
Making less by moving from sole trader to company operation
Construction Industry
Our client had for a number of years been a sole trader. He achieved business growth, formed a company, hired staff and gained an excellent reputation.
After much hard work, realised that the yearly net profit was less than previous.
Profit was leaking due to not enough controls in the following areas:
- Variations to contracted work, – documentation not water tight which required re-drafting.
- Profit margins on materials used not consistent due to insufficient staff control procedures. Implemented new procedures.
- Productivity of individual staff not tracked. Implemented key performance indicators for staff members to raise performance.
The company now has the tools in place to ensure maximum ongoing profitability.
Working hard in the Business vs on the Business
Medium sized Plumbing Business
The client’s business has a 25 year history during which some partnerships changed. All the partners have professional trade’s background and as such achieve excellent quality control and customer satisfaction. Company net returns did not improve year to year. Identified main areas of profit leakage:
- Not raised charge out prices in fear of losing customers.
- Staff not held accountable for productivity of hours worked.
- Struggling to achieve satisfactory mark-up on materials charged out to clients.
Solution:
Implemented increase in charge out rates as well as minimum call out fee to increase average sale’s value.
Staff re-trained to understand importance of hours worked and hours charged out to clients.
Achieved targeted mark-up on cost of materials by more competitive purchasing, tighter control on materials charged out and tighter control on wastage’s.
All this has been achieved by one of the partners taking a more prominent role in working “on the business” and controlling the team’s performance.
Strategic Business Plan for a Start-up Business
Contemporary Therapy – Kinesiology
As is the case in so many instances, a person has a passionate hobby which one day leads to a career.
Our client had for many years worked professionally in the finance industry whilst pursuing his hobby by studying for certification.
The business has been worked in part-time and will shortly be progressing into full time with plans to expand. We were asked to help with a business plan with a focus on sales and marketing and well as the important financial projections.
The completed business plan contains:
- SWOT analysis (Strengths, Weaknesses, Opportunities & Threats)
- Market Analysis. Industry Analysis.
- Competitive Edge. Define Target Market.
- Sales & Marketing Strategy.
- Sales Forecast by Month & by Year.
- Milestones (achieve what by date/year).
- Personnel Plan. Management Summary.
- Projected Profit & Loss
The completed Strategic Business Plan contains 1 important reminder:
“Ensure your Business Plan is reviewed regularly as you move along to stop making assumptions and using actuals”.
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“Ever wanted to know what INCOME you SHOULD really be making from your business?”