WHAT WE DO
We offer a number of services and tools to help companies improve their financial performance
We will work with you to determine which services will best meet your needs. These are the main four areas in which we work.
Pricing for improved profitability
Ultimately, the price you achieve in a pricing negotiation is determined by the way your offering compares to the competition's, and how your negotiating power compares with the customer's. Correct?
Not necessarily. The money you keep often depends not on the headline, or invoice price you achieve but on how well you handle apparently small tactical details like requests for customisation, special service, non-standard warranties and a host of other small items.
Think of it like defending a medieval castle from siege. There is a big battle raging around the front gate, and you feel you are winning, but around the back of the castle the enemy is slowly and quietly dismantling your wall, brick by brick.
This is what often happens in a pricing negotiation. You achieve a good headline price, but lose out on the all the small items: special packaging, out of hours support, guaranteed delivery times, warranties.The list goes on and on. Worse, work by McKinsey & Co found that typically two thirds of all this extra cost is not captured by any accounting systems.
The end result of this is that different parts of your business have very different profitability. Some are probably losing money. Understanding what you are really making and giving away and acting on this can be the easiest, quickest and least risky way of improving profitability.
Do a pricing project with us and you will:
- See where you are really making money, and how to find more of the same sort of business.
- Identify where you are losing money, and put it right.
- Develop a comprehensive pricing model to manage the pricing negotiation, enabling you respond faster to customer requests with greater profitability and less risk of inadvertently making expensive concessions.
- Make more money than competitors with comparable products and comparable bargaining power – without them realising how you are doing it.
- Increase profitability without adding any new customers or new products.
Intelligent cost reduction
You are buying in a competitive market these days, and have a lot of leverage over your suppliers. You can even get consultants in to help you find the best deal on telephone, utility, stationery or a wide range of standard purchases.
What do you do, though, if you have gone through all of these, squeezed your suppliers to the limit, and still aren't making enough money?
This is where cost reduction needs to become truly intelligent.
An intelligent cost reduction project will show you:
- Where the problem is actually the product (it just can't be done profitably), and what to do about it.
- Where the problem is actually the customers (they just can't be served profitably), and what to do about it
- When to stop worrying about what you are spending on something, but instead look at what you are getting from it.
- Where you should be spending more – identifying the spending that really produces results.
- What information you need to manage costs effectively, and how to extract it as simply and cheaply as possible.
- Where further cost-cutting would be the beginning of a vicious circle, so that you avoid this mistake.
In sum, you will find ways of increasing profitability by doing more or less or what you already do.
Product or customer profitability analysis
You know that the 80/20 rule applies to your business just as it does to everyone else's. 20% of your customers or products or marketing channels generate 80% of your profit, and 20% create 80% of your problems.
There are of course two problems in making use of this insight:
- Finding the resources to do the analysis, and, worse,
- Convincing colleagues that the results are valid so that something gets done.
Our view, based on experience, is that it isn't usually necessary to analyse everything in sight, but that some simple commonsense work is often adequate, provided you give proper attention to "selling" the results throughout the organization.
We offer you:
- A pragmatic, economical way of finding out what you want more of and what you want less of, supported by;
- A way of doing the work which builds belief in the results, and hence makes it possible to for you to gain commitment to the changes required.
Cash flow maximization
Cash is king, as they say. At the very least, improving your cashflow will increase your confidence and ability to invest in the business, and the confidence of your bankers and investors.
In the extreme case, it could save you from going out of business, or losing control.
Improved cashflow might even allow you to do without bankers or investors – I once built a company entirely on customers' money.
Improving your company's cashflow goes far beyond making sure you collect receivables on time. There are cashflow implications to every stage of the business process, from making the sale, to delivering, through to invoicing. Do a cashflow project with us and:
- If you have problems with receivables, you will understand why, and what to do about it, and how to get everyone committed to your plan of action;
- You will find ways to improve cashflow by changes to the way you contract for business, replacing expensive funds from banks or investors with cheap funds from customers
- You will see which parts of your business soak up cash and which generate it, and what to do to improve the overall picture.