business leaders workshop - focuscfo
TRANSCRIPT
Business Leaders Workshop
Mike Derringer614-378-8600
Tom Thon614-419-4068
Most roadblocks, stalls, and objectionsyou face have evolved from
interactions with the buyerand are not necessarily tied to a particular
facet of your product or service.
©2020 Sandler Systems, Inc. All rights reserved. S Sandler Training (with design) and Sandler are registered service marks of Sandler Systems, Inc
Challenge:Put these typical SELLER steps in order.
HandleObjections
NeedsAnalysis
Follow-Up
Close(or attempt to)
Present /Proposal
©2020 Sandler Systems, Inc. All rights reserved. S Sandler Training (with design) and Sandler are registered service marks of Sandler Systems, Inc
Typical Seller Order:
NeedsAnalysis
Present /Proposal
Close(or attempt to)
HandleObjections
Follow-Up
©2020 Sandler Systems, Inc. All rights reserved. S Sandler Training (with design) and Sandler are registered service marks of Sandler Systems, Inc
Challenge:Put these typical BUYER steps in order.
AvoidCommitment
ExpressInterest
ObtainInformation(from salesperson) Disappear
ActMotivated
©2020 Sandler Systems, Inc. All rights reserved. S Sandler Training (with design) and Sandler are registered service marks of Sandler Systems, Inc
Typical Buyer Order
AvoidCommitment
ExpressInterest
ObtainInformation
DisappearActMotivated
©2020 Sandler Systems, Inc. All rights reserved. S Sandler Training (with design) and Sandler are registered service marks of Sandler Systems, Inc
The Buyer/Seller DanceAvoid
CommitmentExpressInterest
ObtainInformation Disappear
ActMotivated
HandleObjections
NeedsAnalysis
Follow-UpClose(or attempt to)
Present /Proposal
EDUCATEDBUYER
FRUSTRATEDSALESPERSON
©2020 Sandler Systems, Inc. All rights reserved. S Sandler Training (with design) and Sandler are registered service marks of Sandler Systems, Inc
Who is Leading theBuyer/Seller Dance?
©2020 Sandler Systems, Inc. All rights reserved. S Sandler Training (with design) and Sandler are registered service marks of Sandler Systems, Inc
What Happens When theBuyer is in Control?
©2020 Sandler Systems, Inc. All rights reserved. S Sandler Training (with design) and Sandler are registered service marks of Sandler Systems, Inc
Sandler Philosophies
©2020 Sandler Systems, Inc. All rights reserved. S Sandler Training (with design) and Sandler are registered service marks of Sandler Systems, Inc
The role of the salesperson is to createan atmosphere and environment which
allows the customer to buy whilethe salesperson stays out of the way.
©2020 Sandler Systems, Inc. All rights reserved. S Sandler Training (with design) and Sandler are registered service marks of Sandler Systems, Inc
©2020 Sandler Systems, Inc. All rights reserved. S Sandler Training (with design) and Sandler are registered service marks of Sandler Systems, Inc
Sandler Rule:Hard selling is good for one thing… hard pushback.
©2020 Sandler Systems, Inc. All rights reserved. S Sandler Training (with design) and Sandler are registered service marks of Sandler Systems, Inc
SandlerSellingSystem ®
©2020 Sandler Systems, Inc. All rights reserved. S Sandler Training (with design) and Sandler are registered service marks of Sandler Systems, Inc
Building theRelationship
©2020 Sandler Systems, Inc. All rights reserved. S Sandler Training (with design) and Sandler are registered service marks of Sandler Systems, Inc
Qualifying theOpportunity
©2020 Sandler Systems, Inc. All rights reserved. S Sandler Training (with design) and Sandler are registered service marks of Sandler Systems, Inc
Closing the Sale
SandlerSuccessTriangle
©2020 Sandler Systems, Inc. All rights reserved. S Sandler Training (with design) and Sandler are registered service marks of Sandler Systems, Inc
SUCCESS
What is at the Summit of Your Mountain?
Business Value - Transaction Execution§Succession planning§Transition to Next Generation§ESOP, Leveraged Recap or
Management Buy Out§Continue to run with Management
Team§Shut it down§Estate Planning
Value
Growth
Health
Foundation
How Do You Begin to Climb the Mountain?
Start at the bottom and take one stage at a time
Foundation
Health
Growth
Value
Business Owner’s Journey Value Enhancement Pyramid
Foundation
Foundation Level- Close books monthly- Tax Planning- Payroll- Accounting reports- Compliance Issues- Communicating with bank- Professional relationships
established with CPA, Attorney, Banker
Have Great Advisors & Over Communicate With Them
• Advisory Board• Attorney• Banker• Business Coach
• CPA• Financial Planner• CFO/Fractional CFO• Sales Coach
Get your team and be proactiveand not reactive with them
Health
Health Level
- Positive Cash Flow from operations- C.O.A.R management systems- Forecasting & Budgeting- Knowing where cash hides- What are healthy sales?- KPI’s that are timely!- Looking forward, not backwards- CFO
COAR - Four Systems Every Business Owner Needs
Issue• Am I going to run out of cash?
• What is happening today/tomorrow?
• What happened last month?
• What is happening 3 months from now?
System• Cash Flow
• Operating
• Accounting
• Revenue
Survey of Business OwnersImportance in running day to
day (ranking)
1. Cash flow system
2. Operating system
3. Accounting system
4. Revenue system
% that have and actually use them
8%
35%
100%
14%
Cash vs Cash FlowThere are only three places for a business
to get cash…
Investor Bank Business
… every business has the ability to optimize its own cash flow
13 Week Rolling Cash ForecastYour Company NameSummary Cash Flow ProjectionRolling 13 weeksJuly 15, 2020
Week Ending
Week ending =======> July 17 July 24 July 31 Aug 7 Aug 14 Aug 21 Aug 28 Sept 4 Sept 11 Sept 18 Sept 25 Oct 2 Oct 9
Beginning Cash Balance $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
CollectionsCash Collections - - - - - - - - - - - - -LOC draws - - - - - - - - - - - - -
Total Collections - - - - - - - - - - - - -
DisbursementsCurrent payables - - - - - - - - - - - - -Future expenses - - - - - - - - - - - - -Payroll - - - - - - - - - - - - -Interest payments - - - - - - - - - - - - -LOC repayments - - - - - - - - - - - - -
Total Disbursements - - - - - - - - - - - - -
Net Change in Cash Position - - - - - - - - - - - - -
Ending Cash Position - - - - - - - - - - - - -
Available LOC - - - - - - - - - - - - -
Liquidity $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
ABC Company13 week cash forecastBase case (with moderate slow down) scenario
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Weeks
17-Jul 24-Jul 31-Jul 7-Aug 14-Aug 21-Aug28-
Aug 4-Sep 11-Sep 18-Sep 25-Sep 2-Oct 9-Oct 16-Oct
Beginning of week cash position (360) (360) (385) (310) (335) (260) (285) (210) (235) (160) (185) (110) (135) 65
Payroll (100) (100) (100) (100) (100) (100) (100)
Payables (after reductions put in place) (150) (50) (50) (50) (50) (50) (50) (50) (50) (50) (50) (50) (50) (50)
Collections 150 125 125 125 125 125 125 125 125 125 125 125 250 250 Assumes slow collections for 12 weeks, then normal
End of week Cash position (360) (385) (310) (335) (260) (285) (210) (235) (160) (185) (110) (135) 65 165
13 Week Rolling Cash Forecast
Not All Sales Are HealthyExamples of unhealthy sales:
• Too much revenue from one customer• Not enough revenue from one customer• Gross margin is too low to cover your overhead costs• Sales commission exceeds gross margin• Client pays too slow (AR days)• Orders cause too many disruptions• Inventory levels not correlated with sales (Inv turnover)
How to know if you have healthy sales ?• First, get the data• Sales by customer• Sales by salesperson• Margin by customer• Accounts Receivable
• Second, look for trends/problems• You might be surprised at what you will find
Healthy SalesImprove
Gross MarginIncrease
Sales / Day Change
Financial Summary
Sales $5,280,000 $6,336,000
Operating Profit 306,800 626,240
Operating Profit (%) 5.8% 9.9%
Bank Debt Balance $1,296,986 $793,258
Annual Cash Flow from Operations $182,199 $1,198,760
Health Indicators
Inventory Turns (#) 4.0 6.0
Inventory Balance $852,000 $572,000
Accounts Receivable Days (#) 60 45
Accounts Receivable Balance $825,000 $660,000
Gross Margin (%) 32.5% 34.0% +1.5%
Sales per day ($) 22 days/mo $20,000 $24,000 +20%
10 Keys to a Healthy Business
1. There Area Only Three Places to Get Money
2. Know Where Cash Hides
3. Understand How Debt Works
4. Understand Financial Reporting vs Management Info
5. Four COAR Systems
6. Not all sales are Healthy
7. Choose Your Financial Strategy
8. Cash Flow From Operations
9. Have Great Advisors and Over Communicate with Them
10. Look Forward not Backwards
Growth
Growth Level
- Scaling the business- Right Systems and monitors/KPI’s - Unkink the hose, what are the constraints?- Sales Management- Operational efficiencies- Business or Sales Coach, or - Advisory board
Revenue Funnel
New Opportunity
Initial Communication
Fact Finding
Develop Solution
Propose Solution
Solution Evaluation
Negotiation
Purchase Order
Value Level
- Systems in place to run the business- Knowledge transfer has occurred- Succession plan in place- You are not needed- Investment Banker, Exit Planner
Value
VALUE REALIZATION TEAM
4
ADVISORS, COACHES, SPECIALISTSü Strategic planningü Growth strategiesü Leadership development
3
CFOü Forward looking and proactiveü Internal financial sophisticationü Business analysis and planning
2
ATTORNEY, BANKER, CPA, TRUSTED ADVISORü Key Business Informationü Tax planning and external reportingü Legal, Banking, Payroll, Insurance
1
ü Succession planningü Business transitionü Transaction execution
Business Owner’s Journey Value Enhancement Pyramid
Foundation
Health
Growth
Value
Business Leaders Workshop
Mike Derringer614-378-8600
Tom Thon614-419-4068