Archive for the ‘Logistics’ Category

Business owners and entrepreneurs plan their business to make it the best. The decisions they take now can affect the running of the business in the times to come. But, what seems important out here is that simply wearing the robe of a successful business owner would not do anything good or great. Neither would it seem enough to build the business that has huge profits pouring in. All what you need out here is smart exit strategy.

Having a smart exit strategy helps in overcoming the potential threats to your business in any kind of unfavorable conditions. Speaking in the present sensitive business environment, exit strategies play an indispensable role for all kinds of businesses.

It is very true that more or less a business owner should have an effective business plan. It is similar in manner where you eat only when you feel the urge. And if you have the urge you’d also feel the taste of the food you eat. Now, at some point in time you intend to sell your business, and venture into a new one. It is here that you need to make a calculative move to clearly define your exit strategy that would work for you. Likewise, your business operations should always remain in conjunction with your business plans.

So, you have got the real track how exit strategies are important for you. It is the reality to see that the business you own or run today might not provide you with strong assets and cash tomorrow, or it may happen that over a period of time you get bored with the type of the business you are presently running. Anticipation is need of the hour to adapt your exit strategy. Rightly speaking, you have to think about your retirement plan, how to sell your business, and how to ensure business continuity.

Just think for a second… who’d run your business if you are absent from the scene. What value would your business hold, or plainly speaking; will it hold any value at all?

Exit Strategies for Your Business

There are traditional and contemporary exit strategies that can really prove helpful for your business motive.

Traditional Exit Strategies

• Transferring the business to next generation. This would save your business from moving on to outsiders.

• Every business owner should have a buy-sell agreement, which allows smooth selling of business to the partner or an executive in case of owner’s uncalled death. In case of sole proprietorship or where the business is run by one-man or one-woman corporation, the business passes on directly to family member or any other close relative.

• Selling the business in the event where business profits have moved down.

Contemporary Exit Strategies

These are alternative and viable contemporary exit strategies that provide more leverage and are conducive for the business owners’ interests:

• Developing a business which is specifically aimed for sale to another business entity such as a competitor.

• Hiring management above the in-house management, and which runs under the guidance of the business owner. This would allow many flexible exit strategies vis-à-vis selling the business to any third party, passing the business prospects to next generation or directly selling your business to the management.

• Mergers are also an optional exit strategy. Here two companies merge together in order to enhance the growth, development and diversification of the business.

Now that you have a fair idea about some available exit strategies, it is important that you be aware about the risks involved in implementing any exit strategy. The risks need to be carefully studied in the current market scenario. Remember that you should also be extremely wary about mistakes too.

Major Problems Associated with Exit Strategies

There are two elementary problems that are associated with the exit strategy. These include:

• It is not possible every time to have a smart and a working exit strategy that would work well with other goals, objectives, and operations of the business.

• Exit strategies go wrong if you have wrong people associated with you. These wrong people can be in the form of wrong management, wrong employees, wrong employers and wrong co-owners, and wrong buyers.

Therefore, while planning exit strategies, you should have a concrete and a professionally documented business plan in right order. When needed, the plan can be reviewed by the financial advisors, management consultants financial planning advisors etc. to get a fair idea about the working of the business processes.

How Can you Avoid Mistakes in Exit Strategies

Listed below are some of the don’ts that you need to be very careful of while going for any exit strategy.

• Don’t persuade any employee of your organization to own a part or full business, unless, you are not sure about his financial stability, and that he’s genuinely interested in buying your business. Ultimately it is you who have to bear the consequences if the co-owner fails to make the commitment, or breaks it for that matter.

• It would not be a good exit strategy to consider merging your business entity with another business, unless you are confident that the management of the other company is willing to enter into a firm commitment.

• There are tax consequences of selling your business to the acquirer. It is because a business sale is usually connected with huge amounts of money.

Wronged on Exit Strategies: The Mistakes Made by Management

Here are some of the management mistakes that can really affect the exit strategy. These mistakes include:

• Maintaining no records, books, and other principle material necessary for the review and evaluation purposes.

• Lack of any proper management structure that can prove helpful to the co owner who can even run the business even in your absence.

• You are considering exit strategies as the half hearted ways to sell off your business.

Remember! As the part of exit strategies, there are also plenty of both short- and long-term insurance and financial instruments available in the market. Theses include, Fee-Based Financial Planning, Securities Brokerage, Money Manager Referral Programs, Mutual Funds, REITs and many more. Look for the qualitative professional exit strategy solutions streamlined at Khanstellation Group, Inc. (KGI). Being a full service organization, you have intelligently designed exit strategies for your business, right here!

At KGI, we offer working plans which provide you with executive compensation planning, business continuation planning, and employee benefits.

What clearly and simply explains the term metrics!

This is essential before you actually go into the details of your business and marketing potential. Metrics is correctly defined as a measurement tool in judging performance and quality of a process. In addition, it also involves identifying the problems that occur in the process. A good metric is also synonymous with generating a Quality Lead.

There are separate uniquely classified metrics for businesses and specifically sales. A business metric would allow you to gauge the company’s performance, revenues, Return on Investment (ROI), and employee or customer performance. On the other hand, a critical sales metric would include, identifying best salesperson and checking out which product lines have more sales. Most importantly, sales metrics also helps in evaluating a true figure for your Return on Investment (ROI).

When you create something for marketing purposes, you should delineate a set of goals that will help you increase sales and business profits. You know that even the most innovative marketing metrics fail when you get out there with an undefined market for a product or a service. Have you ever thought why it happens, or why it should happen at all!

There are some basic principles that go with marketing. It’s similar to making curry. If you ad the right ingredients in the right proportion, it’s a pleasurable experience, or else you’d be throwing it in the trash. Keep these three essential principles in mind and make a calculated move forward.

Principle -1 – Remain CONNECTED! While developing a marketing strategy keep your focus on the things that are essential to fulfilling your goals and objectives.

Principle -2 – Do the ACTION – Procrastination is something that makes the salesperson fall behind in achieving sales targets. A good salesperson is the one who remains focused, and learns from mistakes. Boost your inner self and get into action!

Principle -3 – Be PREDICTABLE – Yes! When you launch any product/service in the market; study the cause and effect relationships under prevailing market conditions to understand what factors drive sales.

Now, that you have got these three principles in your mind, it is important to set goals straight forward. You don’t need to carry forward in haste.

The Five Sales Metrics

• Lead Generation – A lead is generated on the basis of the awareness of the product/service and how much interest the product/service can meet the demands in the market with requests for information.

• Query Generation – Here, customers upon seeing the product/service would come to inquire about your product and/or services. A query generation metric clearly showcases that the customer is interested in the product, and would like to know more about the product.

• Churn Rate – This shows the amount of customers going buying your product or service. Any change in market conditions can also increase or decrease the churn rate where sales might increase or decrease accordingly.

• Customer Life Cycle – Here it is to be seen what a customer does as he or she progresses through the stages of considering, purchasing, using and finally maintaining the loyalty to the product. If a maximum number of customers have finally developed a high sense of loyalty equating to consistent sales revenues, it means that marketing efforts were successful.

• RFM or Recency, Frequency, Monetary – This makes a firm analysis on the amount of customers who would purchase product, based on the Recency factor. The analysis essentially counts on the popular maxim – “80% of your business comes from 20% of your customers.”

The very importance of metrics cannot be undermined in relation to marketing strategies and evaluating multi-channel marketing activities. Whether it is an online marketing campaign or any offline marketing strategy, you need to analyze and examine the key metrics, which can help you develop and put into action the relevant corrective marketing initiatives to promote and sell your products and services.

Therefore, the role of marketing metrics is sensible for producing the blue print of a commercially viable cost effective marketing campaign, while providing an effective means to measure expense versus returns.

But, metrics themselves cannot yield good results unless you have your goals and objectives correctly aligned with your marketing activities. You need to think thoroughly through the questions that need to be measureme and with what tools will help influence your business and marketing goals and objectives in a positive manner.

Remember! You have to set your goals and objectives separately and it is here the success of a meticulous metric system lies.

Therefore, while summing the power of metrics for making calculated business strategies, you should have the following points running in through your mind:

• Metrics help in obtaining potent business results.

• Metrics help in gaining good business results.

• Metrics is a worthy process that helps in calibrating any kind of marketing strategy accurately, consistently and most importantly, cost effectively.

For marketing personnel, it is extremely important to write down and conform strictly to some diagnostic methods for fine tuning their business and marketing strategies successfully, even in the most competitive of environments. Metrics measure the different stages in marketing. There are different metric tools designed for infant early stages of marketing, adolescent stages of marketing development, and finally maturation of marketing development.

The Overall crux about the use of marketing metrics is that you need to make it more target oriented after assessing your business, organizational, and marketing goals associated with your defined objectives. What’s more, there are several other factors that are worth considering while establishing the purpose of marketing metrics. These include:

• How do you make the balance between offline and online marketing campaigns?

• Do you have a niche marketing objective designed for yourself?

• Are you ready to accept the markets challenges?

• Do you know primary and secondary competitive advantages in your business?

• Are you aware about the ongoing internal and external market forces?

• What are the industry benchmarks for the products that you intend to market?

Whether it is business metrics, sales metrics, or marketing metrics, you need to follow metrics stringently. Khanstellation Group, Inc. (KGI) has the ability and the intellect to design metrics useful for sales, marketing or business motives. At KGI, we undertake risk free management decisions, and mission-critical development processes to give our clients ideally the best business solutions.

Suppose a profitability analysis reveals that the company is earning poor profits in certain products, territories, or markets. Are there more efficient ways to manage the sales force, promotion, and distribution in connection with these marketing entities?

Some companies have established a marketing controller position or hire outsourced help to improve marketing efficiency. They examine adherence to profit plans, help prepare brand manager’ budgets, measure the efficiency of promotions, analyze media production costs, evaluate customer and geographic profitability, and educate marketing personnel on the financial implications of marketing decisions.

Sales Force Efficiency

Sales managers need to monitor the following key indicators of efficiency in their territory:

• Average number of calls per salesperson per day

• Average sales call time per contact

• Average revenue per sales call

• Average cost per sales call

• Entertainment cost per sales call

• Percentage of orders per 100 sales calls

• Number of new customers per period

• Number of lost customers per period

• Sales force cost as a percentage of total sales

When a company starts investigating sales force efficiency, it often finds areas of improvement.

Sales-Promotion Efficiency

Sales promotion includes dozens of devices for stimulating buyer interest and product trial. To improve sales-promotion efficiency, management should record the costs and sales impact of each promotion. Management should watch the following statistics:

• Percentage of sales sold on deal

• Display costs per sales dollar

• Percentage of coupon’s redeemed

• Number of inquiries resulting from a demonstration

Distribution Efficiency

Management should search for distribution economies in inventory control, warehouse locations, and transportation modes. One problem is that distribution efficiency declines when a company experiences strong sales increases. Strong sales surges can cause a company to fall behind in meeting delivery dates. Management responds by increasing sales force incentives to secure more orders. The sales force succeeds but once again the company slips in meeting delivery dates.

Management needs to identify the real bottleneck and invest in more production and distribution capacity.