Check these pulse points for a healthy business
Clients are demanding! And so they should be, they’re paying the bills. All the agency focus is directed at ensuring clients have the best strategic advice, creativity and service. It is an evermore, competitive world and it takes immense skill and judgment to keep clients on board.
With all this energy going into client-land it’s not surprising that the wellbeing of your company sometimes slips down the priority list. It is not intentional; it’s just that there is only so much headspace.
So here are ten pulse points for your design business – a few minutes read of thought stimulation on the health of your company.
The sooner you can identify irregularities within the pulse points, the sooner you can attend to them. The secret is to monitor them regularly and identify them early, before they turn into problems or in extreme cases, threats.
When forecasting, companies predict their level of turnover, as well as the level of costs needed to service that turnover. There are acceptable ratios that deliver the correct level of profit. If these ratios get out of kilter then there could be an issue with the cost of production or with pricing. How steady are your ratios?
Sadly, sometimes we get the costing of projects or the invoicing process wrong. Some clients ask the company to reissue invoices. Every credit note tells a story. We are in business to make money, not give it back. Credit notes should be a rarity and easily explained. When did you last issue a credit note?
Even if a company is trading profitably, a strong company can go from healthy cash flow to stretched cash flow within a matter of months. Reduced trading, debtors changing their payment terms, clients hording cash due to their year-end or M&A activity, or maybe an impending bankruptcy. Sometimes clients are slow in issuing purchase orders. All these anomalies put pressure on cash. Cash management is an art as well as a science. How strong does your three to six month cash projection look?
Some clients have a life expectancy, whilst others can remain with the company for generations. Retaining clients is a huge priority; you should constantly be building even stronger relationships and maintaining an even more impressive reputation within the client company. These are the company assets and how we manage them reflects on the security of our business. Who owns the client relationship? Is everyone clear? Are we expecting more revenue this year from our client or is their billing in decline? Do we know why? When did we last have a client review asking important questions of ourselves? Do we have the right team working on the account? Are we valued at senior level by the client? Could we be offering more services? What’s going on in the client’s world, including their competitor activity? Overall, are you really on top of Client Servicing?
Are people leaving the company because they are running towards something better, or are they running away from you? There will always be a level of staff turnover, however there should be mechanisms in place to develop, support and grow talent. Why would talent move if the company is constantly training and growing them? They are special. Do they feel special?
Every company needs strong relationships with their outside advisers. Accountants, Solicitors, Foreign Exchange specialists, Human Resource, Bank Managers, Non Executive Directors. These all form the companies support structure. To whom do you turn if you have serious concerns?
How does the company feel? Open, charged, energetic, supportive, vibrant, successful, motivated, helpful, happy? If not, why not? Sometimes just one individual can affect the atmosphere, or one over demanding unprofitable client. Are you running your company or is it running you?
A strong pipeline of potential clients is the backbone of the company; it gives us the choice of clients we want to work for. It protects us from feeling trapped in the wrong relationships. It allows us the opportunity to work in different sectors. A healthy company has ongoing conversations with many prospective clients. They begin as the result of activity – constant activity. From activity comes opportunities, opportunities lead to briefs and from briefs, hopefully, comes new business. New business should be constant, enjoyable and well supported. If we are proud of our work it should be a joy telling everyone about it! Are you proud and are you talking about it?
Pitching can be expensive, regardless of whether creative work is involved or not. Researching the client, building presentations, time out of the office, all have a cost associated with them. Do we have a pitch acceptance process? What would stop us from pitching? Do we form pitch teams? How sophisticated are your pitch processes?
Winning a pitch reaffirms our relevance to our market. People are buying what we are selling. However, there is much to learn from our failures. Is there analysis or simply depression? Does the company pitch well? Does it enjoy the process? Does the firm pitch too little or indeed too much? Stress, crazy deadlines, pressure can stifle the creative magic. Is there a healthy balance between projects and pitches? When was the last time the company won?
Generally, at some point the health issues within the agency show up in the numbers. Reduced revenue, losses, lower cash levels. Unattended, these problems can lead to redundancies, and in extreme cases closure.
We are by nature problem solvers, it’s what we do for our clients. Therefore the secret for our companies’ health is our ability to recognise problems. These problems can be cheeky fellows hiding away in an agency, but by checking your business pulse points monthly you can identify them and set about curing them. The cure can come in many forms, but should you find yourself out your depth, the DBA has a raft of qualified experts eager to help.