And so another Olympics has come and gone. Two things struck me whilst watching these games – how small the crowds were and the number of shows of sportsmanship amongst the cut and thrust of a once in a four year competition.  I was also reminded about the importance of a coach.

This was particularly evident in “turn” events such as the high jump, long jump and pole vault. After their turn, every athlete seemed to engage their coach in a quick chat.  No doubt it was usually positive affirmation but it also seemed to frequently be a reminder of the basics; to follow a system, to do the right things the right way.

So what systems do you have in your business? How clear are those systems?  Do you practice them?  Does your team clearly understand what they are and are trained in them?  How often do you focus and remind yourself about doing the right things the right way – or are you just dealing with the issue of the day (whatever that may be and regardless of how unimportant that may be in the long run).

So who is your coach? Are you guilty of trying to wearing both hats?  Who is reminding you and training you on doing the right things the right way?  Maybe it’s time for you to appoint a coach.  We can help you as we do with so many clients – and from that we can provide you with insight and skills into many areas that we have gained from a vast array of experiences.  Our service offering will be further improved with the introduction of an upcoming key performance indicator monitoring system – keep an eye out for that.

 At MRS, we will spend today planning for your success tomorrow.

Many of you will know of or have read Jim Collins famous book Good to Great. Over the weekend I finished another one of his books called Great by Choice.

Great by Choice is a fascinating examination on the role of luck and preparation in the success of a business. It is a highly readable book full of real life examples as well as some most interesting analogies such as Scott and Amundsen’s respective efforts to reach the South Pole.

Collins and his co-author Hanson studies lead to some interesting discoveries including that the best leaders were not greater risk takers, were not more visionary and were not more creative than their competitors. They were however more disciplined, understood their industry better and as the authors described, more paranoid.  Consequently, bad luck did not derail them and they were better place to take advantage of good luck and opportunities when they presented themselves.

Although it is a book written with American businesses as case studies, it is highly relevant to anyone in business anywhere.

And like any great business book, don’t try reading it before you go to bed – you won’t be able to sleep as your mind will be racing too fast.

Our new reception features this and many other famous business books which you are welcome to borrow.

At MRS, we will spend today planning for your success tomorrow.

Three questions that address increasing profitability which are often ignored are:-

1. What makes your business succeed?
2. What are the key metrics (KPI’s) that reveal how well your business is performing?
3. Are those metrics part of your regular reporting process?

The reality is that these key numbers aren’t produced by the typical accounting system. Your accounting system tells you what happened in your business in terms of things such as profit and money in the bank.

An accounting system won’t tell you how you got there – just what the results are. An accounting system also won’t report on what would be the result of making changes to your business’ key drivers.  You need to augment your reporting function to report on these critical numbers.

We had an interesting case during the week. We have a client who runs a consulting business.  As such, there aren’t many moving parts to it.  There is no stock and there aren’t any creditors.  There also aren’t any employees other than himself; but that will change shortly.  In this case, the key metrics are all in respect of customers – retention of existing customers, conversion rate of good (not any) prospects and increasing average transaction value.  Measuring and following these metrics will involve many activities including such as:-

• Setting up a process of checking in with existing customers to see if they require repeat or new services.
• Asking for testimonials from existing customers.
• Asking for referrals from existing customers.
• Targeting new customers of the type they want to deal with.
• Being aware of any opportunity to sell a complimentary or even new service.
• Focused marketing activities concentrating on key offerings the business wishes to sell more of.

Our advanced modelling software has revealed that minimal change to these drivers will more than double the profit. As the change required to the key drivers are so small the outcome of increased profitability is highly achievable.

And rather than working hard on everything as most business owners do, he will be working hard on the matters that matter most in his business. I will let you know what ensues.

At MRS, we will spend today planning for your success tomorrow.

I had an interesting follow up meeting with a client during the week.

They have built their business to a point where they can pick and choose who they work with, and, after a few hiccups outside work, can now fully focus on growth.

Critically, they have sought and found a quality employee that they can reliably build their business around.

But the question remains, what does good business growth look like?

We are working and will continue to work with them on such things as:-

• Understand what the typical revenue looks like in the three segments of their business.
• Identify what costs directly relate to each segment.
• Modify their accounting system so they know the profit being generated from each of these segment.
• Identify which segment is more profitable – and what the more profitable areas are within each section.
• Discuss ways in which they can generate more leads in each segment.
• Work out the hours required to support each segment as well as the general running of the business.
• Started to create budgets (which will be entered into their accounting system so they can track the performance against budget).
• Started to set KPI’s for the drivers in each segment. As Peter Drucker once wisely said, there is nothing more futile than doing well what does not need to be done at all.  One needs to identify and work on the key drivers of a business.

We find a lot of business owners as new clients are gunnas. They are gunna do this and they guunna do that.  The problem is that whilst they work really hard, they don’t stop to plan and think.  And they also don’t check their ideas with anyone, particularly in respect of the financial considerations and outcomes.  And to make matters even worse, they aren’t accountable to anyone – so things just drift along the same old way in any direction the wind is blowing.

We have some cutting edge software that can show you the outcome of any decision you can make in respect of your business.   We use this with our clients that we have regular monthly and quarterly meetings to identify what can be done, what the outcome will look like and to instigate planning around financial and human resources that will be required to meet the desired outcome.

Does your accountant help you like this? If now, why not meet with us in a free meeting so we can explain the ways in which we can help improve your business.  Call us – you have nothing to loose and everything to gain.

At MRS, we will spend today planning for your success tomorrow.

It never ceases to appal me how most accountants do so little for their clients. Too many accountants’ role starts and ends with lodging historical documents such as BAS’s and Tax Returns.  They are important documents in themselves and they should be prepared with care and diligence.   However, what an accountant should do is to use their years and wide array of experiences to show a client how they can better run their business.

We met a new client late last year. Their accountant only prepared historical documents.  Worse still, the accountant didn’t understand the client’s business.  The client has a very good understanding of what services they provide and what market they operate in. They are however not an accountant. Put this together and the accountant was treating sales orders and sales invoices. The orders weren’t income!  The end result was that they have over paid a bucket load of income tax – which we will now get refunded for them. They could do with it – they were paying tax on profits they didn’t have!

Moreover, we have changed their accounting system so that they issue orders and then convert them to invoices at the time their customer will proceed with the order.

We will also segment their profit and loss so that it reports on how each part of their business is performing. We are going to have costs of new customer acquisition as a segment – our client has always wondered what it cost.  We can now put that information at his fingertips.

Going forward, our client will know where his business at any time.  More importantly, with some advanced analysis tools, we can help him better manage his cash flow, understand the outcome of making any change to his business, understand how the banks view his business amongst other insightful exercises.  But this is all a conversation for another day. …

At MRS, we will spend today planning for your success tomorrow.