EPISODE A5.005 Optimize All Elements of the Business for Profitability

Introduction
Good afternoon

I just want to introduce myself.
My name is Ellen McIlhenny and the Stage V business is something near and dear to my heart.  Before starting my own Fractional CFO firm I spent 18 years as the CFO for a privately held business and after a period of very fast revenue growth we found ourselves in the Stage V lane and had to get to work to maximize our profitability.

Once you hit Stage V it is important to move fast because in most cases you’ve been leaving dollars on the table and it’s time to tighten up.  Up to this point it has all been about revenue growth.  Now we need to look at profits.

During this pandemic moving fast in this phase is more important than ever. We have all felt the impact and things can change quickly.  Cash management is key.
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Show Objectives
As Stage V owners we really have two paths, will we sell or reinvent. Last week Bill talked about providing feedback to the different areas of the business on how to improve processes.  This week we will talk about applying this and optimizing all areas.
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Key Issues - ​Owner/Manager Perspective:

1. Quality
2. Processes
3. Efficient delivery.
4. People
5. Technology.

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What You Need to Know

1. What quality issues may have been identified during the feedback phase
2. What process improvements can we implement immediately
3. How can we deliver our product/service to the customer as quickly as possible.
4. Did we identify changes in people and technology to make us more efficient.  ​

What You Need to Do​

1. Document processes and constantly revisit
2. Try to automate as much as possible
3. Make personnel changes.  Take care with hiring processes as bad hires are very expensive to your company.
4. Start with quick fixes
5. Start with less expensive fixes
6. Calculate profitability of your changes
7. Know your numbers – Financial planning and Cash Flow management

Shows

• Previous: EPISODE A5.004 PROVIDE PERFORMANCE FEEDBACK TO OPERATIONS, SALES, AND HUMAN RESOURCES TO UPGRADE ALL PROCESSES
• Next: Episode A5.006 Conduct business valuation for sale

Written by Ellen McIlhenny

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