Inciteful

See video's from the program aired on Sunday 18th December 2012. This includes footage from the Business Bootcamp held earlier in the year and includes tips from Anthony Moss and others on building sustainable export markets. There are three short (3-6 min or so) segments. 

 http://au.smallbusiness.yahoo.com/video/-/watch/27612282/kochie-s-business-builders-episode-9-part-1/ 

Incite was very pleased to sponsor the 2011 Premier's Western Sydney Exporter of the Year Award - not least as the core of our client base is located in that region!  

The finalists assembled last night for the award ceremony organised by the Australian Institute of Export. The room was full of the finalists -recognised as the best exporters in their class this year. 

The winner of the Western Sydney Exporter of the year was Cordina Chicken Farms - an Australian owned family business with 65 years experience in the Poultry business. The company exports a complete range of fresh chicken products, covering traditional areas of whole birds, fillets and pieces as well as an extensive range of further processed products to satisfy the increasingly ready to prepare food requirements of consumers.

Incite would like to congratulate Cordina Chicken Farms and indeed all the finalists and the winners of each category. Despite the fact this year has been particularly challenging for exporters all the finalists demonstrated the ability for innovative Australian companies to build sustainable export markets. 

See here http://www.flickr.com/photos/australianinstituteofexport/6265097090/in/photostream

 

Part 2 - Dynamic Export Blog -Understanding Customer Value 

http://www.dynamicexport.com.au/blogs/part-2-find-out-what-value-customers-place-on-your-brand/

See part 1 of my blog post in Dynamic Export -its all about how understanding the value your customers helps you define and refine your strategy. 

http://www.dynamicexport.com.au/blogs/part-1-find-out-what-value-customers-place-on-your-brand/

Look out for part 2

No!  But it is now just one of a number of forecasting tools to measure the performance of your business.

These days, a profit and loss budget is really a benchmarking tool to measure the actual financial performance of your business over a period of time, usually month by month over a financial year.  This answers the question: “how have we performed from a profitability perspective over the year compared to what we expected at the beginning of the year?”

A traditional budget may also be a tool for special purposes such as a sales budget to measure the results of the sales team over a period.  This budget may be a “performance” based budget with sales targets that are higher than in the more realistic profit and loss budget.     

Modern forecasting and performance measurement includes a lot more than traditional budgets.  For starters, these tools focus on Key Performance Indicators (KPI’s) or “business drivers” in all areas of the business not just financial.  This may include KPI’s for: units of sales; products; margins; interest rates; manufacturing and operations; staff and resources; sales and customers; and product development and innovation.  Each business is different and needs to choose those KPI’s that best reflect the performance of that business.  Once chosen, these KPI’s need to be quantified as a forecast or projected result and then actual results measured against the KPI on a regular basis.  KPI’s may be developed from past performance, desired or expected performance, or reference to industry, competition, market or economic data.

The other thing about modern forecasting or “projections” is that they are not static but change much more frequently than in “the old days” as expectations and actual results change.  Pretty much like all things these days!  The times of measuring performance over a financial year based on criteria set at the beginning of the year are over, except in a benchmarking sense as mentioned above.  For example, you probably want to know “what is now going to be the profitability of the business over the next month/ quarter/ year” so we would now prepare a profit and loss “projection” as opposed to a “budget” for the period in question with a focus on the financial KPI’s as chosen above.  This projection would be updated as appropriate based on actual performance and expectations and extended out for a further period of a month/ quarter/ year.  This example would apply to all other KPI’s for the business.

These performance measurements can be incorporated in a regular Business Review or “Management Dashboard” report for analysis by management and other interested parties so that appropriate and timely decisions can be made to grow the business.

So, the budget is not dead just different - “long live the budget!”

With an ever changing world, just think since January 2011 we have had, floods, cyclones, earthquakes and of course broken promises from governments (local, state and federal), all of which provides us a catalyst to reflect on how we have built our businesses.

At Incite our foundations are built of four solid platforms:

• PEOPLE

• PLANNING

• PERFORMANCE

• PROFIT

These four platforms are central to all businesses across all industries. As Business Owners we need to be regularly reviewing our capabilities and resources at our disposal and ensure that we have aligned our development strategies for growth.

So if you are looking to:

• Grow your sales;

• Improve your bottom line;

• Implement marketing strategies that work;

• Get funding to grow your business;

• Outperform your competition;

• Take the business global; or 

• Develop a profitable exit strategy.

The look to see if your business is built on a solid platform based on

• PEOPLE – the right personnel with the appropriate skills and experience;

• PLANNING – an aligned business action plan that covers all aspects of the business and budget to support the execution of its strategies;

• PERFORMANCE – a series of control measures to ensure that the employed resources are being utilised to achieve the optimal return; and

• PROFIT – financial and non-financial goals and targets that truly reflect the real market conditions as opposed to the “nirvana” result.

As Bob Dylan once wrote “Times they are a changin” and yes they are.

Listen to the short podcast of my discussion with Phil Dobbie of BNET.com btalk Australia follow the link here
 http://www.bnetau.com.au/blog/aussierules/winning-at-the-export-game-btalk/7332

Let me know your comments below. 

The impact of the strength of the Aussie dollar for importers and exporters is clearly very different –but in both cases the challenge is to remain ‘strategic’ in your response to it.  

Importers:

Well the pressure is off as your cost of imported goods will been falling or at least not increasing. The question is what to do with the ‘windfall.’ The first thing not to do is to go and spend it all!

The volatility in the exchange markets over the last 5 years has been considerable (March 2006 the Aussie $ was buying 0.72 US$). The GFC, Euro zone debt crisis, recent tragedy in Japan, unrest in the Middle East portends a very unpredictable future in terms of exchange rates.           

This is an ideal time to step back and use the exchange rate ‘windfall’ to build your business, increase market share, invest in new marketing initiatives and if necessary refresh your brand.

Of course your customers will expect ‘competitive’ pricing –and in very price sensitive markets you may need to adjust your prices. However wherever possible I would challenge you to think of non-price related benefits to add value to your product. For example offering bundles - buy three get one free, co-branding with others by offering complimentary products that consumers of your product need. There are many options. 

The key is to think as broadly as possible; perhaps now is the time to run that national promotion you’d planned –upgrade the quality of your catalogue or –invest more into your web-site –or take your social media activity to a whole new level. 

By investing your exchange ‘gain’ back into the business –you might just be improving your customer loyalty beyond that of your competitors who may not have such a long term view. This could be the significant differentiator when the inevitable ‘fall’ in exchange rate happens.

Exporters:

It’s pretty obvious exchange rates have not been kind to Aussie exporters for the last few years. Many exporters have seen reduced sales, tighter margins, loss of market share and in some instances loss of markets.

For companies just starting on the export journey –all “strategic market entry” options are open. Regardless of whether you invoice in AUD or local currencies –the effect of the exchange rate movements will either impact your margin –or it will flow into the end-user price of your products.

For those with established markets often the first reaction is denial “we’ll just ride out this period and hope that it gets better.” Eventually you have to deal with reality and the challenge is to remain strategic.   

So can you be strategic in the face of shrinking margins and markets? There are a range of options –some are outlined below:

• Invoicing currency: If you invoice in AUD now’s the time to think about local currency invoicing –yes your margin will be impacted by the moving exchange rate –but your response to that is then under your control. The importers of your product –distributor-agent-end user –they are already building a ‘hedge’ or a margin on top of the current exchange rate to ‘protect’ them from short term exchange movements. Is it better you control that hedge factor and give them certainty in invoicing in their currency – this gives you greater control over the end-user pricing.

• Strategic relationships: Now’s the time to review your local sales ‘partners’ –distributors-agents–others. Are you working together to deal with the exchange issue –are your local partners the most effective. Now maybe the time to take an objective look at the effectiveness of your in-market support. 

 

• Alternate ’entry-strategies. Now may also be the time to review your market entry model –is it serving you well, is it the model of the future?  Perhaps now is the time to think about manufacturing- assembling or down filling in the local markets to take advantage of reduced freight and perhaps less expensive inputs?

 

• Are there too many intermediaries in your supply chain –can you eliminate a level –perhaps by investing in your online resources and outsourcing fulfilment? Time to set-up your own sales/distribution office and control the distribution costs?

 

There are many ways to respond to a strong dollar –if export is of strategic importance to your business –then perhaps it’s time to review your strategy. Seeking independent objective advice will help to gain ‘perspective.’  

Happy New Year to all

See link below for an 'how to' article written for Indian companies seeking to export to Australia. The guiding principles apply to any company seeking to export to any market. 

 http://membermails.com/wealthtree/news/e-book/html_pages/theopportunities.html

Doing business as a SME is tough at times and in hard times it is easy to cut back especially in the areas of Sales and Marketing. Whilst it is prudent to review the current position of your business and to analyse the value and return on your marketing initiatives and the type and cost of sales being secured it is critical to keep a level of investment in these revenue generating activities.

So the challenge is balance and an SME owner balance is always hard to achieve. Here are a few questions  for you to consider when reviewing the commitment to budgeted spends.

1. Have you undertaken a full analysis of the results achieved?
2. Have you identified the key issues confronting your market?
3. Have you spoken with your major customers to understand how their business is performing?
4. Do you have a number of control realistic measures in place to evaluate the performance of your sales resources and marketing investment?
5. Have you talked with your Sales Team?

Theses five questions will help you to take the initial steps into understanding exactly what is going on and therefore what actions to take. As this calendar year comes to a close now is a good time to "work on" the business as opposed to "in" the business. As your first 2011 New Year resolution commit to spend a day looking at the business and what is going on and then plan. Just because results have may not be what you wanted, cut back on sales and marketing activities, not investing in these areas can lead to a negative impact on the business. Rather review where you are at an take deliberate and calculated actions for your business. One good way to start this would be to attend the Incite Value Creation Workshop which is focused on helping to kick start your business in 2011.