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![Page 1: Copyright 2014, Morgan Marketing Solutions, Inc. Make better business decisions – gain peace of mind Richard P. Morgan CMC, FIMC Certified Management Consultant.](https://reader035.fdocuments.in/reader035/viewer/2022062516/56649e455503460f94b3a2bd/html5/thumbnails/1.jpg)
Copyright 2014, Morgan Marketing Solutions, Inc.
Make better business decisions – gain peace of mind
Make better business decisions – gain peace of mind
Richard P. Morgan CMC, FIMCCertified Management Consultant
Morgan Marketing Solutions, Inc.
![Page 2: Copyright 2014, Morgan Marketing Solutions, Inc. Make better business decisions – gain peace of mind Richard P. Morgan CMC, FIMC Certified Management Consultant.](https://reader035.fdocuments.in/reader035/viewer/2022062516/56649e455503460f94b3a2bd/html5/thumbnails/2.jpg)
Copyright 2014, Morgan Marketing Solutions, Inc.
You Need BalanceYou Need Balance
“A business that is seriously out of balance cannot sustain profits, growth,
or customer satisfaction in the long-term.”
Richard P. Morgan CMC, FIMC in Marketing Facets
![Page 3: Copyright 2014, Morgan Marketing Solutions, Inc. Make better business decisions – gain peace of mind Richard P. Morgan CMC, FIMC Certified Management Consultant.](https://reader035.fdocuments.in/reader035/viewer/2022062516/56649e455503460f94b3a2bd/html5/thumbnails/3.jpg)
Copyright 2014, Morgan Marketing Solutions, Inc.
What to BalanceWhat to Balance
Balance Functions• Marketing & Sales• Finance & Administration• Operations & Distribution
Balance Resources• Physical Resources• Financial Resources• Human Resources
![Page 4: Copyright 2014, Morgan Marketing Solutions, Inc. Make better business decisions – gain peace of mind Richard P. Morgan CMC, FIMC Certified Management Consultant.](https://reader035.fdocuments.in/reader035/viewer/2022062516/56649e455503460f94b3a2bd/html5/thumbnails/4.jpg)
Copyright 2014, Morgan Marketing Solutions, Inc.
Some Signs of BalanceSome Signs of Balance
• Great reputation• Sales growth• Cash flow • Productive culture – low employee turnover• Receivables & Payables current• Employee benefits, sponsorships• Operating profits & owner peace of mind!
![Page 5: Copyright 2014, Morgan Marketing Solutions, Inc. Make better business decisions – gain peace of mind Richard P. Morgan CMC, FIMC Certified Management Consultant.](https://reader035.fdocuments.in/reader035/viewer/2022062516/56649e455503460f94b3a2bd/html5/thumbnails/5.jpg)
Copyright 2014, Morgan Marketing Solutions, Inc.
Examples of Balance LostExamples of Balance Lost
• Lack of working capital– Loss of supplier discounts - lower margin
– Low marketing & employee investments
• Physical capabilities too small– Client service complaints, quality problems, lost customers
• Not enough capable employees– Client service complaints, quality problems, lost business
• Over-invested in facilities or employees– Greater interest & depreciation or high payroll expense %
![Page 6: Copyright 2014, Morgan Marketing Solutions, Inc. Make better business decisions – gain peace of mind Richard P. Morgan CMC, FIMC Certified Management Consultant.](https://reader035.fdocuments.in/reader035/viewer/2022062516/56649e455503460f94b3a2bd/html5/thumbnails/6.jpg)
Copyright 2014, Morgan Marketing Solutions, Inc.
How to Gain & Maintain BalanceHow to Gain & Maintain Balance
• Keep your eye on the ball!
• Develop a real operational business plan.– Consider outside facilitation of the planning &
implementation process.
• Create a useful financial model – analyze results & make better future business decisions.
![Page 7: Copyright 2014, Morgan Marketing Solutions, Inc. Make better business decisions – gain peace of mind Richard P. Morgan CMC, FIMC Certified Management Consultant.](https://reader035.fdocuments.in/reader035/viewer/2022062516/56649e455503460f94b3a2bd/html5/thumbnails/7.jpg)
Copyright 2014, Morgan Marketing Solutions, Inc.
Keep Your Eye on the Ball!Keep Your Eye on the Ball!
• Monthly management reviews – grueling– Harvard MBA - years of experience.
• Remained quiet until the end – Short, pithy comments.
• “Boys, you let events distract you. You took your eye off the ball. Focus on what’s important. Better results will follow.”
![Page 8: Copyright 2014, Morgan Marketing Solutions, Inc. Make better business decisions – gain peace of mind Richard P. Morgan CMC, FIMC Certified Management Consultant.](https://reader035.fdocuments.in/reader035/viewer/2022062516/56649e455503460f94b3a2bd/html5/thumbnails/8.jpg)
Copyright 2014, Morgan Marketing Solutions, Inc.
Develop a Business PlanDevelop a Business Plan
• Operational business action plan
• You and your team must build the plan
• Get expert help the first time – All hear the same things. All contribute. Bond.– Action plans – dates, coordinators
• Periodic implementation reviews– Responsibility, accountability
![Page 9: Copyright 2014, Morgan Marketing Solutions, Inc. Make better business decisions – gain peace of mind Richard P. Morgan CMC, FIMC Certified Management Consultant.](https://reader035.fdocuments.in/reader035/viewer/2022062516/56649e455503460f94b3a2bd/html5/thumbnails/9.jpg)
Copyright 2014, Morgan Marketing Solutions, Inc.
Financial Analysis is KeyFinancial Analysis is Key
• Maintain current operating statements!
• Break out variable costs vs. fixed expenses• Use statements as management tools
• Break-even analysis – decision-making tool– Test impact before making major decisions
![Page 10: Copyright 2014, Morgan Marketing Solutions, Inc. Make better business decisions – gain peace of mind Richard P. Morgan CMC, FIMC Certified Management Consultant.](https://reader035.fdocuments.in/reader035/viewer/2022062516/56649e455503460f94b3a2bd/html5/thumbnails/10.jpg)
Copyright 2014, Morgan Marketing Solutions, Inc.
Break-even ModelBreak-even Model
• Three factors determine break-even – Level of sales revenue– Variable cost to you of products & services you sell– Fixed expenses of doing business
• The three factors interact• Left alone, all three factors go wrong!
– Customers go; suppliers raise prices; expenses increase
• You must cope with constant change – Actively monitor and manage the factors!
![Page 11: Copyright 2014, Morgan Marketing Solutions, Inc. Make better business decisions – gain peace of mind Richard P. Morgan CMC, FIMC Certified Management Consultant.](https://reader035.fdocuments.in/reader035/viewer/2022062516/56649e455503460f94b3a2bd/html5/thumbnails/11.jpg)
Copyright 2014, Morgan Marketing Solutions, Inc.
Break-even Model - BudgetBreak-even Model - Budget
Case A: Budget
•Careful rearrangement of income statementSales revenues $4,016,250Cost of materials sold $1,497,600Margin on materials % 62.1%Other variable costs $ (labor, commissions) $848,055Total variable costs $ $2,345,655True contribution margin factor (margin/sales) 41.6%Fixed expenses $1,173,608Break-even point $ (fixed/margin factor) $2,821,452Sales +/- break-even $ (sales– b-e point) $1,194,798Operating profit (Sales +/- b-e X mar. factor) $ 496,987 Percentage profit/loss (operating profit/sales) 12.37%
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Break-even ChartBreak-even Chart
Copyright 2014, Morgan Marketing Solutions, Inc.
Revenue $4,016,250
Variable Costs $2,345,655
PROFIT
Break-even$2,821,452
Budget Case A
![Page 13: Copyright 2014, Morgan Marketing Solutions, Inc. Make better business decisions – gain peace of mind Richard P. Morgan CMC, FIMC Certified Management Consultant.](https://reader035.fdocuments.in/reader035/viewer/2022062516/56649e455503460f94b3a2bd/html5/thumbnails/13.jpg)
Copyright 2014, Morgan Marketing Solutions, Inc.
Break-even Model - DecisionBreak-even Model - Decision
Case B – hire another salesperson?Sales revenue w/gain expected
Cost of added materials sold $ @same % margin New total variable costs $ (materials + other variable costs)New contribution margin & margin factor (margin/revenues)
New fixed expenses $ (added salary, taxes, T&E, benefits)
New break-even point $ (fixed/margin factor)Sales +/- break-even $ (sales revenue – break even)New operating profit/loss (Sales +/- break-even X margin factor) New percentage profit/loss (operating profit/sales revenue)
Break-even sales level for new hire = $154,000
![Page 14: Copyright 2014, Morgan Marketing Solutions, Inc. Make better business decisions – gain peace of mind Richard P. Morgan CMC, FIMC Certified Management Consultant.](https://reader035.fdocuments.in/reader035/viewer/2022062516/56649e455503460f94b3a2bd/html5/thumbnails/14.jpg)
Copyright 2014, Morgan Marketing Solutions, Inc.
The Other Balancing ActThe Other Balancing Act
• Personal
• Business
• Family
Can you have a life without sacrificing your business?Can you have a successful business still have a life?
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Copyright 2014, Morgan Marketing Solutions, Inc.
Where are you NOW?Where are you NOW?
• Can you truly make these statements?
• “I’ve got up-to-date business and personal plans based on specific goals.”
• “I’ve balanced my business, personal, and family life.”
• “I’m taking care of my family, my employees and myself.”
• “I’ve got all my bases and risks covered.”
• “I’m gaining peace-of-mind & I’m having fun!”
![Page 16: Copyright 2014, Morgan Marketing Solutions, Inc. Make better business decisions – gain peace of mind Richard P. Morgan CMC, FIMC Certified Management Consultant.](https://reader035.fdocuments.in/reader035/viewer/2022062516/56649e455503460f94b3a2bd/html5/thumbnails/16.jpg)
Copyright 2014, Morgan Marketing Solutions, Inc.
Contact InformationContact Information
• Richard P. Morgan CMC, FIMCMorgan Marketing Solutions, Inc.Two Galleria Tower, Suite 100013455 Noel Rd, Dallas, TX 75240
telephone 972.931.7993 e-mail [email protected]
“Accelerating profitable growth by enhancing a team’s ability to create & deploy right actions right now!”