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WELCOME. Key Business Metrics for Survival and Ongoing Success JIM HEILBORN JIM HEILBORN ASSOCIATES. Key Business Metrics for Survival and Ongoing Success. Standard measurements Current Ratio – Current assets/current liabilities=current ratio - PowerPoint PPT PresentationTRANSCRIPT
Key Business Metrics for Survival and Ongoing Success
JIM HEILBORNJIM HEILBORN ASSOCIATES
Key Business Metrics for Survival and Ongoing Success
Standard measurements Current Ratio – Current assets/current liabilities=current ratio Quick Ratio – (Current assets-inventory)/current liabilities=quick ratio Gross Profit – Revenues – cost of goods= gross profit Gross Margin – Net sales – cost of goods sold=gross margin
percentage Net Operating Expense – Gross margin – SG&A = net operating profit Net Profit – (Net operating profit+ income) – (other expenses + taxes)
=net profit
Gross profit ratio, Pretax profit ratio, Sales-to assets ratio, etc.
etc. All important…but............
Key Business Metrics for Survival and Ongoing Success
THE KEY COMPONENTS
SALESADMINISTRATION
OPERATIONSFINANCE
Key Business Metrics for Survival and Ongoing Success
KNOW YOUR NUMBER 1 KEY
INDICATOR THE RESTAURANT
Key Business Metrics for Survival and Ongoing Success
LEADING INDICATORS VS.
TRAILING INDICATORS
Key Business Metrics for Survival and Ongoing Success
KEY COMPONENT
SALES
Key Business Metrics for Survival and Ongoing Success
Value - What customers and investors are willing to
pay for, that employees are willing and able to provide. In a public, for-profit enterprise, sustainable value requires all three groups. Value must be worthy to those paying and those providing or it will not endure.
Mickey Connolly and Richard Rianoshek, Ph.D.
The Communications Catalyst
Key Business Metrics for Survival and Ongoing Success
Every product or service you can provide is one less reason for your customers to talk to your competitors.
Every product or service you provide is one more reason for your competitor’s customers to talk to you.
Key Business Metrics for Survival and Ongoing Success
Customer Name
Customer Expectation
Score 1 - 5
Comments
Sales
Product & Design
Order Administration
Associated Services
Delivery & Installation
Customer Service
1= Low 5 = High
Key Business Metrics for Survival and Ongoing Success
KEY INDICATORS SALES SALES ACTIVITY – SEE CHART BID LISTS
◦ NUMBER OF BIDS PLACED◦ PERCENTAGE OF SUCCESS ON BIDS
DOLLAR VOLUME OF QUOTES NUMBER OF ACTIVE CUSTOMERS NUMBER OF NEW ACCOUNTS NUMBER OF NEW ORDERS AVERAGE GROSS MARGIN/PROFIT GROSS PROFIT PER DAY DOLLARS PER REP BACKLOG SALES TO PLAN
Key Business Metrics for Survival and Ongoing SuccessGOAL TASK/OBJECTIVE TIME
FRAMEAverage monthly gross Average daily sales = $ Within next
___months
sales = $
Average monthly GP $___________ Within next ___months
dollars = $
Number of calls needed
per day -
Number of appointments needed
per day =
Number of orders needed per day
to equal daily average of $________=
Key Business Metrics for Survival and Ongoing SuccessGOAL TASK/OBJECTIVE TIME
FRAME
Number of orders needed
per day to equal daily average
of $__ GP dollars = $
Ratio of appointments to orders = ____ appointments to
____orders
Average dollars per sale = $
Average GP dollars per sale = $
Average Number of calls to make
per week =
Key Business Metrics for Survival and Ongoing Success
GOAL TASK/OBJECTIVE TIME FRAME
Average Number ofcalls to make in next 30 days = 30 DAYS
Average Number of calls to make in next 60 days = 60 DAYS
Average Number of calls to make in next 90 days = 90 DAYS
Number of new accounts to open in next 30 days = 30 DAYS
Number of new accounts to open in next 60 days = 60 DAYS
Key Business Metrics for Survival and Ongoing SuccessGOAL TASK/OBJECTIVE TIME
FRAMENumber of new accounts to open in next 90 days = 90 DAYS
Sales MixNumber of orders/dollars generated from new Accounts per month = /
Number of orders/dollars generated from established ongoing accounts = /
Review of Top Ten & rolling forecast to identify and focus on opportunities and activity On a weekly
and monthly basis
Key Business Metrics for Survival and Ongoing SuccessGOAL TASK/OBJECTIVE TIME
FRAME
Product Mix
Casegoods dollars $
Seating dollars $
Systems dollars $
Other products dollars $Number of orders/dollars generated with primary vendors per month = /$
Key Business Metrics for Survival and Ongoing Success
FORECASTING - A CRITICAL
METRIC
Key Business Metrics for Survival and Ongoing SuccessTARGETING PLANName Date
Top Ten Hot List/Close/Dollars Top Ten Target List1. 1. 2. 2. 3. 3. 4. 4. 5. 5. 6. 6. 7. 7. 8. 8. 9. 9. 10. 10.
Lead Sources
Prospecting Plan30 Day Booking Forecast - 30 Day Billing Forecast -
Key Business Metrics for Survival and Ongoing Success
ACCOUNT VENDOR BOOKING MONTH
$’S BOOKED
GP% / $’S BILLING MONTH
$’S BILLED
GP% / $’S
ABC, Inc. United 1. Nov. 40,000 34/13600 1. Nov. *20,000 34/6800
Hon 2. Dec. 15,000 28/4200 2. Dec. 40,000 34/13600
Seatability 3. Jan. 6,000 35/2100 3. Jan. 15,000 28/4200
Cowabunga United 1. Nov. 32,000 31/9920 1. Nov. *9,000 35/3150
Global 2. Dec. 27,000 33/8910 2. Dec. 32,000 31/9920
Kimball 3. Jan. 19,000 25/4750 3. Jan. 27,000 33/8910
1=CURRENT MONTH
2=NEXT MONTH
3=MONTHAFTER
NEXT
$TOTALS:
1. 72000
2. 42000
3. 25000
$TOTALS:
1. 23520
2. 13110
3. 6850
$ TOTALS:
1. 29000
2. 32000
3. 42000
$ TOTALS:
1. 9950
2. 23520
3. 13110
* Represents booking from previous forecast .
Key Business Metrics for Survival and Ongoing Success
Key Business Metrics for Survival and Ongoing Success
STRATEGIC PARTNER OR ABUSIVE MATE?
SELECTING YOUR PRIMARY VENDORS
Key Business Metrics for Survival and Ongoing Success
PRIMARY SECONDARY
TERTIARY
Key Business Metrics for Survival and Ongoing Success
Key Business Metrics for Survival and Ongoing Success
Key Business Metrics for Survival and Ongoing Success
Key Business Metrics for Survival and Ongoing Success
Key Business Metrics for Survival and Ongoing Success
KEY COMPONENT
ADMINISTRATION
Key Business Metrics for Survival and Ongoing Success
KEY INDICATORS ORDER PROCESSING◦ TIMELINESS◦ ACCURACY◦ INTERNAL PROCESSING COSTS◦ ERROR RATE◦ COMMUNICATION
INTERNAL EXTERNAL
Key Business Metrics for Survival and Ongoing Success
KEY INDICATORS HUMAN RESOURCES◦Productivity◦Contribution◦Participation◦Dependability
Key Business Metrics for Survival and Ongoing Success
KEY COMPONENT
OPERATIONS
Key Business Metrics for Survival and Ongoing Success
KEY INDICATORS OPERATIONS
SELLING SERVICE AS A PERCENTAGE OF YOUR BUSINESS
PROFITABILITY OF SERVICE OFFERINGS DELIVERY TIME AND COMPLETION INSTALLATION COMPLETION PUNCHLIST SERVICE CALLS – COMPLETING ON THE FIRST CALL FINAL SIGN OFF
Key Business Metrics for Survival and Ongoing Success
Meeting the test Determine the need for the product or service
Is it a long-term sustainable need? The cost of providing the product or service Level of service you and your company can provide “Implementability” Impact on your current business R.O.I – Return on Investment Measuring for results
Key Business Metrics for Survival and Ongoing Success
The Cost of ServiceLabor - Wages, Taxes, Benefits
Space – Taxes, Utilities, Rent/Mortgage, Insurance, Office Equipment & Supplies, Maintenance
Equipment – Tools, Machines, Maintenance, Supplies, Vehicles, Insurance,
Phones
Key Business Metrics for Survival and Ongoing Success
KEY COMPONENT
FINANCE
Key Business Metrics for Survival and Ongoing Success
KEY INDICATORS FINANCE/ACCOUNTING
ACCOUNTS RECEIVABLE◦ 75/10/10/5 RULE◦ DSO
ACCOUNTS PAYABLE◦ DISCOUNTS TAKEN/OFFERED◦ LINES OF CREDIT AND LINE DRAWN◦ VENDOR RELATIONSHIP
CASH FLOW◦ WORKING CAPITAL - DOLLARS AND RATIOS
BANKING RELATIONSHIPS BOOKED TO BILL RATIO
Key Business Metrics for Survival and Ongoing Success
BENCHMARKING◦OFDA◦BIFMA◦MANUFACTURERS◦INDUSTRY ORGANIZATIONS
