Late Fall 2008- Personal Interview with ‘The Business Doctor’, Michael Marshall

Late Fall 2008

Interview with Michael Marshall, ‘The Business Doctor’

 

 

INTERVIEWER

We have a few questions for you relating to what some refer to as ‘The Plan’.

When people talk about ‘not meeting plan’, ‘below plan’, ‘exceeding plan’ or ‘meeting plan’, what are they talking about?

 

REPLY

‘Plan’ can refer to many things including, new product development, new products and services released into the market, marketing, marketing communications, increasing production capacity, expanding sales into new markets, expanding sales internationally, mergers and acquisitions, the general business plan, sales revenue and profit revenue goals and other things.

Generally speaking, when people talk about ‘meeting plan’, ‘not meeting plan’ or ‘exceeding plan’ they most often are referring to sales and profit revenue goals, quarterly and annual.

So, for this discussion let’s presume ‘the plan’ refers to the sales and profit revenue goals, quarterly and annual.

 

INTERVIEWER

Who determines the ‘plan’ or sales and profit revenue goals?

 

REPLY

 

 

This depends on the size company or business, whether private or public and several other factors.

Generally speaking, it is senior management, owner, president and maybe VP level.

 

INTERVIEWER

Is a ‘plan” and sales and profit revenue goals important, and if so, why?

 

REPLY

Yes, it is important especially if all of the important details and research has been appropriately done and incorporated into ‘the plan’ and sales/profit revenue goal.

Having a ‘plan’ and revenue goals is pretty fundamental in managing a business.

A plan well thought out with an action plan behind it to help successfully reach the goals is like a ship with a rudder, a compass and a map.

With a rudder, compass and map; a ship can reach its intended destination.

Without these things, a ship would cruise around in circles possibly never reaching its intended destination.

Possibly, such a ship without a rudder, compass and map, could run out of fuel that powers it just like a company or organization running out of money or profits then going out of business.

‘The plan’ and revenue goals correlate with the financial budgets as to how much money will be spent on what and still have some profit left over.

Companies and organizations need to spend money on various things to be in business and grow but it also needs to stay profitable to stay in business.

‘The plan’, sales/profit revenue goals, action plan supporting ‘the plan’ and budgets are all part of managing the business and growing the business.

Without these fundamentals, a company, business or organization may be doomed to struggles and possible failure.

Publicly owned companies must have these fundamentals in place.

With privately owned companies, businesses and organizations requiring bank financing for any reason, their bank or lending institution will normally require such fundamentals.

Smaller private businesses and companies not requiring bank financial funding for anything may not be required to have these fundamentals in place but they may have some struggles and missed growth opportunities, if they have not established these things.

 

INTERVIEWER

Are you advocating that all companies, businesses and organizations, no matter of size, being public or private; have ‘a plan’, sales and profit revenue goals, and an action plan supporting this, to be successful.

 

REPLY

Simply speaking, yes.

 

INTERVIEWER

What details go into establishing ‘the plan’ and the sales and profit revenue goals?

 

REPLY

 

 

This is a very good question.

There are several answers to this question.

 

INTERVIEWER

Is establishing sales and profit revenue goals, ‘the plan’, complicated and difficult?

 

REPLY

No, it is not complicated or difficult but things can influence the revenue goals, objectives and establishing ‘the plan’.

 

INTERVIEWER
Please go into some details with this.

I suspect you have some very interesting information and probably some very sensitive things that you can share with us.

Knowing you, you will try to be politically correct and careful of such sensitivities.

Am I right about this?

 

REPLY

Yes you are.

This subject does have some sensitive areas.

 

INTERVIEWER

Please explain these sensitive areas as well as what details go into establishing ‘the plan’ and the sales and profit revenue goals.

 

REPLY

Let’s start with the sensitive areas then we will go into the details of what is supposed to go into establishing sales and profit revenue goals, ‘the plan’.

Depending on the company, organization or business, the sales and profit revenue goal, ‘the plan’ can just be dictated by the senior executive or senior management.

This can happen without the appropriate details and without the valuable inputs from staff and departments.

This can happen without a detailed action plan of how to succeed in reaching the sales/profit revenue goals, ‘the plan’.

This of course can create some stress on the staff and employees.

 

INTERVIEWER

Wait a minute.

Are you saying that some business owners, presidents, VP’s and other senior management can arbitrarily set a sales and profit revenue goal, ‘the plan’ without the input of their departments and staff, and possibly without a detailed plan on how to successfully reach the goal.

 

REPLY

Yes, that is correct.

What also can happen is senior management does ask departments and staff to help establish ‘the plan’ of sales and profit revenue goals; but the staff can make false estimates lacking details and lacking a detailed plan on how to successfully achieve the goals.

So the staff themselves can give bad information to the senior executives or senior management.

 

INTERVIEWER

This sounds like many individuals may not have the skills to be making or influencing such decisions and probably should not even be in their position.

 

REPLY

Like I said, this subject has some sensitive areas.

 

INTERVIEWER

Are the individuals establishing or influencing the sales revenue goals and ‘the plan’ normally trained and educated in this?

 

REPLY

Again this has some sensitive areas.

Let’s say that some individuals are trained and educated and have very good experience, and others are not.

 

INTERVIEWER

Would you say that most individuals that are establishing or influencing the sales revenue goals and ‘plan’ are trained and capable?

 

REPLY

I would not say that most or the majority is well trained, but again it ranges depending on company or organization.

Again, this is one of those sensitive areas.

 

INTERVIEWER

What details should go into establishing sales and profit revenue goals that is often referred to as ‘the plan’?

 

REPLY

Now this is a great question.

The sales and profit revenue goal has to be backed up by many details along with a progressive action plan that support achieving the goals.

Just setting a number as the goal and as ‘the plan’ without such details is ignorance and stupidity.

Many details should go into establishing ‘the plan’ and sales/profit revenue goal.

Let’s first discuss quickly what is called SWOT.

SWOT is an abbreviation for;
Strengths
Weaknesses
Opportunities
Threats

This approach is used not only to help establish ‘the plan’ and revenue goals but also for marketing, strategy, product development and other fundamental business things.

This can also be used to establish ‘the budget’ as to how much money is to be spent on what and why.

SWOT is a subject or school class of itself so let’s proceed.

Products and services life cycle have to be analyzed as it relates to establishing revenue goals.

Some products and services have potential to increase sales and profits while others are decreasing due to product life cycle.

As new and better products become available in the marketplace the demand and sales for older products decrease.

New products and services being introduced into the market by the company or by its’ competitors has to be analyzed and taken into consideration regarding ‘the plan’ and sales/profit revenue goal.

Along with this has to be time frame to ramp up market demand and market acceptance for such new products and services.

Remember that there is a time line for ramping up market acceptance and demand for new products and services.

The time line is normally over 1 to 5 years and typically not 1 to 5 months.

There are exceptions but I highly advise every one not to think that they are the exception.

Also keep in mind that new products and services can possibly take sales away from established older products and services that a company has.

But if the companies themselves do not control moving sales from older products to their newer products and services, their competition will be happy to move sales over to them.

Competition is a factor.

Pricing is a factor.

Quality can be a factor.

Delivery can be a factor

New products and services are a factor.

Production and staff capacity can be a factor.

Marketing is a factor.

And numerous other things are factors.

I think you can see how there are many details that need to go into establishing ‘the plan’ and revenue goals.

 

INTERVIEWER

You just mentioned many things including SWOT, establishing budgets, product life cycles, new products and services introduction and market ramp up time, investing in production capabilities and capacity, pricing, competition, quality, delivery, and some other things.

It is amazing how many things affect a business, ‘the plan’ and sales/profit revenue goals.

 

REPLY

Yes it is amazing.

This is why I strongly advocate continual education and training in these subjects for all individuals who are establishing or influencing ‘the plan’, sales/profit goals and the action plan that support these things.

 

INTERVIEWER

What happens when something does not go well after the ‘the plan’ and sales revenue goals have been established?

 

REPLY

Like what?

Give me some examples of what could happen that would change the situation.

 

INTERVIEWER

Several things could happen.

Maybe a company’s product or service could fail for some reason;
quality issues.

Maybe a materials shortage can prevent a company from shipping.

Maybe a competitor significantly reduces their pricing to gain market share.

Maybe a competitor comes out with new products or new services that is superior to others.

Maybe a company’s top customers have financial difficulties and sales decline.

Maybe a company loses its top customers for some reason.

What happens then?

 

REPLY

Very good

You are starting to understand some of the dynamics that go onto ‘the plan’ and sales/profit revenue goals.

All of these things and many other things can happen.

If an organization has established a high or too aggressive of a ‘plan’ and sales revenue goal, these things could certainly dramatically affect meeting ‘the plan’ and revenue goal.

As I mentioned before, competition analysis and market insights is an important part of the details that go into establishing ‘the plan’ and revenue goals early on.

Many of these things can be uncovered and planned for prior to establishing ‘the plan’ and sales/profit revenue goals’.

As I often say, “being proactive and progressive can avoid many unpleasant things and stimulate many good things”.

When things happen or market conditions negatively affect achieving or meeting ‘the plan’ and revenue goals, several things have to occur.

 

 

1. Formally adjust the ‘the plan’ and revenue goals

 

 

2. Adjust budgets to assure profitability

 

 

3. Determine what aggressive actions that your specific organization can do to help lessen the impact or improve your position

 

 

4. Determine if you can possibly speed up releasing new products and new services to the market

 

 

5. Adjust your business strategies

 

 

6. And anything else possible that can help the situation

 

 

Again, with releasing new products and new services, you must keep in mind three important things.

 

 

1. New products and services could take sales away from your other products and services

 

 

2. There is a time line for new products and services to gain market acceptance and demand.  This time line is normally 1-5 years and not 1-5 months

 

 

3. If you do not develop new products and services, you are at risk of competition doing so and taking your business.

 

 

You can understand why those establishing revenue goals and ‘the plan’ need extensive training and education.

 

 

This subject can be an entire school class of its’ own.

You had asked earlier if the majority or the minority of individuals who have the authority to establish or influence ‘the plan’ and revenue goal, have appropriate training and education in this, to assure some competency.

This is a sensitive area.

To gain some perspective and insight on what percentage or amount of individuals who are actually trained in this to assure competency, I suggest asking those who do establish or influence ‘the plan’ and revenue goals about the training and education they have in this.

 

INTERVIEWER

This interview session has been educational and insightful.

You have kept it fairly easy to understand.

I can understand why you promote the importance of continual education and training.

Thanks again for sharing.

This entry was posted in Personal Interviews. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *