Module 1: INTRODUCTION
“Module 2: Sales Management to Business Management”
Sales Management vs. Business Management • SALES Management is mainly concerned with maximising the Gross Profit of the business. • BUSINESS Management is wholly concerned with all those things that will maximise the Value of the business.
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
What Factors Dictate the Value of the Business? 1. 2. 3. 4. 5. 6. 7. 8.
Net profit (“Earnings”) Sustainability of Earnings Quality of Earnings Solid growth of Earnings Stability and loyalty of staff Management control Robustness of Infrastructure Good Return on Investment (“ROI”)
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
Value Factor 1: Net Profit • • • • • •
Maximise GP Minimise costs Fixed and variable costs Budgetary processes Life style costs (= “add-backs”) Start keeping a log of these each month – NOW!
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
Value Factor 2: Sustainability of Earnings • • • • •
Client base Client mix Long-term client relationships Staff attraction and retention Quality control systems
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
Value Factor 3: Quality of Earnings • Temp/perm mix • Sector: how economy cyclical, how sustainable? • Strength of Brand • Consistency over time • Show ability to build and retain business
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
Value Factor 4: Solid Growth of Earnings • “Clean” the figures: adjust the add-backs • Consistent, increasing profitability over last 3-5 years • Where this is not the case, clear-cut reasons • Comparison of actual v. budgeted profits for each year © Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
Value Factor 5: Staff Stability and Loyalty • Proven longevity • Good responses to internal attitude surveys • Share options or other retention “hooks”? • History of training and development – IIP? • Promotion from within • Non-financial motivators • Culture, values and beliefs “in the muscle” © Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
Value Factor 6: Management Control • • • • •
Financial management Cash control Budgetary control Structure and discipline Internal (KPI’s) and external measurement (RIB) • Non-reliance on too few people © Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
Value Factor 6: Management Control • Past evidence of planning and achievement
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
Value Factor 7: Robust Infrastructure • • • • •
IT front- and back-office systems Premises Systems and procedures – Manual? Internal control Risk management
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
Value Factor 8: Good ROI • • • •
Management of assets Management of liabilities Cash reserves Prudent accounting policies
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
Constrains to Achieving a Successful Transition • Time issues • Competency issues • Sustainability of Gross Profit stream without you • Support issues • Others?
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
1. Time Issues • • • • •
Don’t take your eye off the GP ball! Prioritise Delegation - let go of the reins! Your time management is well understood Concentrate on your strengths – delegate or outsource the rest
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
2. Competency Issues • • • •
What are the core competencies? What do you lack? Trainable or not? Management v. Leadership (Controlling v. Inspiring)
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
3. G.P. Sustainability Without You • Change management project: why, who, how, when? • Regular monitoring • Agreed budgets and authorities • Don’t “give it away!” – build in triggers for promotion and £ reward
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
4. Support Issues • Are the support personnel in place or promotable? • Create staff development culture – including you! • Contingency plans if your move doesn’t work
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
5. What other Issues? • Think about it and list any you can identify which would apply to you.
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
Action List • What will you change from today’s workshop? • List them while it is fresh in your mind • Identify the timescale for each • List any other constraining issues than those identified in the Module
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
Preparation for next Module • List any questions which have occurred to you while considering this Module • If you have a Strategic Plan, review it and have it to hand for the next Module. • Gather your thoughts on the following: – What are your long-term ambitions for your business? – Are you clear on how you will achieve them? © Romney Rawes. All rights reserved.
Sales Management vs. Business Management • SALES Management is mainly concerned with maximising the Gross Profit of the business. • BUSINESS Management is wholly concerned with all those things that will maximise the Value of the business.
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
What Factors Dictate the Value of the Business? 1. 2. 3. 4. 5. 6. 7. 8.
Net profit (“Earnings”) Sustainability of Earnings Quality of Earnings Solid growth of Earnings Stability and loyalty of staff Management control Robustness of Infrastructure Good Return on Investment (“ROI”)
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
Value Factor 1: Net Profit • • • • • •
Maximise GP Minimise costs Fixed and variable costs Budgetary processes Life style costs (= “add-backs”) Start keeping a log of these each month – NOW!
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
Value Factor 2: Sustainability of Earnings • • • • •
Client base Client mix Long-term client relationships Staff attraction and retention Quality control systems
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
Value Factor 3: Quality of Earnings • Temp/perm mix • Sector: how economy cyclical, how sustainable? • Strength of Brand • Consistency over time • Show ability to build and retain business
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
Value Factor 4: Solid Growth of Earnings • “Clean” the figures: adjust the add-backs • Consistent, increasing profitability over last 3-5 years • Where this is not the case, clear-cut reasons • Comparison of actual v. budgeted profits for each year © Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
Value Factor 5: Staff Stability and Loyalty • Proven longevity • Good responses to internal attitude surveys • Share options or other retention “hooks”? • History of training and development – IIP? • Promotion from within • Non-financial motivators • Culture, values and beliefs “in the muscle” © Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
Value Factor 6: Management Control • • • • •
Financial management Cash control Budgetary control Structure and discipline Internal (KPI’s) and external measurement (RIB) • Non-reliance on too few people © Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
Value Factor 6: Management Control • Past evidence of planning and achievement
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
Value Factor 7: Robust Infrastructure • • • • •
IT front- and back-office systems Premises Systems and procedures – Manual? Internal control Risk management
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
Value Factor 8: Good ROI • • • •
Management of assets Management of liabilities Cash reserves Prudent accounting policies
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
Constrains to Achieving a Successful Transition • Time issues • Competency issues • Sustainability of Gross Profit stream without you • Support issues • Others?
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
1. Time Issues • • • • •
Don’t take your eye off the GP ball! Prioritise Delegation - let go of the reins! Your time management is well understood Concentrate on your strengths – delegate or outsource the rest
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
2. Competency Issues • • • •
What are the core competencies? What do you lack? Trainable or not? Management v. Leadership (Controlling v. Inspiring)
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
3. G.P. Sustainability Without You • Change management project: why, who, how, when? • Regular monitoring • Agreed budgets and authorities • Don’t “give it away!” – build in triggers for promotion and £ reward
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
4. Support Issues • Are the support personnel in place or promotable? • Create staff development culture – including you! • Contingency plans if your move doesn’t work
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
5. What other Issues? • Think about it and list any you can identify which would apply to you.
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
Action List • What will you change from today’s workshop? • List them while it is fresh in your mind • Identify the timescale for each • List any other constraining issues than those identified in the Module
© Romney Rawes. All rights reserved.
“Module 2: Sales Management to Business Management”
Preparation for next Module • List any questions which have occurred to you while considering this Module • If you have a Strategic Plan, review it and have it to hand for the next Module. • Gather your thoughts on the following: – What are your long-term ambitions for your business? – Are you clear on how you will achieve them? © Romney Rawes. All rights reserved.
