way out of them, it is always best to employ the services of business advisors who are both experienced and well versed.
Today, there are business advisors for every business. Right from family business advisors to small business advisors, there are service providers for all types of establishments. In fact, you also have them at international locations offering services to customers all over the world.
Business Advisors - Locating The Right Ones
There are many of them out there claiming to be the best, but you need to be sure that you are appointing the services of one who is actually the best possible. Business development advisors have become so important that every successful business in the world first consults them before taking any major decision.
If you are looking for some business advice, here are some ways to locate good, experienced advisors:
*Ask Around - Sometimes, just to ask around locally, take the advice of friends and family and research a little is the best and easiest thing to do. This could lead you to the perfect counselor for your business.
*Research - Do not just settle for the first business advisor that you come across. Look around and research a bit and do not shy away from putting in a bit of effort. It will definitely pay off once you find the best possible advisor for your establishment.
*Make The Most Of Free Consultations - Most of the professionals out there offer a consultation session or two for free so you can ask any question you may have and try and find out if the advisor you are with right now is the best choice possible or not.
The key to finding the right advisor for your business is to first and foremost know what your own requirements are. That is when you would know for sure what you need from your advisor and work towards finding one.
Looking Overseas - You Do Not Need To Settle For Local!
If you do not find a good enough business advisor in your own city, state or even country, you can always decide to look overseas. That is the best part about this! You do not need to confine yourself and stick to what you can find locally. There are various business advisors who offer their services internationally.
There are very good chances that your needs would be met by an advisor from an overseas location and when that happens, do not step away just because it might turn out to be a little more expensive than usual.
Business advisors can very well be just the thing your business needs to turn around completely and start being what you always wanted it to be. Look around, research and find a good advisor who would take care of all your business issues. It will be a good thing.
Thursday, September 16, 2010
Tuesday, September 14, 2010
Can a Business Consultant Make a Difference in Your Company's Success?
A business consultant has many roles and can help an old company re-new itself and find itself again; help founders start and develop a new venture or project; help to turn around a company fraught with problems; help a company identify new opportunities and markets; or help a company develop a business success plan.
A good business consultant has experience working in and with a broad range of businesses. An experienced business consultant has broad and narrow stroke experience and typically, twenty years or more of accumulated business experience. Having an MBA from a good business school isn't enough. The consultant must have solid real world experience with many types of companies to be an effective consultant.
So what does a business consultant do? First and foremost, a consultant gets to know and understand your business. As the business owner, you know more about your business than anyone else. For this reason, a good business consultant will take the time to learn from you, your department heads and key employees the ins and outs of your business.
The consultant then goes to work identifying problems and opportunities. Those may be certain problems and opportunities you point out to the consultant, but also a good consultant will have a process to identify problems and opportunities which a business owner has not identified. A consultant brings fresh eyes, fresh experience and an open mind to your business enterprise, providing a completely different perspective than that of someone who has been running the company for some time or someone looking to start a new venture.
A business consultant will then analyze this gathered information in order to provide solid solutions and plans for the future. Often business ownership is so focused on working "in" the business that short term and long term outlooks and strategies are overlooked and neglected. The consultant re-focuses a company's strategies in order to solve immediate problems, while taking advantage of future opportunities. Steps taken in a good consulting process include: learn about the business; identify problems; identify future opportunities; perform analysis; provide solutions through a concrete plan; listen to feedback and adjust the plan; and implement and track the plan.
The consultant considers all company input to develop a business plan that will be effective. The consultant listens to the opinions of the company's advisors (accountants, lawyers, bankers and other advisers). The consultant can use Delphi sessions and red teams which contain industry experts and competitive viewpoints. The consultant also listens carefully to the view points of the company's ownership, founders, board, top management and key employees. A final business plan is agreed upon and signed off on by the company with the consultant helping to implement, track and re-work the plan as necessary over time.
When an entrepreneur is thinking about starting up a new business, a business consultant can apply a start-up analysis to determine if it is a feasible opportunity, which includes: analyze and evaluate the opportunity; develop a business strategy and model; resource audit; acquiring and leveraging needed resources; venture deployment; and getting and distributing value.
When considering an existing business acquisition, a business consultant can employ an business analysis, such as: products and services analysis; management team appraisal; operational analysis; market position; competitive factors; SWOT analysis; analyze financials; valuations; and risk assessment.
A business consultant's derived value pays for itself. What you pay in fees for a good consultant will pale in comparison to the profitability the consultant's strategies will create. A business consultant is an investment in the future success of your company.
A good business consultant has experience working in and with a broad range of businesses. An experienced business consultant has broad and narrow stroke experience and typically, twenty years or more of accumulated business experience. Having an MBA from a good business school isn't enough. The consultant must have solid real world experience with many types of companies to be an effective consultant.
So what does a business consultant do? First and foremost, a consultant gets to know and understand your business. As the business owner, you know more about your business than anyone else. For this reason, a good business consultant will take the time to learn from you, your department heads and key employees the ins and outs of your business.
The consultant then goes to work identifying problems and opportunities. Those may be certain problems and opportunities you point out to the consultant, but also a good consultant will have a process to identify problems and opportunities which a business owner has not identified. A consultant brings fresh eyes, fresh experience and an open mind to your business enterprise, providing a completely different perspective than that of someone who has been running the company for some time or someone looking to start a new venture.
A business consultant will then analyze this gathered information in order to provide solid solutions and plans for the future. Often business ownership is so focused on working "in" the business that short term and long term outlooks and strategies are overlooked and neglected. The consultant re-focuses a company's strategies in order to solve immediate problems, while taking advantage of future opportunities. Steps taken in a good consulting process include: learn about the business; identify problems; identify future opportunities; perform analysis; provide solutions through a concrete plan; listen to feedback and adjust the plan; and implement and track the plan.
The consultant considers all company input to develop a business plan that will be effective. The consultant listens to the opinions of the company's advisors (accountants, lawyers, bankers and other advisers). The consultant can use Delphi sessions and red teams which contain industry experts and competitive viewpoints. The consultant also listens carefully to the view points of the company's ownership, founders, board, top management and key employees. A final business plan is agreed upon and signed off on by the company with the consultant helping to implement, track and re-work the plan as necessary over time.
When an entrepreneur is thinking about starting up a new business, a business consultant can apply a start-up analysis to determine if it is a feasible opportunity, which includes: analyze and evaluate the opportunity; develop a business strategy and model; resource audit; acquiring and leveraging needed resources; venture deployment; and getting and distributing value.
When considering an existing business acquisition, a business consultant can employ an business analysis, such as: products and services analysis; management team appraisal; operational analysis; market position; competitive factors; SWOT analysis; analyze financials; valuations; and risk assessment.
A business consultant's derived value pays for itself. What you pay in fees for a good consultant will pale in comparison to the profitability the consultant's strategies will create. A business consultant is an investment in the future success of your company.
Monday, September 13, 2010
Funding an MBI/MBO With Loans
Funding an acquisition or an MBO/MBI is a large subject but in essence there are four main sources of money to consider. The two main sources are commercial debt by way of borrowing against the assets being purchased and equity, which will come from a mixture of a venture capitalist (VC) who is backing the purchasing team, or the director's own equity raised for example against personal property. There are also grants and soft loans, which are of particular relevance in development areas, and vendor finance by way of deferred payment terms or an earn out of the seller's interest.
It is important to remember that the funding sought needs to cover not only the purchase price including clearance of any debt to be satisfied as part of the deal, but also the working capital required to trade the business after completion, and any investment required to develop or restructure the business after the purchase. After all, it is no good buying the business only to find that you do not have the cash with which to run it. You therefore need to work closely with your advisers and make sure your forecasts are robust and that you raise sufficient funding to see the business through all the contingencies you can envisage, while also ensuring you comply with the legal requirements of borrowing against a business's assets.
Money raised by way of loans against assets will comprise a 'structured finance' package of borrowings against property by way of commercial mortgage, (or bridging loan if a transaction needs to be carried out quickly) or sale and leaseback, plant and machinery by way of sale and leaseback, and debtors and sometimes stock by way of a factoring or invoice discounting facility.
Providers of this type of debt funding include the banks, which will have a range of financing products, and don't forget that you will need a trading bank account anyway but banks are however unlikely to want to fund such deals by way of overdraft facilities.
'Structured' or 'Package' lenders, are invoice discounters who are also able to offer financing against property and/or plant and machinery, as well as in some cases stock. While such funders are key to many successful MBO/MBIs, some limit their overall exposure in any deal to a certain percentage of debtors, such as 150% of the debtor book, which can limit the ability to raise funds from other assets.
There are also stand alone independent specialist funders, which focus on providing finance against any one particular class of asset, such as a factor or invoice discounter to cover debtors, a building society to lend on the property, and an asset financier to cover the plant and machinery. Use of such funders in whole or in part in combination with a package lender can provide greater financing or 'headroom' than use of a package funder alone which can be important in some cases.
Where you own commercial property, generally 70% of the open market value (OMV) can be raised through a mortgage (or by using a bridging loan if funding is required quickly or where the transaction does not fit mainstream lending criteria), while 100% of OMV can be obtained (or more where valuations have been conservative) by way of a sale and leaseback, reducing the requirement to fund part of the property out of equity.
Where a business has significant plant and machinery, 70% to 100% of its value can be raised by a 3to 5 year sale and leaseback arrangement.
An advance of up to 85% of the available debtor book, which is to say those debtors of the right type, under 90 days old, up to credit limits and so on, should be available. Some funders will also take account of finished goods stock by way of an increased level of draw down against debtors, sometimes in excess of 100%.
Your professional advisors or brokers should be able to pull together an appropriate package of funding from these types of sources for your transaction. The key information they will need to establish how much debt funding can be obtained for an acquisition are details of:
* The deal, the type of sale, a share purchase or business and assets, the purchase price, the expected working capital requirements following sale and the funds coming in from other sources by way of equity from a VC or the buying team, grants or vendor financing by way of deferred consideration or an earn out.
* The business, which sector it is in, its trading history and performance including the last three years accounts, its forecasts with underlying assumptions and details of any turnaround plan if it is in difficulty.
* The management team including CVs and statements showing their net worth.
* Valuation and description of any freehold or leasehold property and details of any environmental or contamination issues.
* Valuations, or if not, an asset listing with sufficient information regarding machinery make, model, age and condition to allow a desktop valuation, of all plant and machinery together with outstanding HP and lease liabilities.
Aged debtor lists, aged creditor lists and a package of sample sales order, delivery and invoicing documentation, as well as finished goods listings.
It is important to remember that the funding sought needs to cover not only the purchase price including clearance of any debt to be satisfied as part of the deal, but also the working capital required to trade the business after completion, and any investment required to develop or restructure the business after the purchase. After all, it is no good buying the business only to find that you do not have the cash with which to run it. You therefore need to work closely with your advisers and make sure your forecasts are robust and that you raise sufficient funding to see the business through all the contingencies you can envisage, while also ensuring you comply with the legal requirements of borrowing against a business's assets.
Money raised by way of loans against assets will comprise a 'structured finance' package of borrowings against property by way of commercial mortgage, (or bridging loan if a transaction needs to be carried out quickly) or sale and leaseback, plant and machinery by way of sale and leaseback, and debtors and sometimes stock by way of a factoring or invoice discounting facility.
Providers of this type of debt funding include the banks, which will have a range of financing products, and don't forget that you will need a trading bank account anyway but banks are however unlikely to want to fund such deals by way of overdraft facilities.
'Structured' or 'Package' lenders, are invoice discounters who are also able to offer financing against property and/or plant and machinery, as well as in some cases stock. While such funders are key to many successful MBO/MBIs, some limit their overall exposure in any deal to a certain percentage of debtors, such as 150% of the debtor book, which can limit the ability to raise funds from other assets.
There are also stand alone independent specialist funders, which focus on providing finance against any one particular class of asset, such as a factor or invoice discounter to cover debtors, a building society to lend on the property, and an asset financier to cover the plant and machinery. Use of such funders in whole or in part in combination with a package lender can provide greater financing or 'headroom' than use of a package funder alone which can be important in some cases.
Where you own commercial property, generally 70% of the open market value (OMV) can be raised through a mortgage (or by using a bridging loan if funding is required quickly or where the transaction does not fit mainstream lending criteria), while 100% of OMV can be obtained (or more where valuations have been conservative) by way of a sale and leaseback, reducing the requirement to fund part of the property out of equity.
Where a business has significant plant and machinery, 70% to 100% of its value can be raised by a 3to 5 year sale and leaseback arrangement.
An advance of up to 85% of the available debtor book, which is to say those debtors of the right type, under 90 days old, up to credit limits and so on, should be available. Some funders will also take account of finished goods stock by way of an increased level of draw down against debtors, sometimes in excess of 100%.
Your professional advisors or brokers should be able to pull together an appropriate package of funding from these types of sources for your transaction. The key information they will need to establish how much debt funding can be obtained for an acquisition are details of:
* The deal, the type of sale, a share purchase or business and assets, the purchase price, the expected working capital requirements following sale and the funds coming in from other sources by way of equity from a VC or the buying team, grants or vendor financing by way of deferred consideration or an earn out.
* The business, which sector it is in, its trading history and performance including the last three years accounts, its forecasts with underlying assumptions and details of any turnaround plan if it is in difficulty.
* The management team including CVs and statements showing their net worth.
* Valuation and description of any freehold or leasehold property and details of any environmental or contamination issues.
* Valuations, or if not, an asset listing with sufficient information regarding machinery make, model, age and condition to allow a desktop valuation, of all plant and machinery together with outstanding HP and lease liabilities.
Aged debtor lists, aged creditor lists and a package of sample sales order, delivery and invoicing documentation, as well as finished goods listings.
Funding an MBI/MBO With Loans
Funding an acquisition or an MBO/MBI is a large subject but in essence there are four main sources of money to consider. The two main sources are commercial debt by way of borrowing against the assets being purchased and equity, which will come from a mixture of a venture capitalist (VC) who is backing the purchasing team, or the director's own equity raised for example against personal property. There are also grants and soft loans, which are of particular relevance in development areas, and vendor finance by way of deferred payment terms or an earn out of the seller's interest.
It is important to remember that the funding sought needs to cover not only the purchase price including clearance of any debt to be satisfied as part of the deal, but also the working capital required to trade the business after completion, and any investment required to develop or restructure the business after the purchase. After all, it is no good buying the business only to find that you do not have the cash with which to run it. You therefore need to work closely with your advisers and make sure your forecasts are robust and that you raise sufficient funding to see the business through all the contingencies you can envisage, while also ensuring you comply with the legal requirements of borrowing against a business's assets.
Money raised by way of loans against assets will comprise a 'structured finance' package of borrowings against property by way of commercial mortgage, (or bridging loan if a transaction needs to be carried out quickly) or sale and leaseback, plant and machinery by way of sale and leaseback, and debtors and sometimes stock by way of a factoring or invoice discounting facility.
Providers of this type of debt funding include the banks, which will have a range of financing products, and don't forget that you will need a trading bank account anyway but banks are however unlikely to want to fund such deals by way of overdraft facilities.
'Structured' or 'Package' lenders, are invoice discounters who are also able to offer financing against property and/or plant and machinery, as well as in some cases stock. While such funders are key to many successful MBO/MBIs, some limit their overall exposure in any deal to a certain percentage of debtors, such as 150% of the debtor book, which can limit the ability to raise funds from other assets.
There are also stand alone independent specialist funders, which focus on providing finance against any one particular class of asset, such as a factor or invoice discounter to cover debtors, a building society to lend on the property, and an asset financier to cover the plant and machinery. Use of such funders in whole or in part in combination with a package lender can provide greater financing or 'headroom' than use of a package funder alone which can be important in some cases.
Where you own commercial property, generally 70% of the open market value (OMV) can be raised through a mortgage (or by using a bridging loan if funding is required quickly or where the transaction does not fit mainstream lending criteria), while 100% of OMV can be obtained (or more where valuations have been conservative) by way of a sale and leaseback, reducing the requirement to fund part of the property out of equity.
Where a business has significant plant and machinery, 70% to 100% of its value can be raised by a 3to 5 year sale and leaseback arrangement.
An advance of up to 85% of the available debtor book, which is to say those debtors of the right type, under 90 days old, up to credit limits and so on, should be available. Some funders will also take account of finished goods stock by way of an increased level of draw down against debtors, sometimes in excess of 100%.
Your professional advisors or brokers should be able to pull together an appropriate package of funding from these types of sources for your transaction. The key information they will need to establish how much debt funding can be obtained for an acquisition are details of:
* The deal, the type of sale, a share purchase or business and assets, the purchase price, the expected working capital requirements following sale and the funds coming in from other sources by way of equity from a VC or the buying team, grants or vendor financing by way of deferred consideration or an earn out.
* The business, which sector it is in, its trading history and performance including the last three years accounts, its forecasts with underlying assumptions and details of any turnaround plan if it is in difficulty.
* The management team including CVs and statements showing their net worth.
* Valuation and description of any freehold or leasehold property and details of any environmental or contamination issues.
* Valuations, or if not, an asset listing with sufficient information regarding machinery make, model, age and condition to allow a desktop valuation, of all plant and machinery together with outstanding HP and lease liabilities.
Aged debtor lists, aged creditor lists and a package of sample sales order, delivery and invoicing documentation, as well as finished goods listings.
It is important to remember that the funding sought needs to cover not only the purchase price including clearance of any debt to be satisfied as part of the deal, but also the working capital required to trade the business after completion, and any investment required to develop or restructure the business after the purchase. After all, it is no good buying the business only to find that you do not have the cash with which to run it. You therefore need to work closely with your advisers and make sure your forecasts are robust and that you raise sufficient funding to see the business through all the contingencies you can envisage, while also ensuring you comply with the legal requirements of borrowing against a business's assets.
Money raised by way of loans against assets will comprise a 'structured finance' package of borrowings against property by way of commercial mortgage, (or bridging loan if a transaction needs to be carried out quickly) or sale and leaseback, plant and machinery by way of sale and leaseback, and debtors and sometimes stock by way of a factoring or invoice discounting facility.
Providers of this type of debt funding include the banks, which will have a range of financing products, and don't forget that you will need a trading bank account anyway but banks are however unlikely to want to fund such deals by way of overdraft facilities.
'Structured' or 'Package' lenders, are invoice discounters who are also able to offer financing against property and/or plant and machinery, as well as in some cases stock. While such funders are key to many successful MBO/MBIs, some limit their overall exposure in any deal to a certain percentage of debtors, such as 150% of the debtor book, which can limit the ability to raise funds from other assets.
There are also stand alone independent specialist funders, which focus on providing finance against any one particular class of asset, such as a factor or invoice discounter to cover debtors, a building society to lend on the property, and an asset financier to cover the plant and machinery. Use of such funders in whole or in part in combination with a package lender can provide greater financing or 'headroom' than use of a package funder alone which can be important in some cases.
Where you own commercial property, generally 70% of the open market value (OMV) can be raised through a mortgage (or by using a bridging loan if funding is required quickly or where the transaction does not fit mainstream lending criteria), while 100% of OMV can be obtained (or more where valuations have been conservative) by way of a sale and leaseback, reducing the requirement to fund part of the property out of equity.
Where a business has significant plant and machinery, 70% to 100% of its value can be raised by a 3to 5 year sale and leaseback arrangement.
An advance of up to 85% of the available debtor book, which is to say those debtors of the right type, under 90 days old, up to credit limits and so on, should be available. Some funders will also take account of finished goods stock by way of an increased level of draw down against debtors, sometimes in excess of 100%.
Your professional advisors or brokers should be able to pull together an appropriate package of funding from these types of sources for your transaction. The key information they will need to establish how much debt funding can be obtained for an acquisition are details of:
* The deal, the type of sale, a share purchase or business and assets, the purchase price, the expected working capital requirements following sale and the funds coming in from other sources by way of equity from a VC or the buying team, grants or vendor financing by way of deferred consideration or an earn out.
* The business, which sector it is in, its trading history and performance including the last three years accounts, its forecasts with underlying assumptions and details of any turnaround plan if it is in difficulty.
* The management team including CVs and statements showing their net worth.
* Valuation and description of any freehold or leasehold property and details of any environmental or contamination issues.
* Valuations, or if not, an asset listing with sufficient information regarding machinery make, model, age and condition to allow a desktop valuation, of all plant and machinery together with outstanding HP and lease liabilities.
Aged debtor lists, aged creditor lists and a package of sample sales order, delivery and invoicing documentation, as well as finished goods listings.
Wednesday, September 8, 2010
Mining for Those Golden Prospects Should Come Easy to Financial Advisors
Prospecting is necessary since the purpose of business is to attract and maintain customers. (Source - Peter Drucker) Many professional sales people including small business owners find prospecting difficult.
In today's world, there are 3 significant investments - house (property), car (transportation) and retirement. As a financial advisor, you have far more golden opportunities to increase sales than many others who seek to sell their products or services.
If you are a financial advisor, you should be able to mine for those golden prospects much easier because:
* More people have a need for financial security
* Less people understand what they need to do
* Very few people know how to do what they need to do
How you mine for prospects can be as simple as asking for referrals, joining a formal networking group or holding seminars that can further educate the need of your prospects. The goal is to build an authentic relationship of mutual trust from which you then have the opportunity to discover additional wants and needs of your prospect.
With so many financial advisors saying the same thing about protecting your money to growing your wealth, you must also use these opportunities to further separate yourself from the other financial advisors. I call this being the red jacket in the sea of gray suits.
Another way to prospect is to focus on a niche market such as:
* New married couples
* Families with children in middle school
* Couples without children
* Early retirement (forced attrition) workers
* Widows
* Widowers
* Business owners looking into succession planning
* Recent college graduates
Once your niche market is identified then you need to create a plan and then execute or operationalize your goals within that plan. All of your prospecting (marketing) activities should then be directed to achieving those goals. By taking these actions, you will be mining a lot more golden prospects and potentially not working nearly as hard to increase sales.
In today's world, there are 3 significant investments - house (property), car (transportation) and retirement. As a financial advisor, you have far more golden opportunities to increase sales than many others who seek to sell their products or services.
If you are a financial advisor, you should be able to mine for those golden prospects much easier because:
* More people have a need for financial security
* Less people understand what they need to do
* Very few people know how to do what they need to do
How you mine for prospects can be as simple as asking for referrals, joining a formal networking group or holding seminars that can further educate the need of your prospects. The goal is to build an authentic relationship of mutual trust from which you then have the opportunity to discover additional wants and needs of your prospect.
With so many financial advisors saying the same thing about protecting your money to growing your wealth, you must also use these opportunities to further separate yourself from the other financial advisors. I call this being the red jacket in the sea of gray suits.
Another way to prospect is to focus on a niche market such as:
* New married couples
* Families with children in middle school
* Couples without children
* Early retirement (forced attrition) workers
* Widows
* Widowers
* Business owners looking into succession planning
* Recent college graduates
Once your niche market is identified then you need to create a plan and then execute or operationalize your goals within that plan. All of your prospecting (marketing) activities should then be directed to achieving those goals. By taking these actions, you will be mining a lot more golden prospects and potentially not working nearly as hard to increase sales.
Monday, September 6, 2010
The Three Critical Business Measures Which Can Turn Around a Retail Business
There are three key measurements which can guide better quality business decisions. These three measures are more valuable than others since they focus on the return achieved by the retail business against key cost/risk points.
1. Stock turn.
2. Return on investment
3. Return on floor space.
The inventory of the typical retail business often represents the largest allocation of capital outside the shop fit itself (in some cases). The sale of inventory is the key source of income and through this business operating profit.
Stock Turn is a ratio that compares average inventory value to sales revenue. While it can be calculated using units, cost dollars or retail dollars, the recommendation of experts is that retail is the best approach.
The calculation is based on dividing the annual sales by the average inventory value. This calculation can be done by item, category, department or the business as a while.
The are usually benchmark numbers available for comparing stock turn with other businesses in your field. This is where stock turn is useful in comparing the inventory efficiency of one business over another.
If the stock turn rate is too low, it usually means that the business has too much stock or the wrong stock. If the stock turn number is high, it means that the business could benefit from more stock.
What is too high and what is too low will depend on the nature of the business.
Return on investment is the amount of profit the business will realize in return for a specific expenditure of money, usually express as a percentage of the original monetary outlay. In terms of inventory, it reports the profit return from an investment in stock being achieved by the business.
ROI is a cash flow metric which is used by analysts in a range of business situations. It is most useful in retail for comparing performance between product categories.
Return on Floor space. This is a calculation done on revenue and gross margin per square foot of retail floor space. This calculation is particularly useful in shopping malls and other locations where retail rental costs are high.
Retailers who measure and track these three Key Performance Indicators will find that the quality of their business decisions improves with time.
Using good inventory management software, retailers can automate the gathering of data necessary to calculate the important numbers and keep track of them over time.
Good data is essential to calculating these and any other key performance indicators. Poor data will lead to poor business decisions. This is why it is essential for retailers to use the right software and to back this with disciplines with employees to drive their proper and professional use of the software.
Better data makes for better decisions and better decisions makes for increased profits for the business and sustained employment for employees.
1. Stock turn.
2. Return on investment
3. Return on floor space.
The inventory of the typical retail business often represents the largest allocation of capital outside the shop fit itself (in some cases). The sale of inventory is the key source of income and through this business operating profit.
Stock Turn is a ratio that compares average inventory value to sales revenue. While it can be calculated using units, cost dollars or retail dollars, the recommendation of experts is that retail is the best approach.
The calculation is based on dividing the annual sales by the average inventory value. This calculation can be done by item, category, department or the business as a while.
The are usually benchmark numbers available for comparing stock turn with other businesses in your field. This is where stock turn is useful in comparing the inventory efficiency of one business over another.
If the stock turn rate is too low, it usually means that the business has too much stock or the wrong stock. If the stock turn number is high, it means that the business could benefit from more stock.
What is too high and what is too low will depend on the nature of the business.
Return on investment is the amount of profit the business will realize in return for a specific expenditure of money, usually express as a percentage of the original monetary outlay. In terms of inventory, it reports the profit return from an investment in stock being achieved by the business.
ROI is a cash flow metric which is used by analysts in a range of business situations. It is most useful in retail for comparing performance between product categories.
Return on Floor space. This is a calculation done on revenue and gross margin per square foot of retail floor space. This calculation is particularly useful in shopping malls and other locations where retail rental costs are high.
Retailers who measure and track these three Key Performance Indicators will find that the quality of their business decisions improves with time.
Using good inventory management software, retailers can automate the gathering of data necessary to calculate the important numbers and keep track of them over time.
Good data is essential to calculating these and any other key performance indicators. Poor data will lead to poor business decisions. This is why it is essential for retailers to use the right software and to back this with disciplines with employees to drive their proper and professional use of the software.
Better data makes for better decisions and better decisions makes for increased profits for the business and sustained employment for employees.
Thursday, September 2, 2010
Finding The Right Business Advisors
The job role of its is to help businesses improve their performance by looking into their existing problems and working upon the same by putting into place some definite changes that might turn out to be highly effective. Also, they help businesses decide what would be the best option for them. Business strategy advisors have an important role to play in all types of business.
It does not matter if your business is home based, small or medium-sized, or a large scale organization. When you are facing problems and do not know how to work your way out of them, it is always best to employ the services of its who are both experienced and well versed.
Today, there are its for every business. Right from family its to small its, there are service providers for all types of establishments. In fact, you also have its at international locations offering services to customers all over the world.
Its Locating The Right Ones
There are many it out there claiming to be the best, but you need to be sure that you are appointing the services of one who is actually the best possible. Business development advisors have become so important that every successful business in the world first consults them before taking any major decision.
If you are looking for some business advice, here are some ways to locate good, experienced advisors:
*Ask Around - Sometimes, just to ask around locally, take the advice of friends and family and research a little is the best and easiest thing to do. This could lead you to the perfect counselor for your business.
*Research - Do not just settle for the first it that you come across. Look around and research a bit and do not shy away from putting in a bit of effort. It will definitely pay off once you find the best possible advisor for your establishment.
*Make The Most Of Free Consultations - Most of the professionals out there offer a consultation session or two for free so you can ask any question you may have and try and find out if the advisor you are with right now is the best choice possible or not.
The key to finding the right advisor for your business is to first and foremost know what your own requirements are. That is when you would know for sure what you need from your advisor and work towards finding one.
Looking Overseas - You Do Not Need To Settle For Local!
If you do not find a good enough it in your own city, state or even country, you can always decide to look overseas. That is the best part about this! You do not need to confine yourself and stick to what you can find locally. There are various it who offer their services internationally.
There are very good chances that your needs would be met by an advisor from an overseas location and when that happens, do not step away just because it might turn out to be a little more expensive than usual.
itscan very well be just the thing your business needs to turn around completely and start being what you always wanted it to be. Look around, research and find a good advisor who would take care of all your business issues. It will be a good thing.
It does not matter if your business is home based, small or medium-sized, or a large scale organization. When you are facing problems and do not know how to work your way out of them, it is always best to employ the services of its who are both experienced and well versed.
Today, there are its for every business. Right from family its to small its, there are service providers for all types of establishments. In fact, you also have its at international locations offering services to customers all over the world.
Its Locating The Right Ones
There are many it out there claiming to be the best, but you need to be sure that you are appointing the services of one who is actually the best possible. Business development advisors have become so important that every successful business in the world first consults them before taking any major decision.
If you are looking for some business advice, here are some ways to locate good, experienced advisors:
*Ask Around - Sometimes, just to ask around locally, take the advice of friends and family and research a little is the best and easiest thing to do. This could lead you to the perfect counselor for your business.
*Research - Do not just settle for the first it that you come across. Look around and research a bit and do not shy away from putting in a bit of effort. It will definitely pay off once you find the best possible advisor for your establishment.
*Make The Most Of Free Consultations - Most of the professionals out there offer a consultation session or two for free so you can ask any question you may have and try and find out if the advisor you are with right now is the best choice possible or not.
The key to finding the right advisor for your business is to first and foremost know what your own requirements are. That is when you would know for sure what you need from your advisor and work towards finding one.
Looking Overseas - You Do Not Need To Settle For Local!
If you do not find a good enough it in your own city, state or even country, you can always decide to look overseas. That is the best part about this! You do not need to confine yourself and stick to what you can find locally. There are various it who offer their services internationally.
There are very good chances that your needs would be met by an advisor from an overseas location and when that happens, do not step away just because it might turn out to be a little more expensive than usual.
itscan very well be just the thing your business needs to turn around completely and start being what you always wanted it to be. Look around, research and find a good advisor who would take care of all your business issues. It will be a good thing.
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