Breaking Even – Years 3 to 4
In the first two years the typical business owner learns what is required to be a business owner. In years 3-4 the focus is on achieving a break even situation, including paying themselves a reasonable salary.
Below is the learning program to achieve this goal.
The program includes
- short learning materials for each topic
- for each topic a 30 minute telephone review of the concepts
- for each module a 30 minute joint planning session implementing the concepts for your business
The cost for this 16-24 month program is $350 per module. There are 8 modules. See below.
The Modules
Module 1 Understanding Break Even Analysis
Break Even Analysis determines the volume of sales required to reach a zero profit (break even) for the business.
All costs and revenues are ultimately driven by two variables:
- Products or services sold
- Customers
Given this fact, it should be obvious that you need to know which of your products or services return the highest profit and which of your customers are the most profitable to deal with. This is where gross margin analysis comes in.
It requires
- Understanding of the behaviour of fixed costs
- Understanding of the behaviour of variable costs
- The ability to calculate the break even scenario
Module 2 Sales and its elements
At the end of this module you will understand the importance of
- Selling benefits or solutions to the customer
- Selling Methods to get results
- Forming a promotions plan
And you will also learn about
- Growing sales
- Providing a guarantee
Module 3 Marketing
This module will introduce what most small business owner don`t know about marketing
- They react to a current crisis – no long term planning
- They form strong reliance on passive word-of-mouth for sales
- They focus on developing sales through new customers
- They have a limited awareness of what marketing really is
- Tendency to ‘shot gun’ promotional activity
- Limited market intelligence
They are unable to
- Identify their target market(s)
- Develop a marketing mix
- Developing/adjusting products to increase sales and profitability
- Pricing products
- Distributing products (Place)
- Promoting products
Module 4 Effective Financial Management
Business is about making money
To do this, it must simultaneously increase three things:
- Net profit margin
- Cash flow
- Return on investment (ROI)
In this module you will learn the concepts of
- Working capital
- Net margin
- Long term debt
- Profitability
Module 5 Remuneration
This module will raise the issues of rewards and recognition for performance by owner and staff. Specifically the topics will be:
- Pay for Performance
- Motivation to align performance
- Team vs. Individual Recognition
- Effective Incentives
- Affordability of incentives
Module 6 Customer Relationship Management (CRM )
This module will deal with the central role that customers play in the business. How to find them and how to keep them.
Holding customers can be very challenging. The old underlying beliefs of marketing, that past customer behaviour could be used to predict future customer behaviour; that traditional value propositions would remain in place forever; and that improving customer relationships would always ensure customer loyalty and retention, don’t necessarily hold any longer.
Behavior of customers can shift rapidly as choices among products proliferates and consumers take advantage of the wide selection by flitting between brands on a whim, profiting from the most attractive current offers and promotions available without ever even needing to enter a shop in many instances. Competition in many sectors has become cut throat and loyalty very shaky and highly vulnerable as soon as a competitor offers better value.
In this situation, attracting and – crucially – keeping customers over the long term, is a key challenge facing most businesses.
Module 7 Creating a Brand for the Business
Your brand defines you and your business; it is a combination of what you are and how others see you.
Branding creates trust and an emotional attachment among consumers. Buying branded products becomes largely an emotional decision rather than a logical one.
Branding helps consumers make purchasing decisions. The actual product features become less important. A strong brand helps you sell on value rather than price.
Having a recognized brand also enables you to avoid discounting and maintain pricing levels when less-recognized brands are cutting theirs.
Module 8 Creating a Business Plan as a Road Map
In this module you will learn: Why Every Business Needs A Business Plan
- You know yourself how tough it is to survive in business. Today it’s not even good enough to have just a great product or service.
- These days surviving competition and growing your business, whether you are a farmer, architect or convenience store operator, also requires that you be a good manager.
- And what experience demonstrates is that the heart of managing involves having clear objectives, understanding the market, managing your money properly, as well as producing quality products or services.