CFO Services and Business Management...

Link strategy & actions to real top & bottom line growth...NOW!

CFOs are typically responsible for everything...including the kitchen sink and that's exactly what we deliver.

We solve strategic and financial problems. Profit problems come in all shapes and sizes.

Here are the 7 top profit warning signs that are commonly disregarded:

• We're getting "beat up" on pricing
• Financial information isn’t helpful in making critical decisions
• Data is "locked" into the new systems we just implemented
• No one has time to work on important but not critical projects
• We have more customer service and IT people than sales staff
• Which products/services or customers are the most or least profitable?
• We respond to competitors actions not pre-emempt them.

Here's how our CFO and Business Manager services increase your profits:

• Add-on management expertise to get "stuff" done
• Prevent a turnaround
• Execute a turnaround plan
• Competitive and industry analysis
• Customer and product/service profitability
• Profit risk assessment and management
• Pricing to increase revenue and profits

Turnaround Plan Execution

The most successful turnarounds are the ones that avoid situations with limited options. We assist companies that still have options available to maximize their current opportunities and prevent a bad situation from getting worse.

The key to turnaround prevention is cash. Even if a company is losing money, if they have adequate cash reserves, attractive options remain. Getting the cash situation stabilized quickly is key.

These solutions usually involve:

Negotiating with creditors

A creditable business plan is imperative when re-negotiating with creditors. "Trust me" doesn't work anymore.

Most creditors will work with clients that are honest and upfront about the current situation. They are even more willing to work out a new financing plan if the client has a well-prepared, realistic plan to prevent further business deterioration. After all, it's in everyone's best interest for the business to meet its financial obligations and to grow.

We will also introduce you to credible funding sources.

Rebuilding

Companies will go down the turnaround path numerous times until solving the customer's critical problem becomes their focus.

Sometimes turnaround prevention requires a change in the senior leadership team and a re-alignment of the company's processes and infrastructure. To expect avoiding any disruption during this time of tremendous change is unrealistic.

Drastic change is distracting and devastating to a company approaching a turnaround situation where every customer and dollar of revenue is critical.

Our CFO and business management services help minimize the inevitable disruption and damage. We help you be realistic, not over promise and regain the trust and confidence of employees, investors, creditors, suppliers and customers.

Investing in future growth and profits

Don't expect people that are fighting the daily fires to be able to also keep their eye on the next growth opportunity

Even as a company is fighting to stay alive, it's critical to keep an eye on the future. This can seem almost impossible to do when you and other resources are stretched to the max. This is one way The Adare Groups helps clients move well past a turnaround situation.

It's very easy to avoid investing in the future when executives are caught up in the heat of daily problems and crisis's. We make sure that companies don't miss those hidden profit opportunities while they are busy solving today's urgent problem.

We assist you by keeping an external focus, especially by keeping an eye on new customer issues and industry trends. This service greatly reduces the time you need to allocate to these tasks while you are focused on day-to-day issues. As the business turns around, you have options ready to act on so you won't be starting from square one or playing catch up to a competitor.

Competitive and Industry Analysis

When customers can't discern a noticeable difference between your products and your competitor's, profits plummet. Solving this differentiation issue, eliminates price wars, reduces costs, streamlines processes and increases profits. Our competitive analysis:

• Identify traditional and non-traditional competitors and their current and future impact on your profits
• Determine if increasing market share will increase profits
• Differentiate products and services from the competition

Here's an example of how this works: The growth in fast-food restaurant market has stalled. Companies with revenue projections greater than the industry have limited options:

• Steal share from competitors…usually from price discounts.
• Introduce an innovation to the market place: Offering a fast-food breakfast increased the overall size of the quick service market.
• Grow geographically…Tap into markets outside typical geographic boundaries.

Customer and Product Profitability

If you company doesn't know where its revenue and profits are coming from,
resources are wasted as you randomly search for profitable customers.

If your company discontinued all of your unprofitable products or raised prices 100%, even if your volume decreased by half, your profits would be the same and you'd have 50% more time for innovation...or golf!

Segmenting product and customer data provides a vivid picture of whom the profit contributors are and who's not.

Once the profitable products and customers are identified, strategies are developed and implemented to divest of those that are a profit and cash drain--freeing up resources to go after customers willing to pay a premium for your solutions. This increases the number of your customers who are profit contributors and increases your bottom line.

A common method of segmenting customers and products into 3 categories:

• Harvest: Unprofitable and "fire" customer

• Grow: Profitable and increase sales from these customers

• Milk: Order taking service only

• A company we worked with was very diligent in defining the criteria for each of these categories
• The strategies for several customers, however, didn't match the category definition
• Very unprofitable customers were placed in the Grow category
• Resources weren't allocated according to the strategy and profits decreased versus increased

"Sacred cow" products and services can be the largest profit drain a company will ever experience.

Profit Risk Assessment and Management

What could destroy your business overnight?
What are your plans to predict and combat these risks?

Companies already know the external factors that can negatively impact profits almost overnight. But some events will always be a surprise. That's part of today's business reality.

However, the majority of these external events can be forecasted and contingency plans put into place before a catastrophe occurs. This requires a constant search for potential risks. If high potential risks are ignored, companies are destroyed.

Common risk areas:

• Non-traditional competitors

• Inaccurate financial reporting leading to uninformed business decisions

• Operational processes resulting in safety and environmental problems including geo-political risk.

The risks to your business are constantly changing. The key to survival is maintaining a constant vigil and being prepared for the unexpected. Events far less dramatic than Mad Cow, E. Coli and SARS have severely hurt the profits of many companies.

Example:
Technology changes allowed electronic authorization and printing of credit card receipts from POS terminals. This innovation destroyed many companies that printed paper credit card slips for the old-fashioned imprinters.

Pricing to Increase Revenues and Profits

Companies usually justify price increases due to their own cost increases.
Result: Customers get the same product for a higher price. There is no additional value offered in exchange for the price hike.

Complicated pricing theories are abundant. What isn't obvious is how to price your products and services that maximizes revenue and profits. Should you use cost-plus, match your competitor's price or use some value pricing formula? But it doesn't have to be that hard.

We believe the optimum price for most products and services is just below the cost of your customer not fixing their critical problem. Obviously, the more critical the problem your customer has, the higher the cost of doing nothing.

The trick is estimating how much the problem is costing your customer and knowing how unique your solution is. This is much easier if your company has an ongoing competitive and industry analysis process. But it's never perfect.

Pricing requires a combination of judgment and facts. Knowing what external forces affect your market now and in the future is critical. Realizing that pricing power results from offering a solution to a previously unsolved critical customer problem maximizes profits. Customers are no longer willing to accept a one-sided value proposition.

Example:
This situation actually happened to The Adare Group. A vendor sent out a price increase letter for 40% because they were forced to move office locations. But the service would remain the same. We weren't going to receive any additional benefit from their new office space and we refused the price increase. Call us at 630-399-7006 to find out what happened next.

To hire The Adare Group or Deborah House right now, click here.

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For more information:
For more information on profitability consulting from The Adare Group, contact us at 630-399-7006, or info@TheAdareGroup.com to talk to one of our consultants.