Monthly Client Review & Your Business Model - maus.com · 19/06/2019 10 DEVELOPING A BUSINESS...

19/06/2019

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#SNH19ScalingNewHeights.com Copyright MAUS Business Systems – www.maus.com.au - All rights reserved. Can’t be copied or reproduced

Monthly Client Review & Your Business Model

ScalingNewHeights.com #SNH19Copyright MAUS Business Systems – www.maus.com.au - All rights reserved. Can’t be copied or reproduced

Maus.com/scaling

http://www.maus.com.au/


19/06/2019

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Advisory is not meant to be hard!

By the time you walk away from here you will have a simple monthly process and an easy business model.

Copyright MAUS Business Systems All Rights Reserved

Greg is a Corporate Refugee(Ex CFO)

The price point and value proposition has already been set by your competition

Greg is a Certified Advisor with the Institute of Advisors & a MAUS Certified Partner

Number of clients: 4-10 clientsAverage Hours per client 3-4Monthly Charge $1.5k-$5kBillable % approx. 25%

Client annual revenue per client $20 – 60k

Typical structureUpfront fee: $3,500-$8,500Monthly Fee $1,500 – $5,000 per month(One to two meetings per month)

Meet Greg


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Meet Greg

Greg is a Corporate Refugee(Ex CFO)

Greg is a MAUS Partner

There are over

55,000business coaches like

Greg in the USA

$20k - $60k per annum


It starts with your mindset

You are not a CFOYou are a

Business Advisor

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STEP 1

Think of yourself as a sports coach.

Ask the questions a coach asks?

To set up a successful business advisory…

HOW WILL YOU GET THERE?

1. Expand internationally

2. Launch a New Product

3. Improve our customer service

4. Redesign our website

$2.5mRevenue

Year 2018/2019

$5mRevenue

Year 2020/2021

Where are you now?

Where do you want to go?

Action Who When

What actions


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STEP 2:

Keep your client

accountable!

Copyright Institute of Advisors All Rights Reserved

MONTHLY REVIEW MEETING

FINANCE CUSTOMER

SYSTEMS & PROCESSES INNOVATION & LEARNING

MONTHLY SCORECARDWHAT WERE YOUR SUCCESSES & OBSTACLES

LAST MONTH?

WHAT STRATEGIES & ACTIONS SHOULD YOU HAVE DONE LAST MONTH / WILL YOU DO NEXT MONTH?

Major Successes last month Major Obstacles last month

Action Who When


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MONTHLY REVIEW MEETING – EXERCISE – ADVISORY PRACTICE

FINANCE CUSTOMER



LAST MONTH?



Action Who When

2018 Revenue2019 Revenue


STEP 2:BUILD A SCORECARD

WITH THE KPI’s TO MONITOR

YOU ARE NOT A CFO YOU ARE A BUSINESS ADVISOR


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What sank the titanic?


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Financial

Customer

Internal process

Innovation Learning


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Financial

Customer

Internal process

Innovation Learning

Increase Revenue

Increase Profit

Satisfied customers

Creating recurring revenue

Increase number of customers

Word of mouth

referrals

Improve customer

service Improve conversion

rate

More lead generation

Customer service training

Employee satisfaction

Sales skills

MONTHLY REVIEW MEETING

INNOVATION & PEOPLE

FINANCIALS

SYSTEMS & PROCESSES

CUSTOMERS

SalesProfitCash

Customer ComplaintsProduct Returns / Average Value SaleSales conversion rates# New LeadsWeb Visitors

New ProductsAbsenteeismStaff training sessionsProduct development TimeManagement meetings

Number of outbound sales callsNumber of debtors callsProduction Reject Rates

Did you achieve your goals last month?

Action Who When

What strategies & actions should you have done last month / will you do next month?

Successes Obstacles

What were your successes and obstacles last month?

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DEVELOPING A BUSINESS SCORECARD

INNOVATION & PEOPLE

FINANCIALS

SYSTEMS & PROCESSES

CUSTOMERS

A scorecard for the business broken into the 4 quadrants.

We need to improve SalesWe need to improve ProfitWe need to improve Cash

We need to keep our customers happyWe need to reduce Customer ComplaintsWe need to increase Subscription rate.We need to reduce Product Returns / Subscription cancellationsWe need to increase the Average Value SaleWe need to improve Sales conversion ratesWe need to get more leads

We need to develop new productsUpgrade and enhance our existing productsWe need to improve employee moraleWe need to develop our people through trainingWe need to create client feedback programsWe need to create advertising programs

We need to make sure our sales team makes lots of callsWe need to run a weekly training session with sales and customer service staffWe need to monitor our Production Reject RatesWe need to have a staff function / teambuilding event every 2 months We need to attend one association meeting per month

STEP 1: What Financial Strategies?

STEP 2: What Customer Strategies?

STEP 3: What System & Process Strategies?

STEP 4: What Innovation & People Strategies?

Financial

Customer

Internal process

Innovation Learning

WHAT KPI’S COULD YOU PUT FOR AN ADVISORY PRACTICE?

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WHAT KPI’S COULD YOU PUT FOR AN ADVISORY PRACTICE?

FINANCE CUSTOMER



LAST MONTH?



Action Who When

2018 Revenue2019 Revenue


Confidence Building• Client discovery interviews (Not billed)

• Use products yourself

• Use with familiar clients

• Reading/education

Marketing Outbound Activity• New industry association memberships sourced

• Listing on association website directories

• Gift vouchers given to clients associates to get

referrals

• Social, community events attendees

• Possible contacts contacted:

o Current contacts and clients

o Other consultant

o Business/ex work associates

o Bank managers, wealth planners, brokers

o Lawyer / solicitor

o Family and friends

Advisory Practice Sample KPI’s• Seminars

• Speeches

• Independent surveys

• Contest and prizes in local newspapers

• Sponsorships

• Community service – free work to build

experience

• PR Release and Ezines

• Client Case studies

• Advertising: (if you cant afford single then

group advertising with other coaches)

• Local Newspapers/ Magazine /Adwords

• Enrolment on Search engines

Promotional Material• Spend 1 day a month on company marketing

development

(Capability Statement, Company Background,

Colour printouts of reports, Sales Letter,

Proposal, Website)

Financial• Total Advisory Revenue

• Advisory Revenue New Clients

• Advisory Revenue Existing Clients

• Advisory Profit Contribution

• Average value sale

Client Acquisition• Number of new clients

• Number of client assignments

• Advisory hours billed

• Conversion Rate

Activity to win clients• Call existing customers

• Completed Discovery Assessments

• Calls to influencers

• Seminars inhouse

• Seminar Guest speaker

• Cold calling


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Social Media• Facebook

• Linked in Posts

• Tweets

• Other blog feeds

Other Activities• New tenders sourced

• Government grants

• Government small business assistance

Existing client Follow up• Follow up letter sent to existing clients

• Testimonial / case study requested

• Referrals requested

• Monthly implementation review offered

• Monthly newsletter sent with article or new

information

Lead follow up• Called within 7 days

• No. of messages left

• Follow up letter/email with resume/flyer

sent

New Clients• Business Development Plan conducted

• Thank you letter & Proposal sent

• Taken out to lunch

Innovation / learning• Self development – books and industry

publications read

• Web articles read

• Training courses / Free seminars /

information sessions attended

Quality• Customer drop off

• Annual or life revenue

• Feedback form results

• Training feedback forms

Direct Marketing• No. of new databases rented

• No. of mail campaigns sent

• No. of telephone calls made

• No. of proposals sent

• No. of personal meetings

• Monthly newsletter sent

• Post box drops: ‘Need a business plan’ cards,

flyers etc.

• Sales promotions carried out; i.e No. of free

diagnostics sent

• Actions to contact chosen market segments

• No. of clients in pipeline

Advisory Practice Sample KPI’s


THE FOLLOWING CASE STUDY EXPLAINS STRATEGIC VS.

FINANCIAL METRICS AND THE CONCEPT OF THE BALANCED

SCORECARD.


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John Bartlet is the CEO of a $10 million dollar publishing company.

He has just returned back from overseas after 3 months doing extensive market development in Asia and has a board meeting the next day with his institutional shareholders.

He has to report on the health of the company and justify

his claim for his annual bonus.

CASE STUDY


Sales Profits

Is the company performing well?

FINANCIAL INDICATORS



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• Company is doing well.

• Sales and profits are increasing marginally over time.

FINANCIAL CONCLUSION


Sales Profits

John wanted to review an additional non financial Indicator…

Leads

NEW KPI –NON FINACIAL



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• Company is doing well.

• Sales and profits are increasing marginally over time.

• Leads are also increasing at a substantial level, which is excellent for future sales.

JOHN’S CONCLUSION


JOHN SMITH HOWEVER NOTICES ONE MORE KPI

AS HE FINALISES HIS REPORT.


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Sales Profits

Leads Units

UNITS SOLD


WHAT IS JOHN’S CONCLUSION?

IS THIS GOOD OR BAD?


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• The company must be offering a special promotion or a price discount. This would then be consistent with a higher increase in units than in sales.

• He checks the average value sale figures to make sure.

JOHN CONCLUDES


Average Value Sale

What other KPI could John use to help him with his analysis?

What does John conclude from this graph and what new KPI should he review?

AVERAGE VALUE SALE



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• the average value sale has remained consistent.

• This does not then explain why unit sales have increased above dollar sales.

• John then reviews the number of products returned.

JOHN CONCLUDES


John looks at a Products Returned from customers.

What are his conclusions and what KPI should he now review?

Returns

PRODUCT RETURNS



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His quality levels appear fine but he can’t think of what else can cause returns.

What conclusion might he reach?

Quality

QUALITY KPI REVIEW


John concludes:

Whenever John has a feeling that figures are wrong they generally are. He decides to check on

a) the integrity of data that was entered and b) the basis for how the quality index was determined.

QUESTION: What things can be measured to give us a quality index?

JOHN CONCLUDES



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JOHN DISCOVERS THAT HIS QUALITY GRAPH IS MADE OF THESE THREE PARAMETERS.

John realises there is one major element missing from these quality indexes or a measurement that should always be viewed in conjunction with this index?

Reject Rates On time delivery Delivering within spec


DO YOU KNOW WHAT THIS COULD BE?

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John asks his staff to look at customer complaints and feedback and to set up a customer satisfaction level….he is alarmed!

When he explores some of the emails sent back by customers he reads feedback such as “old”,

“outdated”.

Customer Satisfaction

CUSTOMER SATISFACTION


• He immediately blames the editors for being lazy.

• What KPI could he look at to see the performance of the editors?

JOHN CONCLUDES



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He is confused because he monitors very closely the output per editor

He remembers that he put in place a commission scheme 6 months ago that measured the number of pages written per month by each editor! That was just after he fired two editors. But the commission

scheme lowered his costs and should have equated to a slight increase in the overall number of pages.

Editorial ProductivityPRODUCTIVITY MEASURMENT


Number of pages written

WHAT SHOULD IT BE BASED UPON?

Number of Pages written

MEASURMENT BASED ON…



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WHAT KPI’S COULD HE THEREFORE USE THAT WOULD GIVE

HIM A BETTER PICTURE?


THE EDITORS SHOULD BE MEASURED UNDER THREE MAJOR AREAS RATHER THAN JUST ONE. THESE COULD THEN PERHAPS BE MERGED INTO ONE

INDICATOR CALLED EDITORIAL KPI.

Number of Pages written

New innovative articles completed

New Ideas for new articles

Editorial KPI

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CONSEQUENCES OF REWARDING THE

WRONG KPI


HE THEN CHECKS THE NUMBER OF NEW PRODUCTS LAUNCHED.

He wonders how his people could be so incompetent to let this happen!

New Articles (Products)

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His General Manager calls the editors into a meeting and asks what has happened.

He then explained to John that in order for the editors to meet the high output rate set by the company that they had no time for innovation and new topic exploration or research.

It was easier and quicker to rehash old material.

Because commission was based on number of pages, the editors had increased their take home pay by concentrating on older articles.

CONCLUSION


GENERAL COST CUTTING


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His GM also declares that it is John’s fault because he implemented the following initiatives 6 months ago in order to

make budget.

Cut back on external consultants:No client lunches:No staff drinks: No association sponsorships:No new equipment:Contract sales to an external sales agency:

CONCLUSION


HIS INITIATIVES WORKED WELL.Contract out

sales functionExternal Consultants Client Lunches

Association Sponsorships

Staff DrinksNew EquipmentExpenditure



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Contractors to do sales: Company had less contact with customers at the front line and therefore less interaction. New product ideas and feedback were not passed onto editors.

External Consultants: No formal market research or focus groups. New product ideas were being implemented based on management assessment without verifying with research. Increase chance for error.

Client lunches: The product managers regularly took the major clients out to lunch to build relationships. It also at the same time added to the ideas and suggestions for new product innovation.

Staff Drinks: After hours drinks that the company paid for were cancelled. These gatherings were a great source of intercompany interaction, problem solving and idea communication. The informality added to creative solutions.

Association Sponsorships: The company used to sponsor associations from each segment. Although this couldn’t be justified on paper with direct attributable sales, this sponsorship meant that the company was always talking to key influencers about trends and problems as well as attending key social industry events.

New Equipment: The competition was investing in machinery that was lowering their unit cost and re-investing the saved profit into product quality and innovation.

CONSEQUENCE OF INITIATIVES


John then conducted an employee survey aimed at assessing the situation. He is alarmed at one unintended result of the survey

He wonders how this has/will impact on the organisation.

Employee Satisfaction

EMPLOYEE SATISFACTION



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…WHAT DO YOU THINK WILL BE THE CONSEQUENCES?


CONSEQUENCESEmployee

SuggestionsSick Leave Resignations

Customer ServicePunctualitySales Conversion rates


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BUT IF EVERYTHING IS GOING SO BAD HOW IS

SALES AND PROFIT ABLE TO INCREASE IN SUCH AN OBVIOUSLY

BAD SITUATION


In order to keep sales up the company needed more leads

In order to get more leads the company spent more on advertising

Leads Advertising

IN ORDER TO KEEP SALES UP THE COMPANY NEEDS MORE LEADS

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BUT PROFITS ARE INCREASING!

HOW DID THE COMPANY PAY FOR THE INCREASE IN

ADVERTISING


Capital Expenditure Wages Overhead

The company appeared as if it was going well but in actual fact there were major consequences to its initiatives.

CUT BACK ON GENERAL OVERHEAD, CAPITAL EXPENDITURE AND WAGES

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• Retrenched staff, cut back in employee facilities, no pay rises, cut back in commission leads to employee dissatisfaction.

• Employee dissatisfaction leads to lower quality and innovation and sales conversion rates.

• Lower conversion rates results in lower profits.

• Lower product quality leads to higher product returns, lower customer satisfaction and lower profit.

SOME CONSEQUENCES


• John informs the board about improvements in sales, profitability and leads.

• He receives his bonus based on performance especially in a tough economy.

• John places his resignation the next week siting another job offer.

• John leaves with an excellent track record as a good manager and is easily employed elsewhere.

BOARD MEETING



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• We need to address all critical problem areas

of the business.

• We need to use scorecards to align the vision,

strategies and key success factors of the firm

• We need to monitor performance and change

in a dynamic environment where we take

immediate action.

HOW CAN WE HELP THE

COMPANY?


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Monthly Client Review & Your Business Model - maus.com · 19/06/2019 10 DEVELOPING A BUSINESS...

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