59 min
Profitability: Savings on Fixed Costs with Mick Wienholt Catalytic Conversations
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- Business
COVID19, racial reckoning, economic uncertainty, the upcoming election….
Each is a complex, impactful occurrence. Together - the challenges keep every business owner ready to take up the fight, flight or freeze reaction in our reptilian brains.
McKinsey recently reported that some industries will take up to five years to recover. Others were able to pivot and navigate the new government recommendations with some success. In the messy middle are those businesses that are working through the complexity one step at a time. The small businesses have sustained most of the economic punches of this crisis.
Each owner’s experience is different. So, take what we talk about today with the knowledge that there is no silver bullet, or one size fits all or a magic pill.
Key Issues - Owner Perspective:
Impactful steps to improve the balance sheet, prune away the dead costs, and overall profitability. This is beneficial to both selling and reinventing.
Improve the company's retained earnings and position those earnings for potential ability to self finance.
Prioritize and then execute fixed cost operations that can be achieved with a minimal amount of disruption, and maximum savings.
Visit my website at www.ascendcoachingsolutions.com and DL my free PDF on Four Steps to Pandemic Survival.
Visit Mick Wienholt of Schooley Mitchell, at www.schooleymitchell.com/mwienholt, or email Mick at mick.wienholt@schooleymitchell.com.
What You Need to Do
The Predictive Index reported recently that 39% of CEO’s have placed strategy development as their #1 priority. The 2nd? Talent Strategy. And, the 2 are intertwined.
Consider a change to the method of Depreciation - is there short term gain, or not? (Selling the Business - NO) Does this option offer long-term gain? (Reinventing the Business - Maybe).
Could a change in the method of Amortization offer a reduction in fixed costs, and an increase in profit? (1) Full amortization - loan to zero at the last payment date, (2) Partial amortization - paying less over time with a closing payment of the final date, (3) Interest only amortization - at the end of term principal is due,(4) Negative amortization - less than interest only with a large payoff.
Look at your company’s Insurance policies: what would a short-term shop with the lowest cost provider and reduce benefits to minimal levels offer for Selling the Business, and for Reinventing the Business.
Collect data on compensation throughout the company. Look at Salaries: how would choosing to top grade all positions. Segregate and identify candidates in the bottom 10%. Designate those positions for separation or part-time and devise a plan to execute on that decision. This would be a benefit for those of you who want to sell the business. If you plan to reinvent the business, it may also be a benefit - weigh the implications.
For your equipment rentals & leases: if you have multiple leases from different manufactures (1) consolidate leases with one financing agency. This would be a benefit for both selling and reinventing the company.
Consider reducing all back end expenses by 10% - run a cost/benefit analysis, then decide.
---
Send in a voice message: https://podcasters.spotify.com/pod/show/ascendcoachingsolutions/message
COVID19, racial reckoning, economic uncertainty, the upcoming election….
Each is a complex, impactful occurrence. Together - the challenges keep every business owner ready to take up the fight, flight or freeze reaction in our reptilian brains.
McKinsey recently reported that some industries will take up to five years to recover. Others were able to pivot and navigate the new government recommendations with some success. In the messy middle are those businesses that are working through the complexity one step at a time. The small businesses have sustained most of the economic punches of this crisis.
Each owner’s experience is different. So, take what we talk about today with the knowledge that there is no silver bullet, or one size fits all or a magic pill.
Key Issues - Owner Perspective:
Impactful steps to improve the balance sheet, prune away the dead costs, and overall profitability. This is beneficial to both selling and reinventing.
Improve the company's retained earnings and position those earnings for potential ability to self finance.
Prioritize and then execute fixed cost operations that can be achieved with a minimal amount of disruption, and maximum savings.
Visit my website at www.ascendcoachingsolutions.com and DL my free PDF on Four Steps to Pandemic Survival.
Visit Mick Wienholt of Schooley Mitchell, at www.schooleymitchell.com/mwienholt, or email Mick at mick.wienholt@schooleymitchell.com.
What You Need to Do
The Predictive Index reported recently that 39% of CEO’s have placed strategy development as their #1 priority. The 2nd? Talent Strategy. And, the 2 are intertwined.
Consider a change to the method of Depreciation - is there short term gain, or not? (Selling the Business - NO) Does this option offer long-term gain? (Reinventing the Business - Maybe).
Could a change in the method of Amortization offer a reduction in fixed costs, and an increase in profit? (1) Full amortization - loan to zero at the last payment date, (2) Partial amortization - paying less over time with a closing payment of the final date, (3) Interest only amortization - at the end of term principal is due,(4) Negative amortization - less than interest only with a large payoff.
Look at your company’s Insurance policies: what would a short-term shop with the lowest cost provider and reduce benefits to minimal levels offer for Selling the Business, and for Reinventing the Business.
Collect data on compensation throughout the company. Look at Salaries: how would choosing to top grade all positions. Segregate and identify candidates in the bottom 10%. Designate those positions for separation or part-time and devise a plan to execute on that decision. This would be a benefit for those of you who want to sell the business. If you plan to reinvent the business, it may also be a benefit - weigh the implications.
For your equipment rentals & leases: if you have multiple leases from different manufactures (1) consolidate leases with one financing agency. This would be a benefit for both selling and reinventing the company.
Consider reducing all back end expenses by 10% - run a cost/benefit analysis, then decide.
---
Send in a voice message: https://podcasters.spotify.com/pod/show/ascendcoachingsolutions/message
59 min