When Sales Can Wreck Your Business
-
Upload
corelytics-by-coreconnex-inc -
Category
Business
-
view
207 -
download
0
description
Transcript of When Sales Can Wreck Your Business
When New Sales Can Wreck Your BusinessAnd how to see it coming
Presented by:
Frank Coker, CMC, MBACEOCoreConnex, Inc.Producer of theCorelyticsTM Financial Dashboard
What can you see?
Agenda• The Myth• Gross Margin and Profit• LOB Performance• Business Models• Benchmarks• Key Trends• Look Ahead• Monthly Process• Q&A
The Myth
More sales are always good for business, right?
Why not?
– Sales with a negative margin destroy companies
– Increasing sales in an LOB with declining margins may increase losses at faster rate
– Sales volume is often not as important as margin
– There will always be a leader and a laggard LOB
Gross Margin
Gross Margin = Revenue - COGS
COGS (Cost of Goods Sold a.k.a, direct costs)
• Cost of Sales• Materials
(product costs)
• Direct labor– Billable Staff– Contractors
Profit
Profit = Gross Margin - SG&A
SG&A (Sales, General and Administrative expenses, a.k.a., “overheads”)
• Admin payroll• Marketing• Rent
• Legal• Training• Taxes• etc.
Signs of Disaster
• Rising revenues
• Falling margins
Manage by Line of Business (LOB)
Standard LOBs:– Monthly Service Agreements– Time & Materials– Project– Product – Other
What Can You See?Combined
T&M LOB Product LOB
Service LOB
Your Business Model
• Your Predominant Business Model® (PBM®)– Monthly Service/Maintenance Agreements– Reselling Product– Project Work
S-L Index™ benchmarks and the Predominant Business Model© (PBM©) are
proprietary to Service Leadership, Inc.
Benchmark Performance
• Leading indicators & evolving trends
PBM
Benchmarks(S-L IndexTM)
LOBs
Goals
Know Your Trends
Gross Margin for each LOB
PBM
Benchmarks(S-L IndexTM)
LOBs
Goals
Know Your Forecast
Gross Margin by LOB
PBM
Benchmarks(S-L IndexTM)
LOBs
Goals
Scenarios
Monthly Process
• 30 Minute Monthly Action Plan
Close Books
Upload
Data
Review Leading Indicators
TOP 3ACTION ITEMS
assign ownership
Learn More
https://dashboard.corelytics.com