herradura, costa rica welcomes you to. welcome manage by numbers

Herradura, Costa Rica

W E L C O M E S Y O U T O

Welcome

Manage by numbers

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seLearn how to better use numbers and KPI’s to manage your business and achieve better business results.

Objective of Managing by the Numbers

1. Increase the speed in which critical decisions are made in the business.

2. Increase the accuracy of decisions.

3. Learn to use the numbers as a primary measurement for organizational accountability.

4. Learn where to focus management attention.

The Language of Numbers

• Universal• Language of Comparison and

Relativity• Percentages give a more complete

picture• Trends tell the best tale

Manifest Management

7 Rules for Increasing Organizational and Individual Frequency

1. Establish measurements in advance.

2. Eliminate sacred cows.

3. Test unproven theories.

4. Measure results frequently and course correct as needed.

5. Reward creativity and contributions

6. Harness the IQ and power of others.

7. Don’t be afraid to test new ideas. (Fail Faster)

ACME Widgets, Corp.

Financial Statement

Sales $950,000Cost of Goods Materials $300,000 Labor $250,000 Freight In $40,000Total COGS $590,000Gross Profit $360,000Indirect Expenses Sales and Mktg $95,000 Maint/Repair $35,000Total Indirect Exp. $130,000Fixed Expenses Rent $36,000 Owners Salaries $40,000 Admin Wages $26,000 Depreciation $18,000 Office Expenses $14,000 Misc Costs $9,000Total Fixed Exp $143,000Net Profit $87,000

$996,000

$327,000$245,000 $42,000$614,000$382,000

$105,000 $22,000$127,000

$35,000 $45,000 $24,000 $14,000 $16,000 $8,000$142,000$113,000

Last Year

100%

31.6%26.3% 4.2%62.1%37.9%

10.0% 3.7%13.7%

3.8% 4.2% 2.7% 1.9% 1.5% 0.9%15.0% 9.1%

100%

32.8%24.6% 4.2%61.6%38.4%

10.5% 2.2%12.7%

3.5% 4.5% 2.4% 1.4% 1.6% 0.8%14.2%11.3%

Budget % Budget $

$1,100,000

31.0% $294,50024.0% $228,000 4.2% $39,90059.2% $562,40040.8% $387,600

11.0% $104,500 2.5% $23,75013.5% $128,250

$36,000 $45,000 $25,000 $18,000 $10,000 $5,000

12.8% $141,00014.5% $159,500

Flash Reports

• Key indicators on a daily or weekly basis• Measure across major business areas

(financial-p&l and balance sheet, marketing, sales, production, quality)

• Micro problems vs Macro problems• Revolutionary vs Evolutionary• Threads

Fair Market Value – factor in obsolescence, Uncollectability, depreciation

Multiple of earnings – Stability, recurrence, marketing engine, operations without owner, management team. Usually 2 to 6 times earnings.

Kicker on earnings.

Industry KPI’s

• 10 companies participated.

Industry KPI’sExpenses

Balance Sheets

Org/Marketing Numbers

Revenue by Profit Center

Revenues and Costs By Sector

Sales Numbers

Maintenance Contracts

Service Rates

Marketing Cost/Lead

Owner’s Duties