Planning For Success
Profit Accelerator is Step 1 in the 3-Step Business Development Program. We can help you through this step, or you can do it yourself by visiting Profit Accelerator.
“Business owners do not plan to fail they simply fail to plan”, and so true. Profit Accelerator is a unique planning tool developed by Fred.
Planning for Success
The BGA-Calculator will establish a financial Revenue target for the next year, combined with monthly activity goals. Knowing exactly what activity is required each month provides a clear path to success.
The Revenue target will be based on several factors, explained below.
But first, people are in business to make money. A business provides income to the owner by;
- Owners Income – A wage, salary or drawings
- Business Operating Profit – Paid as a dividend.
However, some business operators may only set an Operating Profit goal.
Note: Operating Profit represents business performance.
It is the performance of the business which determines the value of the business, creating a valuable asset which one day the business owner may wish to sell (exit strategy).
To establish annual and monthly Revenue goals that include increases in Owner Income and Operating Profit, the following information will be factored in;
- Monthly costs to run the business (Expenses).
- Inflation adjustment.
- If a Franchise, the Franchise Fees.
- Average Gross Profit Margin as a percentage.
- Spare Capacity analysis to gauge a possible increase in capacity to handle additional business, which may require setting a budget to increase business capacity.
- Marketing analysis to gauge the need to increase the company’s marketing budget.
Once the above have been applied, the business owner/manager will know what is required to achieve their business goals, see below;
- Revenue required, annual and monthly.
- Total Gross Profit in dollar terms.
- Franchise Fees to pay (if the business is a franchise).
- Number of Leads or Selling Opportunities (retail) required, monthly.
- Number of Quotes required to present to potential customers (if this is part of the selling process in your business), monthly.
- Number of Sales required, monthly.
So rather than just setting a Revenue target per month, or per annum, this process provides the numbers required to achieve the Revenue target.
Business Planning does not stop with the above.
After all, business growth is not just about selling more to increase Revenue. Business growth is also about improving the performance of the business – to make it easier to increase business Revenue and profitability.
The BGA-Calculator will also allow you to set goals for key Business Turnover Drivers.
It isn’t difficult. The Business Development Report will provide some ideas as to how to achieve your Turnover Driver Goals, however, we can help you through this process.
This process then leads to Step 2, which is to develop an Action Plan, to achieve the goals and activity targets set by the BGA-Calculator.
The BGA-Calculator Business Planning tool has proven itself to be a game changer.
As with any road map, if you know your destination, then all that is required is a path to follow.
Contact us for more information or a ‘discussion of possibility’.