This is a column written by our representative, Kazuaki Sawada, detailing the insights he has accumulated in the field of business revitalization, management improvement, and bank relations.
We provide content that serves as decision-making material for managers, ranging from reading monthly trial balances, discussions with banks, organizational restructuring, to business succession.
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Please use this as hints for management decisions, such as building a management foundation, improving management quality, cash flow management, bank relations, business succession, and restructuring after the appointment of the second or third generation. Also, feel free to contact us with any questions or inquiries when putting this into practice.
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Management based on a productivity standard, such as earning a gross profit of 2 million yen per person per month, is effective when salespeople have the ability to achieve their targets, as it is simple and has low management costs. However, a focus on "amount" can lead to a chronic tendency to lower prices to secure orders, ultimately reducing productivity and losing competitiveness. The gross profit margin is the first button of profit and also serves as a barometer of competitiveness. Factors contributing to the decline in gross profit margin: 1. The top management has a low interest in gross profit margins, indicating a lack of understanding. 2. Salespeople are excessively lowering prices out of fear of losing business to competitors, indicating a lack of sales capability. 3. There is no system in place to control gross profit, indicating a lack of management capability. 4. Prices are being lowered based on customer demands, indicating a lack of information-gathering capability. 5. There is no product strategy or competitive products, indicating a lack of product strength. 6. Estimates were expected to be profitable, but ended up in the red, indicating a lack of cost management capability. How was that? If any of these items apply, immediate improvement is necessary. These represent situations where profits are being missed despite the potential to earn, so proper management is recommended. Next time, I will discuss "Maintaining a Focus on Numbers."
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Our company is a group of professional consultants who value practical insights born from responding to corporate needs. With practical management know-how and a strong belief, we solve management challenges and achieve everything from startup support, reconstruction and revitalization support, growth expansion support, and business continuity support to building a solid management foundation.
![[Management Column Vol. 8] Have a strong will to endure the time until harvest.](https://image.www.ipros.com/public/product/image/2098442/IPROS2330935538284208732.jpg?w=280&h=280)
