If you are a business owner and looking for a good business development system you might be wondering what to look for.

This article is aimed at helping you make that decision, by firstly explaining what we understand by ‘Business Development’.

So what is Business Development?

- It involves profit improvement or profit increase.

- It involves improving business processes in order to reduce costs.

- It involves looking at the systems within the business and then reviewing ways of improving those systems together with adding in more and better systems.

- It means looking at the involvement of the business owners and how to help make them less involved in the day-to-day running of the business and of how to make the business less dependent on the owners, thereby making the business more valuable.

- Essentially business development is about creating value from an already existing business both in terms of profits and in terms of shareholder value.

Now that we have defined business development what is a business development system?

Simply answered it is a system that would help a business owner look at all or some of the above areas and one that is designed to help focus on different aspects of the business.

Some of the process might involve using business performance management software, whilst others might include employing business consultants or specialists in this field.

One important aspect never to be overlooked is the involvement of the employees of the business, as they are the ones on the ‘front-line’ as it were and possibly more importantly, are the ones that will be operating the systems to be implemented.

Business Strengths, Weaknesses, Opportunities and Threats analysis or SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture.

A business can use a SWOT analysis for the business as a whole of an individual venture and by using a SWOT analysis helps a business to focus on that project in such a way that highlights both sides and not just the upside.

This technique was originally developed by Stanford University by taking data from Fortune 500 companies and accredited to Albert Humphrey.

The analysis is designed to identify both internal and external factors that affect your business or the venture and is an extremely powerful planning tool.

For a SWOT analysis template tool in PDF format for you to use for your business. A SWOT analysis can be used for setting up a business, buying a business, starting a new project, launching a new product or service and many more reasons. They are a relatively simple thing to complete and work by getting you to think carefully about all sides of the project, both favourable and unfavourable, at hand.

When you consider the analysis keep in mind the following:

Strengths: The attributes of the person or company that are helpful to achieving the objectives of the venture.
Weaknesses: The attributes of the person or company that are potentially harmful to achieving the objectives of the project.
Opportunities: Any external conditions that would be helpful to achieve the objectives of the venture.
Threats: All the identified external conditions which could be damaging to the objectives of the project.

Free sample SWOT analysis tool (pdf format)

There are many business performance management software products out there and each working in a different way, so depending upon what you are looking to do will depend upon which software product you buy.

If you are looking for business performance in terms of identifying your key performance indicators and your key profit drivers then Bowraven’s Increase Profit Software is the ideal product for your business.

As with having a business plan, having accurate and appropriate business intelligence is critical in the attainment of both the short- and long-term goals of a business.

Having a piece of software that helps to make you focus on data about customers, how much they spend, how many customers you gain each year and how many you lose. How often do your customers return to your business, for example is another crucial statistic to give an enterprise the ability to make the best decisions to ensure their present and future success – to make sure the profits are maximised.

Business performance management software that is designed to increase your businesses performance and one of the key steps down the business development process.

Small business software is an essential tool for any business and we have two examples of excellent software designed for good business management.

Business management software would include forecasting software and business software designed to improve profits together with having a good business plan, which does not necessarily have to be produced using software.

Forecasting software

Cash Forecaster is great easy to use small business software designed for cash flow and profit planning. If your small business needs a quick projection for the next 12 months then you could purchase the Basic Version.

However, if you are looking for some longer-term financial projections then other versions will forecast for three, five and seven years forward.

It is important to have an excellent tool to project those cash flow highs and lows that running a small business has.

Many small business owners think to use forecasting software only at a time when they are looking to raise finance or to borrow from a bank, but this is not the case. All small businesses should have a business plan with a detailed cash flow forecast attached.

Profit improvement software

Another element of running a successful business is to manage the profits and to work on ways to increase those profits. Understanding the business Key Performance Indicators and the 7 ways to grow the business is half of the journey to having a truly successful and profitable business.

Understanding how to increase business profits aligned to projecting profit and cash flows of your business will be like having a Satnav (GPS) to direct your journey to a chosen destination.

This might sound a little abstract, but if you understand the importance of using an efficient tool for your car journeys, i.e. a Satnav (GPS), so that you do not waste time getting lost on the way, save fuel and arrive on time, then you will understand how important it is also to have the rights small business management software too. By having the right small business software, your business will not get lost on the way, save money and arrive on time at your chosen profitability level!

Increase Profit Software Designed For Increasing Profits for Business and in turn Business Value.

Every business owner would like to ‘ Increase Profit‘ and I often get asked by small business owners ‘How do I grow my business?’ and ‘How do I increase business value?’

Normally increased profits go hand-in-hand with higher business value, as a more profitable business becomes much more desirable. However, before a company can begin increasing profits the owners need to identify how they are going to do it.

With this in mind Bowraven’s Profit Increase Software is designed to identify ways to bring in extra revenues, increase profit margins and to extract additional revenues from existing customers, instead of what most businesses do, which is to focus on getting new customers.

Understanding the ’7 Ways to Grow a Business’ and on knowing how to identify Key Performance Indicators (KPI’s) are the keys to business success. When you invest in Profit Increase Software the accompanying book explains the 7-ways to grow any business and will help you to understand Key Performance Indicators, which are measures commonly used to help an organisation define and evaluate how successful it is.

Business is about investing and getting a return on that investment. Any business that has invested in and used Increase Profit Software has had that investment returned in multiples of hundreds, but more likely by thousand’s of per cent. Increase Profit Software identifies the areas of profit improvement and targets the 7 Ways to Grow Your Business.

Once these have been identified you can focus on how to increase profits and on KPI Measurement and then on KPI performance. Increase Profit Software is designed to identify the areas of your business that are sensitive to adjustment and hence key to growing your business and its profitability. Increased profits combined with excellent cash flow will in turn increase cash in the bank.

Here at in-business.org.uk we would like to wish all of our readers a very Merry Christmas and a Happy and Prosperous New Year.

If you are looking for some ideas on New Year’s Resolutions then these might help…

1. If you have an idea for a new business and if till now you have been putting it off…make a resolution to commit to taking your business idea forward in 2010! Read about How to Start a Small Business.

2. If you are bad at doing your filing (Like me) then how about promising to keep up-to-date with your filing in 2010.

3. If you have been thinking about ‘Writting a Business Plan‘ and a cash flow forecast for your existing business and been putting this off…stop putting it off and get to it! Make 2010 the best year ever for your business…write a business plan and set your business in the right direction – Don’t fail to implement!

4. If you are too busy doing things in your business and doing what I consider ‘Working In’ your business…promise to start delegating in 2010 and start ‘Working On’ your business in 2010. Learn how to delegate task in your business!

5. If you are not sure about where your customers are coming from and you do not measure your advertising costs versus your new client inflows…consider s New Year’s resolution of starting to ‘Measure and Manage’ your business. Also consider starting a ‘Marketing Calendar’. Develop your business Key Performance Indicators or KPIs.

Whatever your New Year’s resolution for 2010 and whatever you do in your business

There are many ways of improving Cash Flow for a business and we have given you a few ideas to do just that.

To help you see how these ideas can help your business it would be worth while doing some cash flow projections. The Cash Forecaster can be used as a management tool to identify critical costs areas of the business and how these impact the future cash-health of the business.

For example – you might like to experiment with introducing Factoring or Invoice discounting to improve the flow of cash from your customers whilst you are in expansion mode – Just because a business is making a profit it might still fail if the profits are not turned into cash – Remember ‘Cash is King’ in business!

You may have heard of the term ‘Over Trading’ – Over trading is where a business is making good sales and turnover but that it is not able to keep up with the payments to suppliers simply because their customers are late in paying the company. The obvious way to correct this is to make sure that your payment terms to your suppliers are more generous than those given to your customers. Alternatively, the introduction of Factoring will help.

Having a Cash Flow Management tool to hand will help you to explore the effect these ideas will have on your business:

1. Increase sales and in particular those involving cash payment or payment by either standing order or direct debit.
2. Reduce your direct and indirect costs and overhead expenses.
3. Consider increasing your prices and especially to your slow payers – see Bowraven’s “Profit Increase Software“
4. Review the payment performances of customers and be more selective when granting credit – start using a credit report company to check the credit worthiness of potential customers.
5. Consider up-front deposits or multiple stage payments – approach a loan company to advance the money to you and offer credit terms to customers.
6. Reduce the amount of credit given to customers and change your payments terms – i.e. reduce the time allow for customers to pay.
7. Introduce factoring or invoice discounting to accelerate receipts from sales.
8. Make sure that your sales invoices are raised as soon as the work has been completed.
9. Offer early payment discounts and consider introducing late payment charges or fees.
10. Generate regular reports on receivable ratios and aging or your customer balances and use more pro-active collection techniques – involve your sales team and make sure that any commissions are only paid where customers pay the company.
11. Consider the 80/20 rule with regards to your customer list and product lines – make sure you know where your profits are coming from. You might well find that 80% of your profits are coming from 20% of your customers or 80% of your profits from 20% of your product lines – if either of these are true consider not dealing with the 80% of customers and cancel the 80% of non profitable product lines. Be careful when do this, as it might be that certain products are reliant on others, in which case they may be ‘Loss-Leaders’.
12. Take a look at how you pay your suppliers – ask for extended credit terms. Get new quotes from other suppliers and re-negotiate prices of supplies.
13. Try to reduce your stock levels (inventory levels) and improve control over work-in-progress – make sure that you are billing work in progress on a regular basis and keep write-offs under review.
14. Sell off or return obsolete/excess stock (inventory).
15. Defer or re-stage all capital expenditure.

Planning these changes and which ones work best for your business can be done using our tried and tested Cash Forecaster.

Post by Russell Bowyer

Small business success is all about taking the right action and following some simple steps to increase your business profits!

Small businesses are the backbone to most world economies and anyone that has run or is running a business will know that it is not always easy and when presented with additional challenges, such as a credit crunch, business owners need some help.

Often times people think that the only way to increase profits is to either increase prices or to get new clients, whereas this is just not the truth.

Another aspect of your business to consider is its “USP” or “Unique Selling Proposition” and it is not always to a good thing to have this as “your prices are cheaper” or put another way that you are offer the best prices compared to the competition. Reason being that should your competition match your low prices, then you have no where to go, other than to lower your prices still further!

It is therefore good to spend some time on what it is that makes you better than your competition. If you are not able to think why your business is better than the competition, you should spend some time doing so and thinking up ways to shine above everyone else in your market place.

Spend some time thinking about what you would say to a customer that is sat right in front of you that asks the question – “Why should I purchase from your company and what is it that makes you special?” or “Why should I purchase from you and not XYZ company down the road?”

Once you have identified your “USP” you can start to take additional positive steps to small business success by…

increase the number of customers your business has…

increase how much your customers spend…

increase the number of times they come back to buy from you…

thereby increase your profits!

This is just part of the story, as there are in total 7-ways to grow your business and to improve profits. Running any successful small business is about keeping ahead of the competition by continuing to do the things that they are not doing.

It is these small differences that can be enough to keep your competition at bay and you on top. Using the Increase Profit Software you will be able to focus attention on what makes a difference for your business and how you can then start to brain-storm ideas to increase your business profits and to add to your Unique Selling Proposition!

Small Business Success is about taking action today!

The net profit in a business tells an investor or business owner how much money the company makes for every £1 it generates in sales revenue – the higher the profit the better the business.

The net profit margin is calculated by dividing total net profit by total sales revenue, for example:

XYZ Company Profit and Loss Statement for the period ended 30 April 2009
	£	£
Total sales		340,000
Cost of sales
Opening stock	11,000
Purchases	120,000
Closing stock	(13,500)
	________
Cost of sales		117,500
		________
Gross profit		222,500
Overheads*		150,000
		________
Net profit		72,500
		======
Net profit margin		21.3%

In the above example XYZ Company has a total net profit of £72,500 and total sales revenue of £340,000 and using the formula for calculating net profit margin, this gives a net profit margin of 21.3%, calculated as follows:

Net profit
——— (Divided by) —- x 100
Sales revenue

Or in figures:

£72,500
———- (Divided by) —– X 100
£340,000

The above formula gives the net profit margin for XYZ Company as 21.3%

Net profit margins for businesses vary by industry and depending on how a business is run within each industry will produce differing net profit margins. The more efficient the business then the more likely the net profit will be higher in comparison to the sales revenue it generates.

There are a number of ways in which to improve profit margins in a business one of which is to use “Profit Increase Software“, which looks at the ways to grow a business and improve profits.

Of course there are two benefits from having higher profits, which are increased money in the pockets of the business owners and a more valuable business, should you decide to sell.

Key Performance Indicators (KPI) are financial and non-financial measures used to help a business define and evaluate how successful it is and are used to monitor how the organisation is doing.

Another term for KPIs is Key Success Indicators (KSI) and any business that uses KPIs is one that certainly has an advantage over businesses that don’t. What you measure you can manage and each business needs to choose which KPIs are key to the performance of the business and those performance indicators that will have a major impact on the business if they are improved upon.

So what exactly is a KPI – the best way to answer this is by way of an example:

Client Conversion KPI

A KPI that is key to any business is it’s conversion of enquiries into actual clients, so for example if you are currently getting say 30 enquiries per month and you convert 10 of those enquiries into clients, then your KPI is 10 divided by 30, which equals 33.33%.

By having this percentage you now have a target to beat, but more importantly, by acknowledging your conversion rate as being 33.33% you can take steps to look at why it is this low and take action to make improvements.

A first step might be to make contact with the 20 out of 30 enquirers that do not become clients and ask them why this is. By asking your potential clients you will find out what it is you can do to improve upon this KPI. By taking action you will get more clients from those that enquire about your products or services and improve your Client Conversion KPI.

Average Revenue per Client KPI

Another example and also one that is both relevant and key to all businesses is the Average Revenue per Client KPI. Let us assume that you presently have an annual turnover of £550,000 and on average you had say 2,500 clients in the same year. Your Average Client Sale is £550,000 divided by 2,500, which equals £220, which represents your Average Revenue Per Customer KPI.

As with the first example, once you know what the average spend of your clients is you are able to address ways in which you can increase their spend, thereby Increase Business Profits.

There are KPI’s that are non-revenue related, for example:

Employee Retention KPI

If a business has a high employee-turnover this will be very costly to the organisation. Therefore, if you can keep your employees for longer periods and thereby reduced employee-turnover you will drive down costs and save time, by avoiding unnecessary interview and training time involved in replacing every new employee.

To get your Employee Retention KPI you take the number of employees that you lost over a given period (lets say you lost 5 employees over a 12-month period) and divide this by your total employees over the same period (let’s say that this was 20) therefore, your KPI in this instance would be 25%.

Once you have your Employee Retention KPI you can take the necessary steps to change this and make improvements and one such step would be to carry out Employee Exit Interviews and ask them for reasons why they are leaving your organisation. By performing Employee Exit Interviews you will discover a lot about why your staff are leaving you and then take steps to reduce this KPI and save the company money in the process.

So to begin on the road of business success you need to start Developing key performance indicators.