Top Ten Tips to Create Profit from Order

10

top tips on how you could increase your profits by 10% of your annual turnover

PROFIT FROM ORDER

From chaos, we bring order.

From order you make profit.

At Azara Logic we have a vision of a world in which systems allow employees and companies to grow.

Introduction

Our purpose is to bring order to your business and convert unrealised potential into profitable growth.

These Ten Top Tips demonstrate just some of the areas that, in our experience, suffer from a ‘lack of order’ – adversely affecting business, personal growth and staff morale.

We hope they make you realise how ‘more order’ will improve the way things are done in every key area of your business and understand what is possible when your systems are really working for you.

Enjoy reading. If you need help, please contact us or ask for our unique Chaos Audit, details of which are in the last page of this book.

Amanda Sokell Managing Director

Get your message straight Know your customers

Contents

Resist the temptation of spreadsheets Reduce your risks - plan for the worst Avoid the madness of workarounds Let your staff know what’s expected of them Produce meaningful reports to track the trends Avoid the trap of garbage in, garbage out Protect against random purchasing disease Stop communications duplication and confusion

The most successful businesses know exactly why they exist and what they do.They know what they sell and to whom.They know how they want to portray themselves and ensure that their brand culture and proposition are understood and ‘lived’ by everyone in the company.

Think of Volvo, Body Shop and Asda.They have created order in their customer communications and in the way they operate in line with them.

1 Get your message straight

It is a complete waste of time and money creating a brilliant marketing message if your team fails to understand and act upon it.

Asda’s key message is cost cutting and how their customers can ‘pocket the difference’.The message is successful because everyone in the organisation understands the brand proposition and lives through it (even the chief executive flies economy and shares a hotel room when travelling on business).

Marketing Strategy guru Al Ries wrote: ‘A brand is a single differentiated word or concept that you own in the mind of your prospect. It is as simple and as complex as that.’

Do you know what single differentiated word or concept you own in the minds of your prospects? In our experience, many companies do not. In our opinion, getting its message straight is the single most important task a company can do to create order and increase profitability.

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Knowing your customers is about understanding who they are, what and how frequently they buy and how profitable they are to your business.

2 Know your customers

Many companies seem unable to provide this fundamental information.They have no central register of customers and their details, with individual sales staff and departments maintaining independent lists.Too often, the only place where data is consolidated is in a financial system with only limited information being captured and to which access is limited.

Creating order in this key area involves gathering, storing and showing information in a way that allows you to profile your customers and their purchasing habits.You will then immediately know about the 20% of those who generate 80% of your revenue and those that cost you money.

Armed with this information, you can generate increased profits by aiming relevant marketing messages to your most profitable customers and ‘saying goodbye’ to the worst ones or, better still, passing them on to your competitors.

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Spreadsheets provide valuable tools for structuring and presenting business data.

We all know how to create them – and wonder how we survived before they came along.

The temptation exists, however, to use spreadsheets as a cure-all for every office problem – frequently, they are used to capture information that is not held in the corporate database.

This lack of order creates ‘islands’ of information, much of which is duplicated in another database or locked away in someone’s personal directory.

3 Resist the temptation of spreadsheets

You’d be surprised at how much extra profit could be generated by consolidating information and getting rid of redundant spreadsheets.

Profit by reducing staff time in creating them. Profit by eliminating waste due to unshared information. Profit by preventing the huge waste created by duplication. Profit by leveraging the information to your advantage.

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Starting a business requires a certain degree of optimism, although judging by how many new businesses run unnecessary risks by failing to plan for the worst, perhaps over-optimism is the better description.

Events such as the explosion at Buncefield oil depot, the tornado in Birmingham and the bombs in London should have convinced even the most happy-go-lucky businesses of the importance of having effective contingency plans in place to minimise the impact of such situations.

4 Reduce your risks - plan for the worst

Risks and their implications are different for every business and the secret of successful continuity panning is to create a balance between probability and extreme possibility.

Buncefield, for example, was undeniably devastating but unlikely to occur again during our lifetime. More probable threats lie closer to home, such as key personnel being absent for a long period, or several team members suffering an accident whilst travelling. Both events could result in lasting harm to a company.

However, plans for the latter events, although far cheaper to implement, are often not even considered. Some businesses set up sophisticated contingency plans that are more expensive than the financial impact caused by more likely occurrences.

So create order in your own mind and business and evaluate the cost-benefit of the steps you consider taking to minimise the risks.

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A workaround is any work done that deviates from a business’s standard operating procedure. Some degree of workaround is almost inevitable in a dynamic, growing company and can be minimised if processes and tools are re-evaluated to reflect changes in products, services, staff and technology.

Two examples of workarounds: The company whose entire business is generated by telephone enquiries/orders that provide the key for its management information. It then changes to an internet-based system and discovers that it can no longer identify the source of enquiries.

Or one that starts out selling to a wholesale market, then expands into a retail environment and has to make manual changes to the prices on every automatically generated invoice.

5 Avoid the madness of workarounds

Both examples sap energy and generate repetitive and unnecessary work. If staff are spending time working around a system, they cannot put their energies into profitable growth activities; either for the company or themselves.

Businesses can create order by Reviewing the way things are done.

Identifying and acting on those areas that are no longer appropriate.

Implementing new ways of working.

Updating tools as required.

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Most managers agree that what gets measured gets done so ensure that staff know what is expected of them and how it will be measured.

Disorder in the personnel area is found in many forms.The most common is the absence of a formal staff appraisal system.

If staff contributions are not routinely monitored and measured, businesses will almost certainly under utilise a valuable resource.

Other disorders can be the result of retaining a staff reward scheme that no longer aligns with a company’s strategy and a

6 Let your staff know what’s expected of them

company that pays increased commissions for new client accounts when its strategy now focuses on growth among existing customers.

Profit from order by implementing formal appraisal systems and reward schemes that have targets and objectives that match your overall goals.

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How many reports does your company produce and over what period? How many of them are actually read on a regular basis and provide management with real decisionmaking information?

Disorder can result from both report time and content inefficiency. Reports that take more than 4 hours a month to produce take too much time, too much paper and take-up too much of the reader’s attention. More importantly, if their content is inaccurate or out-of-date, managers could make the wrong business decisions.

7 Produce meaningful reports to track the trends

The best reports are informative and concise. They provide managers with long-term trends and, crucially, an early warning system that helps them avoid the fate of the yachtsman who fails to track the effect of winds and tides on his course.

To profit from order, managers need to know the 10 reports most meaningful to their business and automate their production.

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This term from the early days of computing is still valid today.

Think of the massive amount of information captured by your company and ask yourself if all of it is accurate and up-to-date. If you can say yes, you are amongst a select minority.

Some examples.

Software sometimes contains mandatory fields that are just not relevant. Or, more seriously, crucial information is overlooked because the software does not ‘force its entry’. Maybe a business has changed and its tools have not kept up, so sales information is captured and recorded using meaningless categories. Another frequent culprit is the central database that doesn’t provide critical information, so it is maintained outside of the system and often duplicated.

8 Avoid the trap of garbage in garbage out

To add value to your data, create order by capturing essential information, (deleting that which is redundant) and sharing it throughout your organisation.

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In the beginning, there was a simple decision: the MD authorised and made all the purchases. Now your business has grown and more people are involved in the process, so are you sure that all purchasing made on behalf of your company is correct? Do you have a system that minimises the risk of unauthorised purchases? If the answer is no, there is a real possibility that your bottom line will suffer.

Random purchasing can describe how many companies buy key products and services. Even if they have gone through a formal system, has a conscious purchase decision been made?

9 Protect against random purchasing disease

Have they obtained the best deal for the company? Perhaps they have a great deal on a new PC that’s different from the rest of their IT infrastructure, but have they considered the impact of its lifetime support?

It makes financial sense to create order in your buying process in order to maximise your profit. Negotiate contracts for the 20% of those purchases that reflect 80% of your expenditure and enjoy the increase in your bottom line.

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Have you ever thought about how information is communicated in your company? Whether it’s by phone, fax, email, voicemail, instant messaging or by talking face-to-face, is it the most efficient for your business?

Too often, information is passed multiple times by many methods, resulting in duplicated effort and risking the famous confusion of the message that started as ‘Can you send me reinforcements, I am going to advance’ but, after passing through different levels, appeared as ‘Can you lend me three and fourpence, I am going to a dance’.

10 Stop communications duplication and confusion

A typical example is a company that logs everything that comes into its warehouse through an electronic stock control system.

Despite information being held in this central database, the warehouse staff also send a spreadsheet via email to key personnel, advising them that deliveries have arrived.This wasted time and server space could be easily stopped if information was formatted in the way it will be read.

To profit from order, you need to examine all information recorded within your business, track its progress from creation to deletion and ensure that there is no duplication of communication over its lifetime.

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If your company already uses the processes contained in our 10 Tips, you are obviously running a very successful business.

Congratulations.

Our experience shows that the effect of properly following these tips could be as much as 10% of your company’s annual turnover.

In conclusion

To help you understand how you could profit from order, we offer a Chaos Audit designed to provide your business with an overview of its ‘Chaos Level’ and how it can profit from our creating more order.

Our standard audit takes one day and examines all aspects of the business. We ask that you are ‘there to share’ (giving us access to the right people) and ‘prepared to share’ (access to the right information).

The result of the process is a report and presentation to management with the strategic ‘Big Wins’ recommendations and the immediate ‘Quick Wins’ areas, where we identify the savings that cover our ‘No Profit, No Fee’* guarantee. *Terms and conditions apply

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PROFIT FROM ORDER

No Profit - No Fee

We are so confident of making order from chaos that we guarantee to deliver efficiencies that will save you more than the cost of our fee (from ÂŁ1600 plus expenses) or we will charge based only on what we find during the audit (terms and conditions apply). So you really are in a win/win situation.

To find out more about Azara Logic and book your Chaos Audit, call us today.

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PROFIT FROM ORDER

Azara Logic Enterprise House 1B Wickenden Road Sevenoaks Kent TN13 3PJ Telephone: 01732 741414 Facsimilie: 08700 521725 info@azaralogic.com www.azaralogic.com

PROFIT FROM ORDER

Rubik’s Cube® used by kind permission of Seven Towns Ltd. Photography by Stephen Maxwell

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