In this issue ....
Some 30 years into its evolution, the Ci business is still missing a critical part – a business system. Despite extensive experimentation, numerous software sorties, and millions of monthly at-bats, the existence of a business system that takes a company from client engagement to lifetime service continues to elude the industry at large, almost in a unicorn fashion.
We have no winged rodent to blame for this. Instead, we would point to fear of antidote: too often perceived as accounting medicine and rejected by the patients (yuck, doesn’t taste that great).
Meanwhile, each company fights its day-to-day battle only to find inefficiencies persist, more chaos looms and results seem ok but not always stellar.
The prescription is clear: it’s not just accounting, there needs to be a business system that covers the full process of the business. We’ve identified these 16 areas (Click here for more details). A brief survey of 12 questions can determine if you need any part of this solution. Answer yes or no to each…
1. Do you have a strategic chart of accounts (i.e., one that gives you the numbers you need to effectively manage & improve outcomes)?
2. Are you on a revenue-as-delivered model?
3. Are client deposits ≥ at least 2 months of revenue?
4. Do you have an annual financial plan and budget?
5. Are your labor margins approaching / exceeding 60%?
6. Is your AR ≤ 1 month of revenue?
7. Is your Inventory ≤ 45 days of revenue?
8. Do you get a weekly flash on key business outcomes?
9. Do you have regular production, sales, and ops meetings?
10. Can you forecast the next month’s revenue accurately?
11. Do you have a strategic org chart and position by position plan for growth?
12. Are you able to keep 3 months of payroll in free cash (not including client deposits) in the business consistently?
If you answered NO to more than 3 of these questions you could benefit from the VITAL Business System.
One could wonder why industry organizations such as CEDIA and the buying groups have not helped dealers develop this solution. Others may dispute the need for it or even see it as interruptive to the status quo.
One thing is certain. A system to help achieve all the above exists. It can be learned and implemented by any Ci company seeking greater efficiencies & profits. We believe the process begins with a self-analysis of where your pain is.
We are looking for the next 12 companies who want to go down the path to implementing the full scope of the system – and discover the wealth opportunity beyond. If you have interest, please reach out to us.