Measuring performance – when what you are selling is time

When you are in a professional services business you only have one thing to sell and that’s your time. Whether that’s your own time, your staff or time you have equipment being used you need to know on a day to day basis that you are making a return on your business investment. Not only that, you need to manages cashflow so you can make payroll and cover other expenses.

In this professional services environment there are 3 metrics which I believe are key to enabling you to achieve this. They are utilisation, billing and time write offs. There are a few other metrics you would keep an eye on, but I believe that a professional services business can be defined in these terms. Here is why and how you would accomplish this.

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Its budgeting season again – how to produce an effective budget

As the financial year comes to an end, many businesses are currently undergoing or about to start their budgeting process. This will involve reviewing the remaining months of the year to see how they will finish up and looking at how the next year will look. The budget will become our base line for next financial year’s results and set expectations for business and staff performance.

Simply put, a budget is a record of future income and expenses. This can be as simple or as complex as you would like to make it. The criteria for a good budget Read more

End of another calendar year – a time for reflection

As we approach Christmas and wind down for the celebrations and much earned time off, no doubt we will be thinking of the year ahead. February is one of the most popular months for strategic planning as a lead in to budgets and end of financial year. Over Christmas and new year you will probably reflect on the year just gone, how it went, what worked well and what you could have done better and also the year ahead, what you would like to achieve.

In that process of reflection, here are some things you may think about. Read more

When is the right time to hire a CFO?

I am often asked this question by business owners what is the right time to hire a CFO?  Many of these businesses have been working closely with their external accountant and have simply grown to a stage where they need more support and their external accountant has reached the limits of their service offering. This doesn’t mean there is anything wrong with their external accountant, it’s just that the business has reached a point in its growth cycle where it needs an in-house resource to provide a greater level of direction. Is this the right time to hire a CFO, has the business left it too long or should they hold off for even longer?

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What is the true cost of a SaaS platform?

There are now many SaaS (Software as a Service) products out there that on face value seem really cost effective, but are they? What might start at a seemingly affordable $49 per month can grow to a much higher amount. How would you compare this monthly cost to a one-off, up-front cost of $20,000? Many businesses are taking the $49 per month option because it sounds affordable, but is this the best business decision and how would you compare the two options?

Here are some things you may consider when comparing the true cost of a SaaS system to other options:

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Are your profits at risk – unnecessarily?

A business is a lot like a leaking bucket, you fill it up with profits but as holes develop the profit can leak out. Retaining your profits for all your hard earned effort is about trying to predict how those holes could appear and then planning to avoid or minimise those situations. There will always be some risk involved, but this should be calculated and at a level which is acceptable. If you don’t take any risks, then you are much less likely to get anywhere.

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7 ways to make your business more profitable

When you have consistent revenue growth you have built a strong business, but revenue is only worthwhile if it is delivering profits. After all, that’s why you are doing it. So when you’ve reached that stage of your business lifecycle and have become accustomed to driving marketing and sales, how do you improve profit?

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Is a part time CFO a cost effective solution ?

A vast range of skills are required to successfully grow a small-medium sized enterprise (SME). These include Sales, Marketing, Product Development, Operations, IT, HR and Finance. Employing full time staff in these roles could cost more than $1 million per annum – simply unaffordable for most SMEs – so how do you bring in those skills? Read more

A good business model – do you have a compelling story to tell ?

A good business model is the foundation on which a business succeeds yet many business owners begin their venture without a well thought through model that will provide them the best chance of success.

Karan Girotra and Serguei Netessine wrote in Harvard Business Review (1) that a business model was essentially “a set of key decisions that collectively determine how a business earns its revenue, incurs its costs and manages its risks”. Whilst this sounds simple, it can be daunting to come up with a model that is succinct and easy to communicate to potential interested parties, most commonly investors.

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Are you finding it difficult to achieve your annual budget ?

A budget is a key tool to assist in keeping a business on track with its goals, but often the budget can become meaningless when underlying assumptions are not met. For example, a movement in the foreign exchange rate could mean your budget is out of date before you get started. So how do you pull together a budget that is achievable ? Here are some key steps to follow: Read more