Business Yardsticks

1
Business Yardsticks

• Recommended infrastructure for each Growth Phase
  of your Company

2
Phase I - Systems and IT

• Needs determination
• Hardware/software selection
• Implementation planning and conversion

3
Phase I - Sales and Marketing

• Product mix determination
• Product pricing and break-even analysis
• Build permanent customer base
• New product development or selection
• One-year sales plan

4
Phase I - Operations

• Basic resource scheduling
• Purchasing and inventory control
• Production (operations) performance reporting
• One-year production plan

5
Phase I - Management and Leadership

• Owner conflict resolution
• Leader selection
• Determine responsibilities of key jobs

6
Phase I - Personnel

• Basic benefits
• Basic wage and salary
• Balancing owner compensation with needs of
  company

7
Phase I - Business Strategy and Planning

• One-year business plan
• Strategy Emphasis Survival, Growth and
  Profitability
• Clarify business niche
• Owner goals versus abilities

8
Phase I - Business Strategy and Planning

• New product or service strategy
• Growth strategy Decision to stay in Phase I or
  become Phase II or III
• Ownership continuity and funding

9
Phase II - Management Emphasis

• ACCOUNTING AND FINANCE
• Improvement and expansion of basic accounting and
  financial reporting systems
• Financial statements
• Cash flow projections
• Operating budget
• Capital budget

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Phase II - Management Emphasis

• ACCOUNTING AND FINANCE (continued)
• Departmental budgeting
• Return on investment accounting (ROI)
• Solidify controllership position
• Create controllership position
• Financial data interpretation

11
Phase II - Systems and IT

• Needs determination
• Hardware/Software selection
• Management/Technical personnel selection
• Core Systems

12
Phase II - Sales and Marketing

• Service and product life cycle planning
• Create marketing function
• Analysis of competition
• One-year sales plan

13
Phase II - Operations

• Facilities and equipment planning
• Product (operations) control
• Finished goods inventory control
• Cost accounting
• One-year production plan

14
Phase II - Personnel

• Incentive sales compensation
• Management and technical training
• Employee performance evaluation process
• Compliance with government requirements
• One year manpower plan

15
Phase II - Business Strategy and Planning

• One to three-year business plan
• Strategy Emphasis Growth, Survival and
  Profitability
• Product or services strategy
• Design action plans as part of business planning
• Goal Become a Phase III Company

16
Phase III - Management Emphasis

• Accounting and Finance
• Management-by-exception reporting systems
• Long-range financial plan
• Create chief financial officer position or
  upgraded controller position
• Financial data interpretation
• Budgetary process

17
Phase III - Management Emphasis

• SYSTEMS AND IT
• Upgrade to meet needs of an expanding company
• Selection of management and technical personnel
• Intermediate range IT planning

18
Phase III - Management Emphasis

• SALES AND MARKETING
• Market share analysis
• Market expansion plan
• Sales forecasting
• One-two year sales plan

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Phase III - Management Emphasis

• OPERATIONS
• Production (operations) planning to coordinate
  with marketing and sales
• Cost reduction (efficiency)
• RD autonomous from production
• One-two-year production plan

20
Phase III - Personnel

• Profit related compensation plans
• Executive compensation planning
• One-two-year manpower plan
• Compliance with government regulations

21
Phase III - Management and Leadership

• Succession management planning
• Management development
• Managerial accountability

22
Phase III - Business Strategy and Planning

• One-three-year business plan
• Strategy Emphasis Profitability, Growth and
  Survival
• Acquisition and new venture planning

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Phase IV- Management Emphasis

• ACCOUNTING FINANCE
• Information, budgeting and control systems
• Develop role of VP of finance or CFO
• Refinement of budgetary process

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Phase IV- Management Emphasis

• SYSTEMS IT
• Emphasis is on centralization at headquarters
• Build systems to provide information and control
  long term IT plan
• Selection of management personnel

25
Phase IV- Management Emphasis

• SALES MARKETING
• One to three year sales plan based on forecasts
• One to three year marketing plan
• Responsibility dispersed

26
Phase IV- Management Emphasis

• OPERATIONS
• One to three year operations plan
• Responsibility dispersed
• Continuous improvement

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Phase IV- Management Emphasis

• PERSONNEL
• Management development training
• Problem solving training
• Team building training
• Executive compensation planning
• Compliance with government regulations

28
Phase IV- Management Emphasis

• MANAGEMENT LEADERSHIP
• Succession management planning
• Maintain entrepreneurship
• Management development

29
Phase IV- Management Emphasis

• BUSINESS STRATEGY PLANNING
• Develop strategic plan
• Satisfying customer needs
• Care and feeding of employees
• Emphasis on remaining flexible
• Strategy emphasis profitability and growth
• Acquisition and new venture planning