Action planning MES costs, sales forecast & profit calculations

Expro 100 Engineering

The Hague November 2013Martin BitterExportant Consultants Ltd.

Agenda

• The workplace and the fate of plans• Action Plans• Are we making money??

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Your challenges back in the office??

1...........2.......3..

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Implementing challenges

As 9 out of 10 strategies fail to get implemented successfully:6 mind shifts need to occur to make implementation successful.(“old mind set ” between brackets)

Mind Shift #1 - 'When crafting strategy is complete, the hardest part is over.'

No, implementation is twice as difficult as creating strategy.

Mind Shift #2 - 'Most people resist change.' No, most people are open to change when it is communicated in the right ways.

Robin Speculand, CEO of Bridges Business Consultancy Int.Article Source: http://EzineArticles.com/?expert=Robin_Speculand

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Implementing challenges -2

As 9 out of 10 strategies fail to get implemented successfully:6 mind shifts need to occur to make implementation successful.(“old mind set ” between brackets)

'It's all about taking actions.‘ 'Communication is all about making sure people understand the

strategy.‘ 'What worked yesterday will work tomorrow.‘ 'Strategy must be reviewed twice a year.'

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The Salami tactic

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The french loaf as politically correct version for vegetarian CEO’s

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Action planning

The Action Planning after your PMC and MES

Recap:

1. You decided on what to sell to whom and where (PMC)

2. You decided how to get to your client (remember, the one that pays the bill), Your Market Entry Strategy!

The 4 step EMP

Management responsibilities

Who will be responsible and how will the workload be divided?

Who will control the export activities?

Do you need to hire qualified export staff?

Action plan

Develop an action plan for your start-up or expansion activities.

Show time schedules, deadlines, responsibilities and when applicable extra costs incurred by an action (visits, web presence, product improvement).

Budgets and forecasts

Include a section on financials; demonstrating the effect your export activities will have on revenues and profits. Prepare a sales forecast (volume and turnover) for 1-3 years and costs. What do you need to invest?

The MES Strategy

Management Summary of detailed info below, sense of direction for company. Key issues, how to meet objectives

Target markets Positioning , what do you sell where, price, how, compare

to competitor, high, medium low end market Product, how can you meet customer and market need,

product adaptation Pricing, cost plus, competitive, penetration, perceived value Distribution, direct / indirect cost of in-market activities Promotion: create awareness, mix of techniques

Action PlanBudget Year 1

Budget Year 2

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec in Eur Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec in EURKick-off export ventureEstablish Team 0Cultivate commitment at all levels 0Establish export culture within organisationDevelop new systems and procedures 0Implement skill enhancement programme 0Establish market information systemDevelop terms of reference and benchmarks 0Assign market research tasks 0Research first priority markets 0Reseach second priority markets 0Implement process/product adaptation programmeProduct/Process adaptation 0Cost saving programme 0Direct Marketing CampaignCollect prospect list 0 0Prepare one-on-one mailings in first priority country 0 0Run the mailing 0 0Follow-up 0 0Prepare one-on-one mailings in second priority countries 0 0Run the mailing 0 0Follow-up 0 0Staff costs after year one 0Upgrade websiteSubcontract the webdevelopment 0 0New website online 0Trade fair participation in first priority countrySelect appropriate fair 0Study exhibitors and identify competitors and prospects 0 0Make reservations 0 0Prepare samples, documentation and stand 0 0Arrange logistics 0 0Arrange free publicity and advertorials 0 0Prepare and send invitations 0 0Participate 0 0Field research and follow-up visits 0 0Follow-up 0 0Introduce CRM as key management toolCompare different software packages 0 0Purchase and implement CRM system 0 0Performance monitoring and evaluation

0 0

fair 3fair 4

fair 2

Quarter 1 Quarter 2

fair 1

Quarter 3 Quarter 4 Quarter 1 Quarter 2 Quarter 3 Quarter 4

The costing of your MES actions

Your MES actions, eg visiting a trade fair or appointing an agent, developing new promotion material are all elements that need money.

Are you making money?

To find out if you are going to make money from your export activities you need to compare the export cost with the budgeted export turnover and gross margin.

Euro / Year % 2014 2015 2016Sales

Turnover 300 0 0

Cost of Sales (@xx%) 80 240 0 0

Gross Margin 60 0 0

Total Cost&Expenses (from action plan elements below) 65 0 0

Promotion Activities 29 0 0Trade Fair Participation

fair 1 14 0 0fair 2 5 0 0fair 3 0 0 0fair 4 0 0 0total Trade Fair 19 0 0

Direct Marketing - Visits / travel 5 0 0

Web and other Promotional ActivitiesWeb Development 2 0 0Google Adwords 2 0 0SEO 0 0 0Promotional Reorganisation 1 0 0

total web+other 5 0 0

Other Overheads Associated with exportsContribution to General Overheads (@yy%) 12 36 0 0Additional (export) Staff 0 0 0total overheads 36 0 0

Export Result Before Tax -5 0 0

Accumulated Export Result -5 -5 -5

EMP Budget and Forecast

exercise

You are a starting exporter and have done your research.You have come up with the following MES costs. (see next slide)

Your task is to use the blank xcel sheet. In your mail you received a link to this file.

1. Complete the sheet for the action planning (costs at the timeline)

2. Determine whether you will make money in the first year, given your estimated turnover and margin compared to the export cost, using the second tab in the file (budget & forecast)

15:00

Export detailsYour planned costs• Trade Fair 1 in April 2014, cost €7.000 .• Trade Fair 2 in Sep 2014, cost € 3.000• Direct Marketing and Visits, Travel cost, 2.500 in Feb and 2.500 in Sep.• Web development € 2.000, Feb 2014• Google adwords € 2.000 campaign, period March and April• Promotional reorganisation € 1.000 in Feb.

Your estimated turnover In 2014: € 200.000 Your cost of sales 80% Contribution to general overheads….12%