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FEATURE Cornerstone FD


Get creative about turning things around


A company turnaround doesn’t necessarily just need to happen if it’s in trouble. It could be that the business has been stagnant for many years or simply that the management team decide that they want to futureproof or prepare for growth. T e issues at hand decide the order that the following must be


reviewed, or they can be done in tandem, but here are the basic steps to a successful company turnaround:


Sales Most businesses are focussing their eff orts into the wrong places, be it services, clients, products or whatever. Generally, to quote a fabulous client of mine, eff orts are concentrated in the 80% of clients who give you 20% of the benefi t. T e key to a successful business model is to fl ip it so that you’re focussing on the clients that make up 80% of the benefi t. T ere is no point to putting all your eff orts into the sales that don’t give you the adequate reward. Likewise, many businesses spread themselves too thinly by


off ering too many products and services because they think a splatter gun approach will give them more money. However, the opposite is


Annie Thompson Cornerstone FD


often true. My honest belief is that we have grown as much as we have because we don’t try to be all things to all people. Yes, we can do year end and tax, but honestly, you’re better off going to a dedicated financial or tax accountant for that and we are more than happy to tell you that. We specialise in the strategic side of accounting that enables us to work closely with owners to build better businesses, and we’re good at it, and we continue to get better at it. Specialising can often draw more revenue than the splatter gun approach.


Profit What’s the point in selling if you’re not making any money out of it? Gross profi t is your sales, minus the costs that relate directly to those sales (products that you buy to sell, staff that service customers etc). T e sales minus direct costs number needs to be higher than the overheads (see next point), otherwise you won’t have a business for long. Review the costs that relate to each of the things you sell. Are they more than you’re selling for? Are there things you’re selling that are less profi table than others? If so, now is the time to either review your sales prices and/or costs, or just get rid of the less profi table bits altogether, giving you time and resource to concentrate on the things that give you the most benefi t.


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ALL THINGS BUSINESS


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