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If you are thinking of buying a patisserie coffee shop you should have the financial figures reviewed before you buy. This is because you need to be sure the numbers stack up. Buying a business is a big decision and needs to be given due respect. There can be significant financial consequences from making a poor decision
It’s the classic business dilemma; do we save our nuts like squirrels to get through the winter, or do we plant the seeds and prepare for a good harvest?
Keep the money you have in reserve
Reduce all costs
Defer all big expenditure
Cut all non-essential spending
Clear out your inventory
Sell unused assets
Cut staff hours
Then use cheaper staff
Find lower cost supply chain alternatives.
Increase advertising and promotion
Invest in marketing and sales
Increase brand awareness
Improve your website and online presence
Always keep promoting
Look for cost effective mediums
Continue to engage with your customers
Encourage loyalty purchases
Develop new products or services
Engage with your supply chain
Improve your online offering
Look for another business to buy
Buy specific assets
Find profitable add-ons
Seek out lower cost providers
The question really is, how will you position yourself to come out the other side?
Be smart during this time of lockdown and restrictions. Be on the lookout for new opportunities, to grow, develop and improve.
Let me know if you need a hand
Peter
With COVID causing an increased awareness of health issues and consumers conscious of what they’re eating, we see steady inquiries from people looking at health food franchises.
Location is key – will it be high street or shopping centre?
What incentives will the landlord provide?
What is the foot traffic, or passing trade?
What will the rent be?
Expected timeframe to open?
Expected up-front costs – total?
Will you need finance?
If so, can you get it and how much?
Expected ongoing costs, operational and franchise fees?
What will Cost of Goods Sold % be?
Staffing numbers and wages costs?
What marketing assistance will be provided?
How will the franchisor help you grow your business?
What are the demographics of the local area?
Do they represent your target client?
How much money do you want to make?
Can this franchise business model allow you to make that?
What is the expected payback on your investment?
Are you excited about this opportunity?
Is this the best option for you right now?
Buying a franchise is a big decision and will have big financial consequences on your life. So, get a pre purchase review before you fall in love with it!
Send me a message via Contact Us and we’ll get straight back to you to get started.
Peter
Surely the best ‘cross sell’ line ever!
The beauty is in its simplicity.
It’s more than just a question, asking the customer to buy more.
“You want anything else?” would’ve done that.
It’s a ‘suggestive’ cross sell.
Suggesting the product for us to buy.
Enticing us.
Teasing us.
Of course we want the fries!
We want the fries in winter.
We want them in summer.
I’ve seen people scooping their ice cream with those fries!
And that’s the second part of the magic.
The fries themselves.
We didn’t even call them ‘fries’ before that.
And they're called French Fries!
As if there's something special about the way the French deep fry their potato!
But once we’d tasted them, we were spoilt for life.
The mere mention of the word ‘fries’ would make us salivate.
(Apologies to Pavlov and his dogs).
But the fries had to be so good they would actually work as a cross sell.
As an add-on.
That they could deliver on their promise.
Every time.
But even when they don’t, we fall for it again the next time they ask us.
Hoping for that crunch.
They’ve done the hard work.
They got us to the counter.
Now to make the most of it while they’ve got us.
Genius.
But now to the point of this post.
What’s your cross sell?
What are you suggesting?
What are you promising, knowing you can deliver..
Every time?
Let me know if you’d like to discuss this further
Peter
Forecasting sales for the month ahead is always tricky, but even more so in these COVID times.
Here’s an approach which may assist:
Look at Sales Revenue for July
Compare to May and June
Recall the events of July, anything significant which might be ‘one off’? e.g Lockdown?
Consider any upcoming events which might impact August sales
Will they have a positive or negative impact on Sales?
Review the marketing activity planned for August
What impact do you think they will have?
What lessons have been learned from the year so far?
Factor these into your forecast.
An excellent way to ‘stress test’ this forecast is to compare it against your Breakeven Point for August
To do this, follow these steps:
List all of the expenses coming up for August
Many of these will be known (rent, leases)
Others will need to be estimated
Include wages for yourself
Once you have a full list, gross this figure up by your Gross Margin (%).
This is your Sales Breakeven Point
This is your Sales Target which you MUST hit to cover your expenses
Anything less than this and you are losing money
Compare this against the forecast above and adjust if necessary
Both of these approaches will assist in your forecasting.
Let me know if you need a hand
Peter
This is to cover Jobkeeper fortnights which ended during July.
These are Jobkeeper Fortnight 7 (22 June – 5th July) and Fortnight 8 (6 July – 19 July).
Be sure to nominate the number of eligible employees you are claiming for in each Fortnight. Also advise if any employees have come or gone during the month, or are no longer eligible.
Please note - you must have actually paid them $1,500 per fortnight to be eligible.
Declare the GST turnover for your business for July, 2020 and also your projected GST turnover for August 2020.
Also, remember that in order to claim JobKeeper payments for the August JobKeeper fortnights, you must enrol for JobKeeper and identify your eligible employees by 31 August.
Let me know if you need a hand.
Peter
Small business owners hate meetings. Think they’re a waste of time. They’ve got too much to do and can’t just sit around talking sh*t!
We agree!
But monthly meetings are actually a really important way to keep control over your business and know where things are up to. The key is to keep them tight and focused.
So, let’s just focus on the essential things that must be covered. Should take no longer than 2 hours per month.
Set a regular time, no variations
Owners and key managers must attend.
Have a standing Agenda. Like the one below
OVERVIEW
Overview of the month so far
Review Action Items from last meeting
What’s the biggest issue for the month ahead?
FINANCE
Profit & Loss last month
Profit & Loss year to date (compare to Budget)
Cash flow forecast for next 3 months
Accounts Receivable
Accounts Payable & upcoming bills, incl BAS
& Super
MARKETING
Marketing activity for next month
Avg Sale Value
Customers gained / lost
Conversion rate
(Other KPI’s relevant to your business, eg sales
meetings, proposals issued, closed etc)
OPERATIONS
Work in progress
What’s working, what’s not, areas to improve
HR issues
(Identify key Ops issues relevant for your
business)
ACTIONS
Review any actions agreed throughout meeting
Confirm
who is to do it
what is to be done
when is it to be done by
Set and agree time for next meeting
Business meetings are a fundamental component of good business management. Many times they get missed just because people get busy. Not because of lack of intent.
But one of the best ways to be sure you’ll have your meetings is to engage someone to act as Chairman, or Facilitator, or Business Coach.
That’s where we come in. We have years of experience in chairing business meetings, and holding business owners to account. If that’s something you think you might find worthwhile, then give us a call, or shoot me an email.
Peter
Over the last few weeks, we’ve had an increase in enquiries for handyman franchises. This seems to be for two reasons:
COVID-19 redundancies. People are looking for a low entry cost business to generate income
WFH. With more people Working From Home, there has been increased demand for home office fit-outs, shelving, desks, benches, bookcases, etc.
Also, with more time spent at home, people have had more time to look around and see all the odd jobs that need to be done!
So, before you dive in and sign up for that handyman franchise, here are some things to consider:
Are you a ‘handy’ person? Good with you hands and tools?
Do you like dealing with people?
Are you comfortable making sales and building your business?
What are the upfront costs and ongoing fees?
What is the expected profitability?
How long will it take to Payback your initial investment?
Talk to other franchisees about their experience
Understand how you get leads – from head office or find your own?
What systems and training is provided?
Are there restrictions on territories and ‘out of territory’ work?
These are some initial questions to get your thought processes started. Once you get more information you’ll be able to dig deeper and find out more about the particular franchise.
And be sure to get a franchise Pre purchase Review!
Let me know if you need a hand
Peter
That’s why many put it off and prefer not to look! Yet, it’s something that has to be taken on and dealt with.
Amazing as it sounds, there are many business owners who simply don’t know how much they owe. They might have a general idea of their regular expenses, like wages and rent, but after that it all gets a bit hazy.
At best, for some it might be a list of Aged Payables. But this often only includes Trade Suppliers.
But what about a list of ALL amounts owed? We like to see all of the amounts owing to show up in the Accounts Payable listing. It’s the best way to capture ALLamounts owed.
This includes all monthly financial commitments (eg lease payments, rent etc) as well as trade suppliers.
To be complete, this should also include the ATO and super owing.
For the ATO, split this between GST, PAYG for wages and any PAYG instalments owing.
Super owing needs to be added to this as well. Current super as well as any owed from the past.
As one client we spoke to last week said, “I guess I’d rather know than not know.”
Now, more than ever, business owners need to be on top of their financial position. By getting a clear understanding what you owe you are in a strong position. That’s because you can set the plans to generate the income to cover these costs.
If you don’t, you’re flying bling. And disaster awaits!
Let me know if you need a hand - this is an area we’re particularly skilled in
Peter
