IPEX - How to be More Profitable
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How To Be More Profitable and Successful Tips For Survival In An Economic Downturn Plus, How To Control Costs And Remain Competitive In The Face Of Recession To be successful, a company must focus as many of its resources as possible on the business itself, its core competencies and revenue generating activities. Whilst the company’s underlying infrastructure is necessary for doing business it does not directly produce revenue. The `bottom line` is that if a company can minimise the costs of doing business and maximise the focus of its resources on its core competency, then the company will be more profitable and successful. As such, it makes sense to examine infrastructure related expenses, and see if they can be reduced through outsourcing. Often at times, an outsourcing company can provide a better service than what can be provided in house, but at a lower cost, with efficiency + effect and with less complexity. This not only reduces costs, but it also frees up staff to focus on the company's business objectives. This will increase sales and net profit. As critical as email is to most companies, it is important to remember that a company's mail servers are a part of the company's infrastructure, and are not usually directly related to the products or services that the company offers to its customers. However, without email, a company can also grind to a halt, with orders not being received and important communication not getting through. It therefore makes the most sense to outsource the company’s email solution to an experienced provider to manage. Although the reasons behind this choice are mostly financial, businesses find the ability to shift the responsibility of operations as well as the responsibility of complying with various federal regulations more to their benefit. This will be very successful and reduce costs plus gain efficiencies. For example Microsoft Exchange Server (the most widely deployed business email solution) is one of the most complex Microsoft products ... With complexity, comes cost due to the expertise and support required to keep it running smoothly. Alongside this comes the initial hardware acquisition costs, and the cost of the Windows and Exchange Server licenses paid to Microsoft. More costs come in the form of spare parts, overtime for the administrative staff, especially if you want 24x7 reliability, and other maintenance related expenses. Outsourcing your mailboxes to a Mail Hosting company not only allows you to avoid the initial start up costs of deploying an Exchange Server, but the ongoing costs are usually less as well. The reason why this is possible is because Mail Hosting companies typically divide server resources among multiple clients. This means that several companies are sharing the expense of the hardware, software, as well as monitoring and maintenance costs, rather than your company having to cover the entire costs. CAVENDISH
Transcript of IPEX - How to be More Profitable
How To Be More Profitable and Successful Tips For Survival In AnEconomic Downturn
Plus, How To Control Costs And Remain Competitive In The FaceOf Recession
To be successful, a company must focus as many of its resourcesas possible on the business itself, its core competencies andrevenue generating activities. Whilst the company’s underlyinginfrastructure is necessary for doing business it does not directlyproduce revenue.
The `bottom line` is that if a company can minimise the costs of doing business andmaximise the focus of its resources on its core competency, then the company will bemore profitable and successful. As such, it makes sense to examine infrastructure relatedexpenses, and see if they can be reduced through outsourcing. Often at times, anoutsourcing company can provide a better service than what can be provided in house,but at a lower cost, with efficiency + effect and with less complexity. This not onlyreduces costs, but it also frees up staff to focus on the company's business objectives.This will increase sales and net profit.
As critical as email is to most companies, it is important to remember that a company'smail servers are a part of the company's infrastructure, and are not usually directlyrelated to the products or services that the company offers to its customers. However,without email, a company can also grind to a halt, with orders not being received andimportant communication not getting through. It therefore makes the most sense tooutsource the company’s email solution to an experienced provider to manage. Althoughthe reasons behind this choice are mostly financial, businesses find the ability to shift theresponsibility of operations as well as the responsibility of complying with various federalregulations more to their benefit. This will be very successful and reduce costs plus gainefficiencies.
For example Microsoft Exchange Server (the most widely deployed business emailsolution) is one of the most complex Microsoft products ... With complexity, comes costdue to the expertise and support required to keep it running smoothly. Alongside thiscomes the initial hardware acquisition costs, and the cost of the Windows and ExchangeServer licenses paid to Microsoft. More costs come in the form of spare parts, overtimefor the administrative staff, especially if you want 24x7 reliability, and other maintenancerelated expenses.
Outsourcing your mailboxes to a Mail Hosting company not only allows you to avoid theinitial start up costs of deploying an Exchange Server, but the ongoing costs are usuallyless as well. The reason why this is possible is because Mail Hosting companies typicallydivide server resources among multiple clients. This means that several companies aresharing the expense of the hardware, software, as well as monitoring and maintenancecosts, rather than your company having to cover the entire costs.
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Other benefits include:
• Reliability - hosting companies have the resources to have a fully redundant andclustered environment
• Disaster recovery - hosting companies are more likely to have a significant backups setup on a regular basis, so if disaster strikes data can be restored quickly and efficiently
• Regulations - regarding the security, management, and retention of email. Complyingwith these regulations is as tedious as it is expensive, with a hosting company able to doit for you!
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Tips For Survival In An Economic Downturn
1. CASH IS KING
Manage cash - if you are out of cash and out of credit, you are out of business. You needa good 13 week cash forecast, generated NOT from the income statement but from adetailed understanding of receipts and disbursements. Monitor trends in your cash flowto keep on top of any sticky situations.
2. COLLECT WITH PASSION
On a related point, manage receivables aggressively. Businesses are holding on to theircash longer than before, resulting in late payments. These late payments are having aripple effect through the SME community. Receivables will trend up, and some of yourcustomers may become troubled as well. Do not keep extending credit. Right now youshould invest into the very powerful business model `Be Paid On Time` MasterClassModel.
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3. DO NOT DEPEND ON ANYONE
Keep a close eye on your suppliers, and have alternatives. In a downturn, some of yoursuppliers may become troubled as well, and you need to think about alternative sourcesfor your critical inputs.
4. YOU CAN ALWAYS CUT MORE
You can forecast expenses, you cannot forecast revenue. Look for places to cutexpenses. When times are good, companies tend to add staff and expenses that are niceto have, but not critical. It’s time to take a fresh look at those.
Keep focus on core markets and spend money solely in those areas. Avoid putting cashand time into areas that have proven less profitable.
Many companies begin by cutting advertising / marketing budgets. This can be amistake. Instead of cutting these budgets, review the methods you are using. Are theremore cost effective routes to market? Does your current strategy bring in the rightresults? If not, rework your efforts to deliver the best possible results.
If you have debt financing, stay in communication with your creditors. Do not wait untilit’s too late before speaking with your lender. When you are already in a crisis andhaven't provided any warnings, situations may prove tricky. Maintain constantcommunication. It will help you should you ever need to renegotiate terms.
6. BUSINESS SURVIVES ON THE BOTTOM LINE. NOT THE TOP LINE
Do not worry about growing revenue. Worry about growing profit.... Make sure youunderstand what drives profitability in your business. To spur demand, you may have toget creative with pricing and product offerings, and you do not want to put somethingout there that is actually unprofitable.
Consider diversifying to make the most of potential opportunities. Others’ weaknessesand instability could work to your advantage. You never know – you may identify a newmarket.
Also, take on board a Non Executive Director with skills, experience and wisdom who hasbeen successful in business. This is an investment not a cost!
How To Control Costs And Remain Competitive In The Face Of Recession
As the global economy stares in the face of recession, small businesses are trying tokeep their heads above water. The dilemma is trying to control costs while also ensuringthey remain competitive.
The first areas where budgets are cut is often IT and technology or marketing, howeverboth are part of the life-blood that keeps businesses running. Without marketing how canyou, as a small business, grow? And without IT and technology, you may becomeinefficient, slow and unresponsive. Therefore the challenge faced by small businesses ishow to invest sensibly, while also being efficient and cost-effective. It sounds like acontradiction, but it is possible!
A web presence is part of both of these functions: Marketing as it is the face of yourbusiness and most often a source of revenue whether directly or indirectly; and IT, asyour website is only working for your business, when it is live – if a website fails then itwill cost you awareness as well as online sales. For a small business your website is evenmore important, it is an opportunity for you to compete on a level playing field alongsidelarger competitors. A small business can have a `big reach` if you optimise your websiteand providing it is always available.
It is the technology piece in particular, of creating and managing a hosting solution foryour website (or any online application) that can be a major challenge for smallbusinesses. The decision on how to host your website is very important. Hosting ityourself may appear to be a low cost solution initially, but when you consider the capitaloutlay for hardware, plus the technical ...skills needed to provide support, as well as thespecialist security expertise, which is vital for a company doing business online – it allsounds a bit daunting for a small business. Not to mention the internet is 24/7 so yourwebsite needs to be as well.
Entrusting your website hosting to a hosting provider removes the enormous burden ofhaving to worry about whether your website is online and that it is secure. However ifyou decide to go down the hosting route, you must select a partner who can deliver,especially important in recessionary times. Your hosting provider will take the risk of theupfront capital outlay of the servers and security devices such as firewalls, therefore youneed to ensure the provider themselves has enough cash to do this on your behalf. Youcertainly do not want to choose a provider who is struggling themselves as if they do gounder, what happens to your website then? Will it go down with them?
As a business you need to be confident that your hosting provider is credible, hasexperience and is financially stable. They need to guarantee 100 per cent network uptimefor your website and deliver 24/7 support to get your site back up and running as soonas possible if hardware fails. Of course they must also have the knowledge to help andadvise you on how to develop your solution as, hopefully your business grows. Thismeans they are truly your partner and a resource you can use, to enable you to focus onyour core business – keeping existing customers and generating new ones.
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I am here to help you and your business be more successful, so give me a call and wecan discuss the way forward to increase the `bottom-line` of your business.
Colin Thompson
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