Woodhouse Consulting and Coaching Services

05/04/2022

HAVE A THINK TUESDAY
Increasing Profits by Removing Wastes #1

With tougher economic times ahead business should look to reduce waste in order to decrease the COGS and increase profits.

The first waste we aim to remove is defects. Any labour, time or materials expended redoing something comes straight off the bottom line and potentially burns your brand.

To give an example of this, I recently made a warranty claim on a fifteen month old electric product (3yr warranty). A nominated repairer come and inspected the product and found the item unrepairable and required an in store refund. Plenty of waste so far for the manufacturer, the cost of repairer, the cost of processing the claim, several hundred dollars worth.

Included in the warranty claim was the cost of item pickup and disposal by the store making the instore refund. This store transaction died a death of a thousand cuts. My initial call was taken, the refund controller who required a box to pickup the item, being fifteen month's old we no longer had the packaging, so they needed to find a box and ship it to my home to package the item in for return. Many wastes right here, the item has already been determined beyond repair, why does it need transport protection all all? Why waste warehouse time and shipping costs and admin costs organising and paying for transport of an empty box.

The box arrived and I packed the item, naturally the item did not fit properly (in correct box). After several phone calls and two failed pickup attempt by the courier company the item was returned to the store.

The next day I get a call the item has been processed and I just need to drop in to pick up the refund. Two days later I arrived, the staff had no idea about the in store refund as it had been organised by "John" (not real name). three separate staff members involved in the fifteen minute investigation, before one employee discovers the paperwork from the manufacturer authorising the refund. Well where to start, an hours worth of labour chasing lost information to refund an authorised in-store refund, at least another hours labour in chasing couriers ect

An needless to say one very annoyed customer have to repeat the refund store and provide the same notification, con notes etc five times.

In my early work life we would have called a taxi for a pickup / drop off to loading dock immediately, no packaging. It was a 3km drive so Swan taxi fare estimator - $14, probably cheaper with uber. Resolved on the same day.

Lesson here poor processes and poor systems and the use of unempowered employees made a $100 refund process cost $700 (my estimate), annoyed the customer and the loss of the opportunity to generate revenue.

Who much is your business losing through poor quality and business processes. If you would like to know more ring Michael on 0417 178 493 or discover how to increase profits by eliminating waste in your business.

29/03/2022

April 2, 2022 is World Autism Day. Autism affects thousands of Australians and their families.
I am challenging everyone to give some of their time, skill or money to one of the many Autism charities.

It time to give a back.

21/03/2022

HAVE A THINK TUESDAY - How Fast Can you Grow

Since before Cleopatra ran a side hustle at the Alexandra markets business folk have known that cashflow is one of the biggest problems business owners have to face.
Less people understand that profitable business can grow too fast, and can run out of cash. A key challenge for owners of any growing concern, then, is to balance between using cash and generating it. Fail to strike that balance, and even a thriving company can soon find itself out of business—a victim of its own success.
The real question to ask and know the answer to is
HOW FAST CAN MY BUSINESS GROW?

Read More: https://wccs.com.au/have-a-think-tuesday-how-fast-can-you-grow/

07/03/2022

HAVE A THINK TUESDAY - People and Culture

All businesses are fundamentally only three things;

Business Processes
Business work flows, procedure, rules, policy etc. All of which are developed, selected or used by the companies employees.

Tools / Plant
The equipment and tools, our IP, forklifts, computer systems, business plans, KPI's etc our employees use to deliver our promises made to customers.

Our People (Tribe) / Stakeholders
Employees, leaders, suppliers, customers and our culture, the behaviour, choices and actions of our people.

The bottom line here is, it is your tribe that generate your businesses wealth. Yet they are no where to be found in the accounts. There is no general ledger in the balance sheet for customers, relationships, knowledge, team dynamics, capability, problem solving capacity etc. The closest we get is our IP as an asset. People assets intangible, but they are your competitive advantage, your profit margin, your business.

So the question this week is; why do SME's think people are about;
Legal compliance - payroll, work contracts
Cost management and are constantly looking to reduce hourly rates
They acknowledge they are important but then avoid investment in training and development etc
Look to culture to control their staff to be "like minded" robots
Constantly annoyed because there do not show them loyalty

Yet , many of the same companies maintain, repair, modify and upgrade their equipment and tools to improve its ROI, reliability and performance.

Is it because they see the relationship between their "tribe", their wealth generators, their employees, suppliers and customers as a transaction style arrangement. One where money is exchanged for "goods or knowledge", a pseudo sale.
Have they overlooked to opportunity to optimise the value in the relationship? Have they set the minimum requirements and lost the discretionary value? How much is this discretionary value worth?
The answer is not in the P&L nor the balance sheet, so you account won't know. The answer is not in an algorithm or a CRM, but my experience tells me it can be 40%

I would love to know your thoughts, so feel free to comment.

If you would like to discuss I am always happy to discuss over a cup of tea.

03/03/2022

BUSINESS TIP THURSDAY - Intergenerational Wealth

70% of family businesses fail succession to the next generation.

When business owners hear succession they think exit (sell or list). However, exit is only one option, retaining the business or cluster of businesses in family ownership is another option. In choosing this option the family builds a "goose" that continues to lay golden eggs for generations to come.

So why do 70% fail to do so?

Despite the majority of businesses being owned by families our professional experts are trained and hence have a mindset of growing a business to exiting (sale) the business or listing the company on the ASX.

This succession mindset focusses on legal issues s(Trusts, shareholder agreements, estate planning etc) and taxation (minimizing capital gains, stamp duties etc). All valid and reasonable.

But 70% fail to transfer within family ownership because what most lawyers and accountants offer is not enough. 75 years of research demonstrate the greatest risk and cause of 70% failure is management of family members and family issues.

Yes, just like all business the hardest challenge is the human issues. So naturally, the success of a mutigenerational family business means excellent management of the family, and the family relationships.

My biggest tip for all family businesses who want to keep ownership in the family for the next generation is: find an Accredited Family Business Advisor, someone who understands the nuances in family business relationships and start an ongoing improvement system of family governance. A system to control the interface between the family and the "goose" that will lay the golden eggs for the NextGen.

If you would like to further explore developing intergeneration wealth system for your family please feel free to PM me or call on 0417 178 493.

28/02/2022

Have a Think Tuesday

Are we at a pivot point in the economic environment?

We have experienced ten years of record low interest rates, steady growth in the economy, slow growth in wages and low inflation. Experts have tipped all this to change over the next two years. Over the same period many businesses have become heavily sales and marketing focused, ie focused on revenue side of the profit equation.

The inevitable result of increases in interests rates, wages and inflation is higher operational costs for businesses and less discretionary spend from consumers and tighter contractual arrangements in the B2B space.

The forecasted economic changes will invariably challenge profitability, to which sales volume alone will not be the solution. Simple short term procurement price renegotiating is unlikely to be enough to absorb increase costs and sustainable deliver profit.

So are we now primed to see businesses refocus on operational excellence (people, processes and plant) to remain competitive?
Is it time to redesign the way we do things?

We would love to know yours thoughts on this topic, so leave a comment and enter the conversation.

24/02/2022

BUSINESS TIP THURSDAY - COVID TIP

This post is copied from a LinkedIn post and must be credited to fellow Accredited Family Business Advisor Paul O'Farrell, Managing Director Quadrant Advisory. It has some great reporting tips for the Covid19 period.

Here in WA, we are gearing up for community spread of the Omnicron variant which will hopefully be not as severe as other places given our current level of vaccination.

In discussions with clients, banks and advisors over the past couple of weeks, I have suggested that any "exceptional costs" associated with dealing to or preparing for COVID (e.g. purchase of RATs, additional stock, PPE, etc.) should either be expensed to a separate cost line or kept track of via other means. In my view, it is far better to do this in real time rather than having to do a look back exercise later in 2022 or early 2023.

Identifying exceptional COVID-19 related expenditure could be used in the following ways:
- Financial reporting to banks, funders and other key stakeholders to demonstrate what the real, underlying profitability of the business is
- A normalisation profit add-back in future years if and when the business is sold
- Having the information quickly to hand if Federal or State Governments provide further taxation relief or specific financial reimbursement of costs (unlikely but you never know!)
- Communicating with employees to demonstrate the tangible spend that you are incurring to assist with their health and safety

21/02/2022

Have a Think Tuesday 👨‍💼

Over the last ten years there has been a very strong focus on the art of leadership and the relationship between business success and leadership, all while maligning the art of management.
In recent times some consultants including Henry Mintzberg are starting to challenge this view. I will declare my position in this debate, I agree with Mintzberg. Great leadership is unarguably required, but the actions and ex*****on rely on the maligned art of skilled management to turn the leader’s vision in to commercial outcomes. Over the last two years we have seen many businesses need to pivot to survive, without excellent management skills the pivot would have remain a goal or objective.
Is leadership a declining fad or is management bound to remain in purgatory for ever?
Share your thoughts on this topic.

18/02/2022

Dropped into the Prague Bakery this afternoon for some sour dough and a few apple and blueberry danishes.

Great little family run business 👍

03/02/2022

Great to see Twiggy taking up the challenge. Misleading conduct in business is escalating in the social media era. Really unacceptable for online businesses to continually hold th we stance they are just a platform and are not acceptable for content.

For me this is an issue of product stewardship. Good luck Twiggy, interested to see how this plays out. It in the criminal courts, so presumably no spoils if he wins.

Billionaire mining magnate Andrew 'Twiggy' Forrest launches court action against social media giant Facebook, alleging the company has breached Australia's money laundering laws by failing to prevent false advertisements using his image.

03/02/2022

In my view VRFB can deliver great environment, social and competitive advantages to business owners.
A great low cost option for salary packaging, and ESG initiatives. Why more companies ard not in this space, is beyond me.

A hardener of the steels that have been helping to make Ford's tough for more than a century and an element with unique properties that make it the key ingredient in enormous batteries to store intermittent wind- and solar-generated electricity, vanadium is a critical metal with many valences. It is...