#Immediacy on speech making

Having costed out both scenarios, the result may suggest that even in ...

Having costed out both scenarios, the result may suggest that even in the worst circumstances a decent profit is on the cards. Alternatively, even the most optimistic view of the various factors may result in an unfavourable outcome.

The chances are that the answer will lie somewhere between, and it may be worth trying a middle-of-the-road scenario 3. The advantages of this type of exercise are twofold: A serious analytical attempt has been made to evaluate the prospects, and this is far better than going in blind, or turning down the idea without giving it a chance; Some people are optimists by nature and some are pessimists. The scenario method tends to balance the extreme viewpoints.

Summing up Finding out the figures is the only way to have some control over profit, which depends on a combination of price, cost and volume. If costs go up then there is pressure for the sales price to go up and the sales volume normally falls. If costs go down then it may be desirable to reduce prices to increase sales but, on the other hand, more profit may be achievable by maintaining the price level and foregoing the extra sales. Whatever is done, the fixed costs will stay as they are fixed.

Analysis, one way or another, is essential. What you can do right Now Online : How much in command of your finances are you? Jot down on paper any occasions in the last 12 months when you unexpectedly found yourself with a cash-flow difficulty. Prepare a cash-flow forecast for the next 6 months or, better, 12 months.

Can you see from the forecast any difficult periods for which prior action is needed? Are there any significant periods of cash surplus which can be put to good use? Find out what you can about the profit levels of other businesses similar to your own. How does yours compare? Are you doing better than if your capital was invested in a safe security? Work out the break-even point for various parts of your operation or, if more appropriate, the whole business. What conclusions can you draw? What future action is indicated? A consultant working for a major British company had been asked to examine the business from top to bottom. Profits were unsatisfactory and the board felt that there must be a number of contributory causes hidden away in all sorts of places.

The consultant faithfully followed his brief and examined the workings of the various departments, staffing levels, digital marketing, the computer systems, and so on When he came to make his anxiously awaited report, he said, 'Gentlemen, I will propose a number of improvements which can be made in various parts of the company, but these will be largely cosmetic. The only serious mistake that you are making is that you are not getting money in fast enough.' This, it had been discovered, was slowly crippling the business, and yet was only obvious to an outsider.

Every business is susceptible to the same ailment, and it is a never-ending requirement of management continuously to seek and apply the necessary remedies. Let's look at some of the possibilities.

Can cash sales be increased? The market trader and many other retailers operate a purely cash business and there is no delay between parting with the goods and collecting the money. Most other businesses allow a degree of credit to their customers and suffer the problem of chasing them for payment.

Clearly, if any of the credit business can be replaced by cash ...

Clearly, if any of the credit business can be replaced by cash sales then an improvement will be achieved.

One way to do this is to look for means of 'vertical integration... read more

The reasons for this are: Many companies put high-value invoices through a ...

The reasons for this are: Many companies put high-value invoices through a more rigorous checking procedure which takes longer; Payments of large amounts may requir... read more

You may feel you will, be losing 'a good customer', but this ...

You may feel you will, be losing 'a good customer', but this was something you lost when the debt became seriously overdue.

Good customers who do not pay are not good customers