Push your sales

Focus on niche markets - there is an advantage in positioning your company as a market leader in a niche market.

Target a niche market that drives the greatest sales, profitability and quickest sales cycle.

This will produce sales growth with the least amount of effort. Niche market leaders generate strong sales revenue and profit growth driving up the value of their business.

Promote your products - drive increased sales growth by offering customers bespoke packages such as volume discounts, extended contracts or product bundles.

There is no merit to be gained from discount pricing on your offerings if they truly provide the value described.

Develop your brand - unique design, functionality and technology can make your products proprietary, which can increase the desirability of your products/services and the price a buyer is willing to pay. Branded products offer protection from the competition and enabling sales of products at a higher price and profitability.

Highlight your USP - even if your company are offering products that are not proprietary, it is vital that customers recognise what makes your company different to the herd.

When you do this successfully, your company becomes the first choice and achieving sales targets will not be an issue.

Jettison underperformers - the best way to dramatically lower your costs and improve profitability is to shed underperformers. Evaluate all of your products and services and delist them if they are not profitable or helping to drive sales of your other products.

Ensure that marketing is delivering a positive return on investment. Less easy is the evaluation of the sales team but in reality underperformers are a luxury no organisation can afford.

 

Fraud - don't be a victim

One of the lessons of the recent economic downturn was the need for all businesses and organisations to remain alert to the potential for fraud.

Entrepreneurial owners of SME’s are a prime target for fraud as overseeing finances doesn’t always come naturally to them. If a founder is focusing mainly on the product or service being sold, and only minimally on administration, it leaves a business vulnerable to fraud.

In smaller organisations fraud can take many forms e.g. invoice scams, to suppliers providing kickbacks for inflated purchases, theft of stock, fictitious expenses etc.

For larger organisations the potential for various fraud activities exists but the numbers involved are far greater.

It is vital that all organisations have systems in place to monitor all of the company’s finances and commitments in a clear and concise format.

Simple but effective systems of checks and balances can go a long way to limiting if not removing the risks.

It is all but impossible to ensure that any organisation is “fraud proof” but by establishing robust and efficient systems some measures of comfort can be introduced.

Competition is hard enough without having to face another drain on your company’s resources.

Go East young man

In the 1860’s the American author Horace Greeley adised “Go West young man”. Today he would undoubtedly change his advice to go East.

Chinese GDP is surging on the back of consumer spending. Within the next decade China’s GDP is set to exceed US$28.3 trillion versus a forecast for the US US$27.4 trillion.

The ability of the Chinese to play the long-game has never been in more evidence.

In a single decade from 2001 up to 2010 Chinese trade with the rest of the world increased from£325 billion to £1.9 trillion.

Since 2005 China has invested £320 billion across the globe with 75% of this in developing countries.

There is an insatiable demand for raw materials to fuel the economic growth in China and commodities such as Oil, Minerals, Precious Metals and Fuel are the prizes for these investments.

The ongoing crisis in Western economies has provided ample opportunity for China to assert its economic strength and China has now usurped the US as the largest foreign investor in Germany.

Chinese companies are investing in such diverse areas as the French Wine industry or making acquisitions in the US/European Food Industry and this will undoubtedly continue as China accelerates its move into Western markets.

China says it wants to back major UK infrastructure projects and has recently signed £14bn in trade deals.

The projects the state-owned China Development Bank (CDB) wants to invest in include High Speed 2 and the next generation of nuclear power stations.

A major deal between BP and China National Offshore Oil Corporation is worth about $20bn (£11.8bn).

At the same time China has continued to extend its influence in Africa. In the latest development China has agreed to give Nigeria a $1.1bn (£700m) low-interest loan to build much-needed infrastructure.

The money will help build roads, airport terminals in four cities, and a light-rail line for Nigeria's capital.

China will continue to invest heavily in Africa at it relies on it for oil and other natural resources.

The growth of China will continue to stimulate Asian economies .Similar rapid growth is expected in India where its consumer market is predicted to overtake that of Japan by 2024.

 

Better late than never

Following the scandal in 2013 where horsemeat was passed off a beef the UK government commissioned a report whose findings will now lead to a Food Crime Unit especially set up to investigate fraudulent trading in foodstuffs.

At the time of the so called “horse gate scandal” the Chartered Institute of Purchase and Supply reported that almost half of supply chain managers “do not have a means of monitoring their entire supply chain”.

Even more damaging was their comment that “how few chief executives and boards take supply chain issues seriously”.

Initially the effects of the horsemeat scandal were dramatic. In the first two months following the reports of horsemeat being found in ready meals sales of these products were down 5% year-on-year, frozen food sales dropped 13% and there was a fall of 3% in chilled ready meal value sales.

One of today’s buzzwords is “traceability” – it being incumbent on companies to monitor all aspects of their supplier’s performance with failure to do so having far reaching and damaging consequences.

In the eye of the storm it appeared that the days of a “cosy” relationship between Buyer and Supplier, the archetypal nod and a wink would have been consigned to history.

Nobody faced any penalties or sanctions for what was described as the worst scandal in the history of the UK supermarkets.

This new unit operating under the umbrella of the Food Standards’ agency will have the power to ensure that the safety of the UK food supply chain is not compromised.

 

Who’s getting a free ride?

 

In this current climate more and more customers are actively delaying payment to suppliers. Slow payers monopolise profits and starve creditors of much needed cash.

Accordingly policing of receivables is critical.

When a customer exceeds the agreed payment terms, they are in reality using the supplier as an alternate (unsecured overdraft).

Left unchecked this situation can easily spiral out of control so that in a worst case scenario the supplier is forced to keep “supporting” the errant customer for fear of realising a bad debt.

Take a long hard look at your accounts receivable – are you happy to see 30 days drift into 60 and beyond?

Not only is the profit margin eroded but the risk to the company is severely heightened. Sound companies do not need the financial support that comes from pinching credit.

Evaluate your customer’s performance and then ask “who is getting a free ride?”

 

The danger of short termism

 

The pressure to deliver quick results to the potential detriment of the longer-term development of a company has become an entrenched feature of the UK business environment.

It has become a very damaging business approach.

Short-termism curtails ambition, inhibits long-term thinking and provides a disincentive to invest in research, new capabilities, products, training, recruitment and skills.

There is no doubt that the main reason which precipitated the financial meltdown was the slavish following of short terms goals which hitherto had been labelled “get rich quick” schemes but have been shown to be the very opposite.

The problem facing the business community now is as companies struggle with funding issues and the spectre of more corporate failures it becomes increasingly difficult to focus on long term objectives as opposed to satisfying the immediate requirements of the shareholders.

 

Don’t shoot the messenger

 

One recurring theme from the analysis of losses made in the financial sector is that the management were totally unaware of the risks which their institutions were running.

To be effective, risk management and risk controls rely on the people operating them.

As has been well documented all too often the corporate culture is dominated by fear and greed and these together make for a toxic combination.

When strategies fail and trading positions spiral out of control these two elements come very much to the fore. Fear can often lead to individuals embarking on an even more reckless course of action in the misguided belief that it will all come right – the gambler’s doubling up mentality.

At the same time recklessness is often driven by greed; the larger the risk the greater the reward should it prove to be a successful course of action.

Against this background it is incumbent on the management to ask the uncomfortable questions and not merely rely on the assurance that all is well and going to plan.

It is always worth remembering that if something looks too good to be true it invariably is.