Don’t take your eye off the ball
Great article by Franchise Accountant – Peter Knight
Quote of the week from a new client…
“I guess I took my eye off the ball..!”
(Err… understatement of the week)
Eighteen months ago they were making profits.
Then things turned.
For the worse.
– Decisions were being made without deep consideration of the longer term impact.
– Debt was taken on to allow for expansion, without sufficient planning.
– The owner of the business started taking more time away from the business, leaving the day to day running to a new manager.
– The results are now obvious.
It’s easy with hindsight to see the impact of these decisions. Now we’re in a fight for survival.
Action points arising from the meeting I’ve just had with this client:
– Owner to cease drawing a wage for the next 12 months.
– Owner to cease having personal expenses paid for by the business.
– Drop one highly paid manager.
– Renegotiate with the bank.
– Renegotiate with the landlord.
– Focus on increasing sales.
– Find alternative sources of income.
This has all happened within the last 18 months. That’s how fast things can change.
Lesson to be learnt: Don’t take your eye off the ball.
#business #sales #planning #bank #change #smallbusiness #smallbusinessowners #franchise #franchisebusiness
Great insight By Michael Murray FCA
Was a deep analysis done on the P&L, variable cost have been steadily creeping up on businesses over the past few years. Most of the proposed solutions seems to be on fixed cost. High Cost of Sales can be the death of most SME especially if they keep prices steady….
Ivan Kaye comments
Maybe a solution is
—— to upskill employees to be great leaders
…. Have a clear business model and formula that works
—— hire the thriftiest and best – Reward team for performance of Botton line – make sure rewards are in line with shareholders – bonuses in line with dividends and growth Kpis
Analyse why the profits went down