As the Project Leader of TurboCASH Accounting I am always looking for ways to improve the working business lives of our 100 000 small businesses users and the million people that have downlaod TurboCASH. It was a breakthrough for me when Rudi Kruger, the Prophet of Profit agreed to give me an interview and share his views with us. Rudi, a self made businessman with a history that includes listing the Paradym Software Group, is usually associated with brand building for some of the largest International companies, so it was a revelation to find out that his passion is helping small businesses.
Philip Copeman : Lets start with you elevator pitch for small business.
Rudi Kruger : An elevator pitch is the same as a Tweet, less that 140 chars. Provide complete solutions, focus on Profit and the rest will follow. #kruger
Philip : Well that says it. “Complete solutions” What do you mean by that?
Rudi : Small businesses have to focus on noche business and get an edge in a area that largere business cannot attend to. However most forget to make this a complete soultion. If the there are ends hannging about, where consumers still have to buy in fro other suppliers, you rtun the risk of customers drifting off. If you are gogin to supplyt bedside lamps, make sure they come with globes and a plug attached. Even offer to plug it in fro the customer. Donl't ship him a bis that you have piecked up from a warehouse and expect him to go off to the hyer strore to buy the accessories. He may never come back.
Philip : That is a new approach. I have always advocated a specialised segmentation for small business but I have never thought of it that way. Customer retention has got to be important. I guess its a variation on the Last Mile concept.
Rudi : Yes Small business always has an advnatage over the last miel. So when the big business thinks iots al ldoen a dusted, the marketing has been done, products are deployed a ready for sale, the small business can sneak in at the last moment and make the sale. But it usually takes the complete solution as the means to provide the compellign business case.
Philip : And what of the focus on profit. What is that? Surely cashflow is more important than profit?
Rudi : Of course cashflow is important, when you run out of cashflow, crisis follows. Many SMEs spend their whole careers battling cashflow and entrepreneurs take pride in their ability to handle it. Sadly though, battling cashflow is not the secret to a successful business.
One of the models I produce and explain in my SME workshops is the Porfit Model. What are the factors that effect profit. Most SME spend too much time focusing on costs and not enough on revenue. Revenue is the biggest driver of profit and profit is the biggest driver of cashflow. A 10% increase in price and 10% increase in sales can amount to a 25% increase in profit.
A small amount of time analysing your business revenue and ways to improve it, could banniosh cashflow problems forever.
Philip : Whoah we are accountants here, bean counters. Are you telling us that managing costs are not important?
Rudi : No I am not saying that. There are time in a busienss life cycle where managign costs is paramount. But that is usually the indulgence of a more mature business. You have to know where you are int eh business life cycel to decide where to put the focus.
Philip : Business Lifer cycle? What is that?
Rudi : Thats part 2. We only get to that after tea in the 4 hour MBA.
Philip : Life Cycles, 4 hour MBA? This is going to be something.
to be continued ...
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