Tag Archive for: Profitable business

We wish you a Merry Christmas…

…and a Happy New Year.

As 2023 starts to draw to a close, we would like to extend our seasons’ greetings. We hope you get to enjoy some relaxation and fun during the festive time. To all our clients, present and former, it has as always, been our privilege to support your businesses to reach and extend their potential. Our intention is always to work collaboratively with you to meet the goals and objectives for your specific business. We look forward to continuing our work with you in 2024. If you have not engaged our services this year, please know that the door is always open if you are keen to reinvigorate your business performance, as we enter 2024. We can be contacted at https://gibsons.com.au/contact/.

The Gibsons team.

Our services

As consultants each with a career lifetime of industry experience, there’s little we haven’t seen and little we haven’t dealt with in business. Each Gibsons business consultant, in addition to their personal area of career specialisation, has extensive, hands-on practical experience meeting challenges with solutions in a wide variety of scenarios, industry sectors and business model types. We are not theorists. We bring advice and assistance that has been “road tested” and known to deliver productivity increases, improved sales, and increased profitability in a business just like your own. We have a keen eye for the issues and opportunities that need actioning, and we’re here to help you build a stronger business right across the functions of people, marketing, processes and profit.

Let us take the following tasks off your list:

  • Strategic analysis and business plans.
  • Becoming an Employer of Choice
  • Marketing and sales plans.
  • Brand development and promotion.
  • Business process modelling.
  • Improving systems and workflows.
  • Optimising organisational structure.
  • Pinpointing skills gaps and implementing training.
  • Reviewing financial performance.
  • Profitability improvement programs.
  • Managing organisational change.
  • Mentoring to develop executive leadership.
  • Business process modelling.
  • Mergers and acquisitions.
  • Technology strategy and implementation.

Our business pillars

Map out a better business with Gibsons. The first step on the road to success for any business is a strategic analysis. Our analysis reviews your current position, develops a vision for the future, and evaluates the strategy options available to take your business from where it is now to where you want it to be.

Once we’ve determined the best strategy, we’re able to develop a strategic business plan with you. This plan provides the detail needed across those key business pillars we always come back to – People, Marketing, Process and Profit.

People – Empower the agents of your success. Many people say their people are their most important resource, but do they act that way? Gibsons Business Consulting offers a range of people management services and capabilities to help you build a team that will drive your business forward.

Marketing – build a market-focused operation. Gibsons offers expert, tailored solutions beyond the scope of most marketing agencies because we approach marketing through the business-strategic lens. Whilst Gibsons excels at coordinating the tactical marketing activities involved in marketing promotion, we’re well known for strategic marketing which is the foundation that effective advertising, public relations and sales promotions should be built on. Ensure that everything about your business is meeting needs and reinforcing why customers should buy from you and not your competitors.

Process – build practical processes for greater productivity, efficiency, and profit. The primary reason for implementing business systems is to build consistency and, therefore, predictability into the quality of outcomes. Better systems and processes also establish the means for day-to-day operational activities to manage themselves, leaving managers with the time they need to deal with exceptions and to work on business development.

Profit – maximise business profit and cash flow. The aim of any business is to generate sustainable profit and positive cash flows consistently. If a business is unprofitable or isn’t cash positive, it can’t survive. It isn’t a viable business. We make sure you have the right measures and review processes in place so you can take informed action when you need to and keep your business on track.

Structure and process change to turnaround business performance.

It’s rare that we are approached by a company requiring assistance where there is clarity about why business performance is not as expected, and what should be done to fix this. Often, there is an understanding of the problem – a drop in sales, financial targets not being met, limited growth and so on – but the ‘why?’ of the issue is not clear, nor are the actions required to turn things around. We may enter our work with a client having been given one brief, only to find that other issues come to light as we investigate the problems that are taking place.

A manufacturing and installation company supplying the construction sector reached out to us for support with cited business performance issues. Sales levels were falling, and the company was experiencing a sharp decline in their Earnings Before Interest and Tax from a level of over 10% to only 2.5% of sales. We conducted a thorough review of the business’ operations and in addition to the problems with sales levels and EBIT, identified an issue with their margins for quoting and pricing. The company simply were not running at a level of margin that was long-term sustainable. They had significant quality and warranty issues which were cutting into profit margins, and there was poor labour management and supervision in place.

Without the right business structure and processes in place, it becomes very difficult to identity the ‘why’ when things go wrong. Clarity is missing, and as such appropriate actions are unlikely to be taken to turn things around.

Our business review identified the key areas to address, and we initially focused on implementing management review practices and reporting within the business to build an understanding of why these difficulties were occurring. We provided training and coaching to the company’s accountant to better analyse and report issues as they arose, and to make appropriate and timely recommendations to the management team. Management and supervision practices were established within production and management teams, and training and coaching of key management staff was enabled. Project management processes were also set up for all new projects initiated. A thorough review of the sales team and sales processes was conducted, and we established a sales management program with a priority to refocus the sales team. Alongside this, pricing and quoting margins were reviewed with a new pricing and quoting policy agreed.

After 6 months of working with this organisation we saw sales return to their normal levels, and after 9 months of sustained implementation of our recommendations, profits returned to 12% of sales. No significant quality issues have occurred for 6 months, and margins are stronger than ever with labour efficiency dramatically improved. The company now has high accountability throughout the management team, reduced stress, and happier staff with more satisfied customers.

Business change takes time, and modifying structure and processes doesn’t immediately impact the bottom line. It is with consistency and perseverance that business transformation is possible.

The question we often get asked is “why can’t a company just do this for themselves – why do they need an external advisor?”. In the case of this company, the management structure and processes were not in place to support the company to prevent these issues occurring. Without a significant and appropriate change to company structure and ways of working, change was not possible. Often it takes someone outside of a business to identify the change required, and once initiated, it can be easier to align with business priorities to meet, and often exceed, performance goals and success indicators. It’s also never an easy and quick fix.

Find out more about our strategic approach to unearth the challenges within your business and set you on the right path for success. Reach out for a no obligation, informal chat with one of our Senior Consultants today to chat about how we could help you and your business, call us (07) 3025 3220 or email [email protected].

[Photo credit: Minku Kang]

What’s holding your business back?

When you’re looking to grow your company but it’s ‘stuck’ it is useful to conduct a full strategic analysis to determine what’s going on. It might not be what you think. Far too often, businesses will make assumptions on the issues preventing their company meeting goals and achieving desired outcomes. These assumptions are rarely based on anything substantial, or there’s a focus on one key issue at the exclusion of all others. To truly understand what’s holding your business back, an objective analysis of all the issues, and the company overall are essential. This can be tricky to conduct in-house, where objectivity can understandably be somewhat clouded. You may believe that you have the right structure in place and the right team to achieve the profit margins you’d like, but often this is not the case.

Take the example of one of our clients – a small manufacturing and installation company operating within the construction sector. Gibsons were approached to conduct a strategic and business plan, with the objective of determining the issues at play that were preventing sales and profit growth. As soon as the planning process was in full swing, we discovered key factors that were holding the company back. Primarily these centred around people and processes. Key staff were modelling poor values and performance, there were manufacturing and installation process inefficiencies, and there was the absence of clear and consistent communications across the business and the management team. People were unsure who was accountable for what, they were disengaged, and were struggling to see a distinct company direction.

Once you have the right people in the right place doing the right things, a business can tackle operational and process issues that might also be holding them back. But you must get the people bit right first.

In our experience, people issues are often the cause of the most serious business problems and can be the most challenging to resolve. However, if ignored they can significantly endanger a business, or at the very least, leave it with a performance and success level far below true capability and potential. We often see attempts to ‘fix’ staff issues which in turn create more problems as structure and processes are used to ‘work around’ people difficulties, which rarely resolves the concerns, and instead adds significant cost and time to the situation.

To address these challenges, Gibsons conducted a thorough review of management practices to build a culture of understanding and a process of consistent and regular review. Next, we helped the company to develop the right business structure to support continuous improvement and accountability throughout its personnel. Progressive review of performance of key personnel alongside the company’s management team enabled the rationalisation of staff via retraining, mentoring, role changes to better suited skill sets, and in some cases, retrenchment. A complete review of operational processes and factory layout was then enabled with confidence that the recommended changes could be acted on with best immediate effect.

Build an effective business structure that puts the right people with the right skills into roles that best suit them, is key to ensuring a business with long-term and enhanced profitability.

The results of Gibsons’ work speak for themselves. Over a 3-year period, working closely with Gibsons, this business increased its profit on sales by 8-10%, culture and customer engagement improved, and there was a $10m rise in turnover. Importantly, the owner is now in charge of a highly self-motivated team with an appropriate structure to support the continued growth of the business.

Find out more about the Gibsons’ approach to ensuring your business is on the right path and your team are focused on what matters, through our in-depth strategic review.

Business growth through sales culture change

It would be understandable to think that issues related to sales are down to the sales process, pricing and the overall sales strategy. This is after all what drives a business’ sales levels and its approach to selling in the marketplace. However, dig a little deeper, and you’ll see the massive impact the culture of your sales team has on the implementation of your strategy. Perhaps the sales strategy is strong and appropriate for your offering, but how is it being executed and how is this being managed?

We were engaged by a major player in the Australian construction landscape to implement changes to their sales process and pricing structure to optimise margins. Our client’s construction reinforcing product had been used in most of the iconic structures in Australia including the Sydney Opera House, Melbourne’s Westgate Bridge and freeway, and Brisbane’s Gateway bridges. The company was well known and well established (100 years).

It initially appeared that the issues impacting sales and ultimately margins were related to the sales strategy. However, after a period of discovery, it became clear that sales performance was impacted primarily by the people within the sales team. While dedicated and committed, the sales team were agreeing to meet every customer requirement. There’s nothing wrong with putting the customer first and focusing on customer needs, but in this case, it resulted in unclear accountabilities. If you agreed to everything, who is going to follow through with the requests, and importantly can / should they be met? Inefficiencies were the result, as the team lacked clarity on what to prioritise and how.

Develop an effective sales strategy that is fully understood by staff to ensure consistency and accountability, but that also supports an effective management of performance.

In this case, there was no ‘organisation’ behind the sales team effort. To address the culture and performance inequities, Gibsons worked to embed processes and practices designed to clarify accountabilities, and to manage sales performance both company wide, and for sales team personnel. In total, 6 improvement programs were established and implemented over a 6-month period. This phased roll out started with the company’s Queensland team and are being progressively implemented across the rest of the business.

No matter how astute a management team is, often there are issues that from the inside are easy to miss, or people are too ‘close’ to the challenges, to effectively manage them. A Gibsons Senior Consultant who lives and breathes business improvement, will quickly get a feel for your business and be able to identify areas for improvement.

With accountabilities now understood and aligned across the entire sales process, these improvement programs have enabled the sales team to be more focused. An ‘achievement’ sales culture that the company was seeking has been established and revenue targets are being exceeded. The business growth potential identified has been enabled through this sales team reinvigoration. As is often the case, it’s not always that a strategy is wrong for your business. Often, the processes in place for implementation and management are not there; or are misunderstood or inappropriately executed by your team. Ensure your people know what they are accountable for and set up ways to manage this. Support your business’ potential by providing clarity in roles and expectations, and transparency in how this aligns with your overall company objectives.

As with many projects Gibsons work on, the reason we are called in is not always the cause of the challenges being faced. A Gibsons consultant is accustomed to scanning operations from a more objective viewpoint, with the benefit of deep experience gained from scores of business improvement projects. They can almost immediately spot problem areas that you may not be aware of. Find out more about the services we offer to support businesses and let us take the following tasks off your list:

  • Strategic analysis and business plans
  • Becoming an Employer of Choice
  • Marketing and sales plans
  • Brand development and promotion
  • Business process modelling
  • Improving systems and workflows
  • Optimising organisational structure
  • Pinpointing skills gaps and implementing training.
  • Reviewing financial performance
  • Profitability improvement programs
  • Managing organisational change
  • Mentoring to develop executive leadership.
  • Business process modelling
  • Mergers and acquisitions
  • Technology strategy and implementation

$2.5 million sales growth in only 2 years

While most business owners know the importance of an effective strategy for their company, it is also very easy to be drawn into the day-to-day operations and lose sight of the larger picture. As an owner, you can find yourself becoming far too hands-on and create a position where you are completely indispensable. Without you, things just don’t and can’t happen effectively. This can work initially, but over the longer term, what happens when you go on annual leave, or want to expand the business, or are ready to retire?

This was the situation a construction supplies business found itself in. The owner was looking to retire but the business was not able to operate effectively without him. The owner had focused on daily operations and as a result, over the years, operational health and safety, quality, good processes, organisational structure, and human resource management frameworks had been overlooked. The 3% Earnings Before Interest and Taxes the business was returning was insufficient for the invested efforts.

Business structure and the people in your business are key to any company’s success. Get the structure right, and people in the right roles operating well and cohesively with each other, and the business to create a winning situation.

Our role was to look at appropriate strategic planning with the development of a business and succession plan. The company’s current processes and structures had created a divide among management and production teams, very much to the extent of an ‘us and them’ culture. There was low engagement and limited accountability, with the business reliant on just a few individuals. While functioning, the business was in a fragile state.

Turning this $7 million business into a $9.5 million one, was a 2-year project with Gibsons advisors involved throughout. The first step looked to address the management structure. Existing roles were firmed up, some roles were moved, and others recruited. A new General Manager was appointed, and a mentoring program established to ensure close guidance and a sounding board in the implementation of other improvements. A better framework for management meetings as well as performance reviews and reporting were established. Improvements such as the Gibsons Employer of Choice program designed to invoke culture change and accountability, were actioned.

Get your team right and a structure to support this and you set your business up for success. Don’t, and you find yourself working hard without seeing results.

With the right people in place, doing the right things, the second step was to improve production processes via the establishment of a Production Success Team and the implementation of 5S processes and practice on the floor. Next, we addressed sales and marketing to build awareness of the company offering and to grow their market. Customers were interviewed to determine easy wins and long-term improvement opportunities. A rebrand was recommended and initiated.

The results were a $2.5 million sales improvement (to $9.5 million) with an increase in Earnings Before Interest and Taxes to 12%. Operational performance greatly improved and there is capacity to maintain this performance. Further growth is predicted, and the owner can consider retirement in the knowledge that the business now has a highly accountable and functioning team, management structure and strategic direction.

Find out more about the Gibsons approach to strategic planning to set your own business on the path to success.

Maximising your returns through full product utilisation.

Clients often reach out to us when profit levels don’t match expectations and when there is a sense that the business could be doing more. Inviting a knowledgeable and experienced third-party consultant like Gibsons in, provides the opportunity for a deep dive into what is happening in your business.

A strategic review of your business provides insight into opportunities that could be exploited and how. It provides reassurance of risks to mitigate against and the steps needed to do this.

Frequently, when we first engage with a new client, we will take them through a strategic review. This may be a company-wide review which is designed to unravel key business concerns and to determine why things are not working as they should. If the business has a specific goal in mind, we will instead conduct a more specific strategic review designed to evaluate the business and the market; and to outline the steps required to move the business in the direction required. This was the case with SSS Strawberries, a producer of fresh berries who were facing the challenge of how to best utilise their non-premium quality and end-of-season fruit.

SSS Strawberries were not maximising potential returns over the entire growing season and was looking to change this. The owners had identified that freeze drying the fruit would enable an increase in revenues and margins but looked to Gibsons to identify how best to enable this. We were commissioned to develop strategic; business and feasibility plans to advance this new product line and take it to market.

We identified 3 stages to bring this product to market: a research and design phase, capital investment, and finally full production with future growth as sales increased and capacity levels were met. We handpicked a team of specialists across the areas of branding, food product commercialisation and packaging, to support the research and design phase for bringing the product to market. This phase focused on determining a name – Gina’s table, brand identity and packaging for the product.The results of this research were crucial as they would go on to shape the entire marketing and sales approach. They would also provide confidence that the direction and decisions made were appropriate, before significant investment in capital took place.

To determine the feasibility of bringing freeze dried fruit to market, we looked firstly at the target consumer – what were their motivations to purchase and their buying behaviour, what competing products did they already purchase, why would they choose this product over others and how could we influence this. In-store research regarding purchase behaviour tracking and Q&A sessions supported this. We looked at the marketplace – what products or competitors were already selling similar products, what consumer needs were being met, price points and packaging. We went on to consider product positioning in the market along with packaging, Point of Sales materials, merchandising, channels to market and the overall brand – tone of voice and brand personality (essentially the look and feel of the brand).

To successfully determine the feasibility of a new product launch, you must fully understand the product and how it will better meet the needs of consumers than competitors. Without extensive research and clarity around your product’s positioning in the marketplace, as well as a strong and consistent brand identity, you are unlikely to succeed.

It was concluded that the product would be marketed to 3 consumers: wholesalers (for sale to end consumers and processors), retail distributors, and online direct to end consumers. The next steps in taking the product to market is capital investment as well as the development of a robust marketing plan to promote the product nationality through all relevant channels. Expansion and conversion of premises as well as the installation of new freeze-drying capacity and pre and post processing equipment to package, store and ship the product are required. Once production is up to capacity and as sales demand grows, further expansion is possible to include a variety of fruits, herbs and food for sale under the company’s own brand or by other processors. Marketing would be ramped up in support of this.

Preparing SSS Strawberries for a national food product launch and extending its product line was no small feat. It is a great example of the full breadth of experience and expertise that Gibsons Consultants provide to clients across business strategy, human resource management, marketing, process development and profit building. For a guiding hand with your business, contact us for a no obligation chat with one of our experienced consultants.

Webinar invite: Join us as we chat with Fabric Solutions (22 Oct)

Join us in an AME (Association for Manufacturing Excellence) hosted FREE online ‘Fireside’ Chat this Friday (22nd October 11am-12pm AEDT). We’ll be talking with Rohanna Abberton, the General Manager for Fabric Solutions Australia, about our transformational work with them over the past 3 years. Learn about how we’ve supported their business to improve operations – enhancing the company culture and profitability levels, as well as enabling the owner to progress down the path to succession. Specific areas that we’ll be discussing include our work in:

Register your place and find out more at: https://www.ame.org.au/email/8ca7da1f-7036-4bd9-b5c1-7175a511dd68/e8178aaa-ff4a-4d5e-82c0-b70f1646f71e?fbclid=IwAR0AGSby86uAoNnsEyI2U_m70tJw2sogESgam97D1fopcflH7UHMQ4xxb4c

Why strategic thinking was a $10m game changer for this client

Even when your business is going well, spending time to take a step back and address the current market climate, and your company’s strategic priorities and direction is a must do for any senior manager. But when turnover is growing and profit margins are good, it can be very easy as a manager or business owner to fall into the trap of becoming too hands on. You end up spending your time focused on the day-to-day business operations without giving much thought or time to the company’s future strategy.

Without a strategy for the future of your business, the company and its management will be ill prepared to address issues as they may arise. A lack of direction and clarity in the company’s focus and objectives can result in poor decision making and inappropriate business systems and processes.

A lack of strategic direction is very common and will undermine the real potential of any business. Without a plan and a deliberate focus on where your company is going and how it will get there, it’s unlikely ever to be achieved.

Gibsons was engaged to support a heavy earthmoving equipment company with exactly this challenge. Involved in the repair, overhaul, field service and spare parts for heavy earthmoving equipment, the company’s National General Manager had become too involved in the business’ daily operations. He had no time to work on high priority strategic concepts for the business. He saw the benefit of having an experienced person to act as a sounding board to challenge and discuss his ideas in helping the business prepare for the future.

The company had built a reputation for high quality services and parts across a diverse portfolio of sectors with another division planned. Turnover was at $8m but the company was keen to grow. The need for an external expert with extensive experience in business improvements was sought. Gibsons was able to bring confident insights, ideas and techniques from decades of experience in supporting clients develop the most appropriate business strategies. Stimulating and challenging management team thinking, and ensuring the best approach was actioned.

Gibsons developed an aggressive growth strategy underpinned and supported by significant organisational changes. A management review process was implemented; and mentoring and coaching for Senior Executives commenced. A new Human Resources structure was embedded into the organisation accompanied by a change in company culture. Several process improvements were initiated to streamline operations and provide staff accountability. The resulting impact of strategic change to this company – a growth from $8m to $18m in only 4 years.

During a period of change management, it is essential to get the structure right – management, Human Resources and processes. This is even more significant during a period of growth.

During Gibsons’ work with this company, a significant risk was identified. The company had a large customer who was contributing a third of the organisation’s turnover. The impact on the company of losing this client was significant, and at the time of Gibsons’ engagement no strategy was in place to mitigate this risk, or what to do if it was realised. With Gibsons’ help, the dependency on this one client was reduced over time and measures were put into place should the client be lost. As a result, when the client did leave years later, the company was able to compensate for the loss due to this extensive planning and preparation work.

Gibsons Senior Consultants bring with them decades of experience and are valued for their extensive knowledge and insight into business improvement initiatives. Providing ideas, tools and techniques to challenge the status quo and enact considered change as needed, Gibsons continues to be an indispensable business advisor to this company.

Reviewing Financial Performance

Put Your Financials to Work in Your Business in 4 Simple Steps

 

STEP 1: Decide what you need to know

Financials – Business owners and managers need accurate and timely financial information to empower their decision making.

You at least need to know the answers to these questions:
• How profitable is my business?
• How much can I borrow?
• Can I pay my bills as they fall due?

Decide what measures you need to have in order to feel comfortable about the performance of the business and put reporting processes in place.

Key Business Measures – Business owners and managers need to know the key numbers that drive the performance of their business. Find out what they are, and MEASURE THEM. They are the heartbeat of your business.

STEP 2: Measure what you need to know

Financials – Produce a Profit/Loss Statement, a Balance Sheet and a Cash Flow Statement regularly.

Key Business Performance Measures – Measure the heartbeat that drives the performance of your business.

STEP 3: Understand what you need to know

Empower yourself with information and understanding about your business. Review your financials and your key business measures regularly.

STEP 4: Act on what you have learnt

Make informed decisions and take action based on the understanding you have gained about your business. Ensure constant improvement of your business.

Outcomes for your business

• Well informed business owners and managers
• Good, pro-active decisions based on accurate and timely information.
• A culture of constant improvement
• A profitable business