Zellers Consulting Group

Under Our Control...


J u n e 2 0 09

Build More

In these challenging economic times, every business closure is somehow linked to challenging economic conditions. However, according to statistics from the Association of Insolvency and Restructuring Advisors (AIRA), the majority of business failures are caused by internallygenerated problems within the control of management - not by bad luck and external events like a “bad economy.” (See chart below):

in you Business!
The Zellers Consulting Group provides consulting and manage me nt services to a growing list of small business clients. We offer our clients customized solutions linking business information with technology, strategy and execution. Simply put, we make our clients:

  

More Efficient More Competitive More Profitable

...and we

Guarantee our work!

As the business failure statistics indicate, failure to deal effectively with internal problems – whether triggered by external events or self-generated - was the dominant cause of business failures. The data is clear: 67% of the time, management had opportunities to change direction and potentially avoid the resulting business failure. According to the AIRA data, only 8% of business failures were caused by factors completely outside management’s control. Another 24% of business failures developed from some combination of external and internal factors that directly impacted the business (plus 1% attributed to “Sheer Bad Luck”).

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Zellers Consulting Group


J u n e 2 0 09

Management focus
Our Expertise
Strategic Planning Productivity Improvement Management by Objective Sales Team Management Business Development Gross Margin Improvement Process Re-Engineering Leadership Coaching Company Branding Product Marketing Management Training & Development Lead Generation Program Creation Inventory Management & Re-Alignment Performance-Based Compensation Plans

Under Our Control… (continued)
Time is Money and Time is Critical. The sooner management acts to deal with threats to the business – to make improvements in efficiencies and competitiveness - the less likely it becomes that business failure will result. The most dangerous thing is…Doing Nothing! There are always options to improve efficiency and competitiveness. If you haven’t already taken steps to improve your business, now is the time for direct action to improve your levels of efficiency and your ability to compete. Where is your business today? What direction is it heading? Are you still on plan - with positive earnings and positive cash flow? Or, are your performance indicators trending down? How long have they been trending down?

Each stage of decline shown above implies a reduction in available cash and as we know:

Coming in future issues:
Where’s the Cash? Fundamentals of Inventory Management Direct Mail Marketing Basics
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Businesses fail when they run out of cash.
Sliding sales, rising costs, eroding margins, tight cash, increased levels of inventory, receivables and debt, are all indications of impending problems. A careful study of the Balance Sheet and Income Statement will help identify warning signs of the underlying problems that must be addressed to ensure the survival of the business. However, many questions cannot be answered by review of the company’s Balance Sheet or Income Statement. The next critical question is: Why are we getting the results we are seeing?

Zellers Consulting Group


J u n e 2 0 09

Management focus
From the desk of Ted Zellers
“To truly become a high performing company with greater profitability, you must plan for it, evaluate f i n an c i a l p e r f o r m a n ce and take action to address problems as they arise. To do this, you must have accurate and timely financial i n f o r m a t i o n, which you understand and use to measure the p e rf ormance of y our business.”

Under Our Control… (continued)
Changes in market share, product obsolescence and other external threats, declines in staff productivity and accountability, improper or ineffective company procedures and poor internal communication will not appear anywhere on the Balance Sheet or Income Statement. Usually, the true causes of business challenges for a company originate in these areas. Often, this is the best time to bring in an outside advisor – a seasoned consultant with a fresh viewpoint - experienced in analyzing business problems and helping implement sales, marketing and operational improvements that increase sales, lower costs and improve efficiency within the organization. An economic downturn is an excellent opportunity to address the structural and operational problems that cause the majority of business failures. When business is booming, we accept all kinds of inefficiency - because we can afford to! During a slowdown, management attention must be focused back on the basics - because we can no longer afford “business as usual.” The Good News: With aggressive action to adapt all aspects of your business to the realities of a more competitive marketplace – operational costs will decline and the impacts of improvements in efficiency and competitiveness will be magnified as the economy begins to recover. Yes, these are challenging times. But will you simply endure it – slashing staff and capabilities – or take action to attack the cost areas of your business that no longer make sense? The real question should be: What are you doing to make your business more efficient and more competitive? The Business Failure statistics tell us we can do a great deal to limit your exposure to business failure. From process improvements to slaying the “Sacred Cows”, a consultant can help you manage the unique opportunities that an economic downturn can trigger and put them to work for you in a cost-effective way. The Key Questions: Where is your business today? What direction is it heading? Why are we getting the results we are seeing? What are you doing to make your business more efficient and more competitive? For those of us in the business of helping other businesses survive and prosper, the greatest challenge may be initiating this discussion with our clients. At the Zellers Consulting Group, we believe making clients more efficient and competitive is our primary goal. We can assist virtually any client with a careful and objective evaluation of their direction and performance – and if warranted – provide them with the expertise to implement marketing, sales and operational improvements that will make their business more efficient and more competitive. What we must not do, is to let the Key Questions go un-asked. As the Business Failure chart tells us, at least 67% of the time, we could have helped our clients solve the problems that will – eventually – make some of our businesses (and clients) go away. Let’s make sure that our businesses (and our clients) stay strong and healthy.

Questions or comments? Email us at: tzellers@zellersconsultinggroup.com or call


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