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What is your activity gap?

A common phrase often used in business terms is ‘if you always do what you have always done, you will always get what you have always got’.

We offer support to help you make the change needed in your business, so that it delivers the results you want to meet your goals.

With our clients embracing their personalised Business Improvement Programme, we help them to plan for what they really want for themselves from their business and create a strategy that forms the basis of their activity for the future, albeit 5 years, a year or the next 90 days.

With our one page plan tool we help our clients consider three key elements of their strategy. Firstly, their reason why to establish the mission, vision, goals and objectives. Thereafter, to establish the targets that have to be achieved in order to deliver that desirable position and then the activities that need to be delivered without distraction to hit those targets.

Part of this work with our clients is perhaps best shown with the diagram above.

You start your business with enthusiasm, but ultimately no sales turnover. You have the plan and desire to develop the business and achieve £x turnover. Within your start up period, you experience the initial spurt of growth that your efforts deserve. Then you may have plateaued to a point last year that you are now seeing a little growth, but it is harder to achieve and the results less satisfying.  At this point, now, you still have the plan and desirable vision to achieve £x, however if you continue to do what you have always done, then the projected outcome is likely to fall short of this mark. The difference between where you ideally want to be and where you are projected to be is ‘Your Activity Gap’.

What is ‘Your Activity Gap’?

These are the activities that you really need to make happen and the likely changes you may need to implement that will support the step change and ultimately the change in your business direction.

Our Planning stage ensures that all stakeholders in the business are aligned to a clear and common purpose. We will ask the questions that often are difficult to ask yourself or a close business colleague. We will ultimately mentor your planning process to establish what has to be done, when, by who and help you create a financial forecast that shows the profit potential and impact on your cashflow. We also help you to forecast the ‘what if’ scenarios of the ‘Better’ and ‘Worst Case’, so you are able to make informed, calculated risks often associated to running your own successful business.

If you would like to talk more about your activity gap then please call us on 01865 379272.

 

We are often asked about the cost of engaging the support of our Business Improvement Programme, personalised to suit your requirements. We would emphasise that there is no cost, but an investment in your business and ultimately your future. This advisory support is not about how you can pay less tax, although we will also consider this with you, but how you can build a more successful business that makes more money and is more enjoyable to run with less effort.

To demonstrate the potential return on your investment, please see the table below and perhaps even replace the scenario assumptions with your own numbers.

Scenario: Current Turnover is £500,000 and the net profit margin achieved is 10%

Turnover Profit Add Profit
If you do the same this year 500,000 50,000 0
If you grow turnover by 10% and maintain margin 550,000 55,000 5,000
If you maintain turnover but Improve Margin to 12% 500,000 60,000 10,000
If you grow turnover by 10% and Improve Margin to 12% 550,000 66,000 16,000

However, it is rare a business actually stagnates and is often going forwards or backward. Therefore:
In this example, if you do nothing different and maintain your 10% margin with zero growth or loss of turnover, then you will make your £50,000.

If you maintain the margin, but add a turnover growth of 10%, then you will gain an additional £5,000 profit.

If you maintain your level of turnover, but improve your margin to 12%, then you will gain an additional £10,000.

Based on the marginal gains philosophy of increasing many factors by a small amount to see a greater cumulative gain. In this case, as well as a turnover growth of 10%, you improve your margin by a further 2% (total margin 12%) then you achieve much more.

Try adding your numbers into this simple table to see the potential gain from such an investment in your business.

Investing into YOUR Business Improvement Programme gives an opportunity to generate financial returns, in terms of increased profitability and cash, and non-financial in terms of the enjoyment and satisfaction that you get from your business.

Our Business Improvement Programme is fully personalised to your requirements based on the steps you want to implement and the amount of support you need from us. As a guideline, your year one investment is likely to be in the region of £7,000 to £12,000.

If you would like a personal quote and to discuss how we can help you develop your business with our unique 8 steps, then please call us on 01865 379272.

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