Telecom Business Advisory Initial Meeting
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Telecom Business Advisory Mathews Michaels 1
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Our methodology and practice helps companies increas profitability and shareholder value
Transcript of Telecom Business Advisory Initial Meeting
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Telecom Business AdvisoryMathews Michaels
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Business Health Check
Profitability
Revenue
Cost ContainmentExpanding Relationships
Productivity
Mathews Michaels
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New Sales
MAC
Service Contracts Maintenance
Other
Total Revenue$
Revenue
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• Professional Services
• Solution
• Maintenance• Complimentary
Products• Add-ons
• Lease, Cash, Other
Labour Equipment
ServicesFinance
Revenue Analysis
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Sales Force Effectiveness
• Team Structure• Success Rate of Individuals and Team• Effectiveness of Proposal• Effectiveness of Presentations• Pipeline or Funnel Analysis• Competitive Landscape• Performance Management
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Results
Process
People
Productivity
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Work Force Effectiveness - Process
• Sales Agreement• Customer Expectations• Requirements• Money Available
Expectations
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Work Force Effectiveness - People
• Team Structure• Profitability of Work (New, Service, MAC)• Profitability of Customers• Service Penetration Rates on New Installs• Tech Productivity• Performance Management
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Cost Containment
• Review – Fixed Costs– Variable Costs– Creative Ways to Reduce Costs
• Use of Variable Cost Modeling• Examination of Fixed Costs
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Expanded Partnerships
• Financial Solutions• Complimentary Products and Services– Audio Conferencing– Web Tools and Collaboration– Wireless– Professional Services
• New Solutions• Expanded and Shared Services
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Business Transformation
Current State Benchmark Desired State
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Key Performance Indicators (KPI)
RevenueMargin
Profitability
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40
60
80
100
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Chart Title
CurrentBenchmarkDesired
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Our Goals and Expectations
• To:– uncover and validate organizational strengths – uncover and find opportunities for improvement– provide concrete means to improve Sales– provide the same for Operations and Finance– introduce new revenue streams– create tangible deliverables to drive results– help improve bottom line profitability
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Exercise #1
• Using benchmarking let’s look at a typical $ 5M business– We have four reps that are collectively selling $ 2.5M annually– We have a blended margin of 40%– We have good CSAT ratings– We have 10% attrition in our base– We are making a 10-15% return on the bottom line
• What can we learn from our mix of revenue?
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Revenue
• 50% Total Sales• $ 2.5M
• 15% Total Sales• $750K
• 10% Total Sales• $500K
• 25% Total Sales• $ 1.25M
New Install MAC
OtherService Contracts
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Margin
• 35% Margin • 50% Margin
• 20% Margin• 70% Margin
New Install MAC
OtherService Contracts
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Gross Profit – 40% Blended
• $ 875k Margin • $ 375K Margin
• $100k Margin• $ 625k Margin
New Install MAC
OtherService Contracts
Revenue – Cost of Goods Sold = $ 2M Gross Profit
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Net Profit – 10-15%
• $ 219k Commissions• $525k Other
• $ 50-75K Commissions
• $225K other
• $10k Commissions• $60k Other
• $ 125k Commissions• $375 Other
New Install MAC
OtherService Contracts
Revenue – All Costs = $500k - $750k Net Profit
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Questions to Ask?
Sales• Are we netting what we expect
from the team and individuals?• Are we leveraging new sales
effectively to generate higher margin, lower cost revenues?
• Does everyone sell or at least generate revenue?
• Do we have the right structure?• Do we have effective
Performance Management in place?
Operations• Are we effective in delivering our
solutions on time, on budget?• Do we have good CSAT Ratings?
– What is our attrition rate?• Does Operations and Corporate
generate revenue?– Can they? How?
• Do we have the right partnerships in place to drive our desired results?
• Do we have effective Performance Management in place?
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Questions to Ask?
• What would a 2% increase in margin mean to our net profit? – $ 100K or a 20% increase to the bottom line
• What would happen if we increased average sales per rep per month by $ 10K? – $ 30K bottom line
• What would happen if we were able to sell service contracts, at time of sale to 50% of all new sales?– $ 100K or a 20% increase to the bottom line
Once Corporate, Fixed and Other Costs are covered little if any additional costs apply to incremental revenues
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Why Mathews Michaels?
• We know the industry• We have the relevant experience• We have the necessary expertise• We understand your business• We work with your team, compliment your
existing strategy• Through you, we get results
