balance as a primary business strategy 2009
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Copyright 2009, Morgan Marketing Solutions, Inc.
Balanceas a
Primary Business Strategy
Balanceas a
Primary Business Strategy
Richard P. Morgan CMC, FIMC
Morgan Marketing Solutions, Inc.
April 2009
Copyright 2009, Morgan Marketing Solutions, Inc.
Why Balance?Why Balance?
“A business that is seriously out of balance cannot sustain profits, growth,
or customer satisfaction in the long-term.”
Richard P. Morgan CMC, FIMC in Marketing Facets
April 2009
Copyright 2009, Morgan Marketing Solutions, Inc.
What to BalanceWhat to Balance
Balance Functions• Marketing & Sales• Finance & Administration• Operations & Distribution
April 2009
Copyright 2009, Morgan Marketing Solutions, Inc.
What to BalanceWhat to Balance
Balance Functions• Marketing & Sales• Finance & Administration• Operations & Distribution
Balance Resources• Physical Resources• Financial Resources• Human Resources
April 2009
Copyright 2009, Morgan Marketing Solutions, Inc.
Examples of Balance LostExamples of Balance Lost
• Lack of working capital limits growth and profit– Loss of supplier discounts - lower margin– Low marketing & employee investments
• Physical capabilities too small for volume of business– Client service complaints, quality problems, lost customers
• Not enough capable employees to properly handle clients– Client service complaints, quality problems, lost business
• Over-investment in facilities or employees without added sales– Greater interest & depreciation or higher payroll expense kills operating
profit level
April 2009
Copyright 2009, Morgan Marketing Solutions, Inc.
Some Signs of BalanceSome Signs of Balance
• Great reputation• Sales growth• Good cash flow & bank relationship• Cash discounts taken• Low employee turnover• Active inventory turns• Accounts receivable DSO• Payments current• Fixed assets maintained• Employee benefit plans, sponsorships• Growing client base, few complaints • Good operating profits & a happy owner!
April 2009
Copyright 2009, Morgan Marketing Solutions, Inc.
How to Maintain BalanceHow to Maintain Balance
• Create a useful financial model to help you analyze results and make better business decisions.
• Keep your eye on the ball!
• Develop a real operational business plan.
• Obtain outside facilitation of the planning & implementation process. Gain accountability.
April 2009
Copyright 2009, Morgan Marketing Solutions, Inc.
Operating StatementsOperating Statements
• Maintain current operating statements!• Study your statements in detail. Clear picture.• Break out variable costs vs. fixed expenses correctly• Use statements as a real management tool• BE analysis can act as a great decision tool• Check the impact before making the plunge
April 2009
Copyright 2009, Morgan Marketing Solutions, Inc.
Financial ModelFinancial Model
• Only three factors determine BE and level of profit– Level of sales revenue– Variable cost to you of your products & services– Your fixed expenses of doing business
• Infinite number of ways the three factors interact
• Left alone, all three factors go in the wrong direction!– Customers go; suppliers raise prices; expenses increase
• Cope with constant change.
• You must actively manage and balance the factors!
• Refer to the model on page 3 of article. Walk through.
April 2009
Copyright 2009, Morgan Marketing Solutions, Inc.
Keep your eye on the ball!Keep your eye on the ball!
• Chairman attended monthly management reviews.Harvard MBA with years of experience.
• Grueling meetings, all day, detailed• He listened but remained quiet until the end. When
asked, he would make short, pithy comment.• “Boys, you let events distract you last month. You
took your eye off the ball. Focus on what’s important and better results will follow.”
April 2009
Copyright 2009, Morgan Marketing Solutions, Inc.
Develop a Business PlanDevelop a Business Plan
• Operational business plan is aimed at action• You and your management team must build the plan• Get expert help the first time to facilitate the process • All hear the same things. All contribute. Bond.• Vision, mission, resources, measurable objectives• Situation analysis – internal & external• Competitive analysis – Comparative SWOT• Action plans – dates, coordinators• Contingency plans• Periodic implementation reviews to keep on track
April 2009
Copyright 2009, Morgan Marketing Solutions, Inc.
The Other Balancing ActThe Other Balancing Act
• Business
• Personal
• Family
Can you have a life without sacrificing your business?Can you have a successful business without sacrificing your life?
Personal Business Family
April 2009
Copyright 2009, Morgan Marketing Solutions, Inc.
Where are you?Where are you?
• Can you truly make these statements?
• “I’ve got up-to-date business and personal plans in place to accomplish my specific goals…”
• “I’ve balanced my business, personal, and family needs.”
• “I’ve taken care of my family, my employees and myself.”
• “I’ve got all my bases covered.”
April 2009
Copyright 2009, Morgan Marketing Solutions, Inc.
Contact InformationContact Information
• Richard P. Morgan CMC, FIMCMorgan Marketing Solutions, Inc.Two Galleria Tower, Suite 1000813455 Noel Rd, Dallas, TX 75240
telephone 972.931.7993 e-mail [email protected]
“We help leaders tackle major issues and become better marketers, using a holistic business approach.”
April 2009