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Savage Consulting is a Caymanian Business Management Consulting Firm, helping businesses to transform and grow. We bring our cross-functional expertise to create value and improve business performance.
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MANAGING PARTNERS
CARLO ARTANA
EUGENE NOLAN
An expert at the strategic planning process, meeting customer service goals, finance and business strategy, both in US and EU travel retail and airport industries. Visionary in the creation and execution of customer-centric business plans. He’s equally passionate, analytical, and decisive. He uses his vast knowledge of financial analysis and budget planning to transform businesses and help them to grow.
A passionate customer experience advocate and innovator with Caribbean wide expertise in operations management, finance operations, and business development. He helps develop growth strategies and financial projections that will build brand loyalty, grow profit margins, and enhance efficiency. He takes the frustration out of the technical aspects of business planning.
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Like a good doctor, Savage Consulting addresses your unique pain points. Whether it’s turning your idea into a startup, transforming or selling your existing company, we can offer key recommendations and solutions. In these unique times, we condition your business strategy to get it healthy and on its feet. Our approach is unique, personal, and fluid. This is how we take care of your individual needs. EVOLVING YOUR BUSINESS IN A POST-COVID WORLD
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EVOLVING YOUR BUSINESS IN A POST-COVID WORLD
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The global economy is plunging into the worst peacetime RECESSION* in a century
* Source Organization for Economic Cooperation and EVOLVING YOUR BUSINESS IN A POST-COVID WORLD Development
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MACRO-ECONOMIC INDICATORS WORLDWIDE – THE WORLD ECONOMY ON A TIGHTROPE
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The global economy outlook is highly uncertain. Two scenarios are probable: either a second outbreak is avoided, with global GDP regaining its pre-crisis level by end 2021, or a second COVID-19 outbreak occurs in most economies before the end of 2020, leading to global GDP remaining well short of pre-crisis levels by end 2021.
* Source: OECD Economic Outlook – June 2020 EVOLVING YOUR BUSINESS IN A POST-COVID WORLD
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MACRO-ECONOMIC INDICATORS CAYMAN
-12% POTENTIAL 2020 GDP IMPACT
9,582 POTENTIAL 2020 JOB LOSSES
19.7%
POTENTIAL UNEMPLOYMENT RATE Source: The Honourable Roy McTagart, Minister of Finance, Cayman Islands May 2020 EVOLVING YOUR BUSINESS IN A POST-COVID WORLD
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HOW DO WE REACT?
DISCUSSION TOPICS
ASSESS
Assessment of your key business challenges & opportunities
• Understand your market positioning • Evaluate overall business operations • Assess your financials
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PLAN
Revising your business model
• Develop a business/strategic operating plan • Identify key actions • Focus on CX transformation
BUDGET Create an achievable and realistic budget
• Reforecast revenues • Evaluate your revised cost baseline • Create your budget
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EXECUTE
Implementation of your revised plan
• Planning techniques • KPI’s • Risk management
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1 – BUSINESS ASSESSMENT
ASSESS
Assessment of your key business challenges
• Understand the market scenario • Evaluate overall business operations • Assess your financials
EVOLVING YOUR BUSINESS IN A POST-COVID WORLD
PLAN
Revising your business model
• Develop a business/strategic operating plan • Identify key actions • Focus on CX transformation
BUDGET Create an achievable and realistic budget
• Reforecast revenues • Evaluate your revised cost baseline • Create your budget
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EXECUTE
Implementation of your revised plan
• Planning techniques • KPI’s • Risk management
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YOUR BUSINESS ASSESSMENT IN 7 STEPS 07
01
Complete a Financial assessment
Understand market positioning
06
Perform a SWOT analysis
05
Understand your Customers’ Experience
BUSINESS ASSESSMENT
02
Evaluate your products and services
03 04
Assess Sales& Marketing Capabilities
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Consider market segmentation
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ASSESSING YOUR BUSINESS STEP 1 – UNDERSTAND YOUR MARKET
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ASSESSING YOUR BUSINESS STEP 2 – PRODUCT & SERVICES
Products/services based on what customers need
How the customer explained it EVOLVING YOUR BUSINESS IN A POST-COVID WORLD
How the team designed it
How the business consultant describe it WWW.SAVAGE.CONSULTING
What the customer really needs 16
CUSTOMERS FOR YOUR PRODUCTS, FIND PRODUCTS FOR YOUR
ASSESSING YOUR BUSINESS STEP 2 – PRODUCT & SERVICES - PRICING
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• Analyse your local competition pricing & positioning • Do a survey/focus group to understand what the customer is willing to pay • Analyse pricing on some marketplace/ecommerce portal • Be aware of your margin base - use industry standards • Keep a laser sharp focus on your costs to sell • Arrive at the optimized price for value WWW.SAVAGE.CONSULTING
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ASSESSING YOUR BUSINESS STEP 3 – MARKET SEGMENTATION
MARKET SEGMENTATION
GEOGRAPHICS
DEMOGRAPHICS
PSYCHOGRAPHICS
BEHAVIORAL
Location Language Area Population
Age Gender Income Education Social Status Family Life Stage Occupation
Lifestyle Activity Interest Opinion Concerns Personality Values Attitudes
Benefits Sought Purchase Usage Intent Occasion Buyer Stage User Status Life Cycle Stage Engagement
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ASSESSING YOUR BUSINESS STEP 4 – MARKETING CHANNELS Pre COVID-19
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Post COVID-19
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THE IMPORTANCE OF SOCIAL MEDIA
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THE IMPORTANCE OF SOCIAL MEDIA
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ASSESSING YOUR BUSINESS STEP 4 – SALES CHANNELS
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THE CONTINUED RISE OF ECOMMERCE SHOPPING IN CHALLENGING TIMES
+74% Increase of transaction volumes in most eCommerce retail sectors in March 2020 compared to 2019
Source: pymnts.com research EVOLVING YOUR BUSINESS IN A POST-COVID WORLD
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ASSESSING YOUR BUSINESS STEP 4 – SALES CHANNELS
SELL THROUGH MORE THAN ONE CHANNEL • Rethink your physical store • On-line presence • Mobile responsiveness • Advanced Social Media usage
57%
of users say they won’t recommend a business with a poorly-designed mobile site research Source: socpub.com
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61% of users are unlikely to return to a mobile site they had trouble accessing and 40% visit a competitor’s site instead Source: Google research
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ASSESSING YOUR BUSINESS STEP 5 – CUSTOMER EXPERIENCE
WHY CUSTOMER EXPERIENCE MATTERS? Because it links employees and customer engagement to business performance Happy employees
Happy customers
Lower churn
More revenues
Employee engageme nt
Customer satisfactio n
Customer churn
Business growth
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WHY MEASURING CUSTOMER EXPERIENCE MATTERS?
82% EVOLVING YOUR BUSINESS IN A POST-COVID WORLD
of customers left a company because of a bad customer service experience Source: socpub.com research
Customer churn
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IN FACT
86% EVOLVING YOUR BUSINESS IN A POST-COVID WORLD
of customers will pay more for a better customer experience Source: socpub.com research
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ASSESSING YOUR BUSINESS STEP 5 – MEASURING CUSTOMER EXPERIENCE
DIFFERENT METHODOLOGIES • Surveys • Focus groups • Mystery shopping • Social media engagement • 1-to-1 interview • Instant feedback ( )
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ASSESSING YOUR BUSINESS STEP 6 – SWOT ANALYSIS
Strength What do you do well?s
What unique resources can you draw on? What do others see as your strengths? Opportuniti es What opportunities are open to you?
What trends could you take advantage of? How can you turn strengths into opportunities?
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SW OT WWW.SAVAGE.CONSULTING
Weaknesses What could you improve? Where do you have fewer resources then others? What are others likely to see as weaknesses? Threats What threats
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ASSESSING YOUR BUSINESS STEP 7 – FINANCIAL ASSESSMENT If you DON’T have financial statements – otherwise go to STEP 1 • Gather all of your receipts you have available • Ask your main vendors/suppliers for an “activity report” for the last two years • Download two years of bank AND credit card statements into excel and perform a preliminary financial analysis by: Sorting bank statement by description Allocating each transaction with a revenue or expense code (e.g. utilities, repairs & maintenance, revenue) Summarise revenue and cost categories by year to create basic financial statements
STEP 1 – use your financial statements to • Analyse your current expenses to see how you can cut costs: Cash is King: once it leaves your bank account you cannot get it back Go through your accounts on-line by line basis and ask yourself if that expense is necessary or whether can it be reduced Go through your credit cards – are there any monthly amounts coming out which you don’t use/need Reach out to service providers – can they give you a discount and/or deferred payment on current debt Record additional expenses incurred due to the pandemic Check your insurance policies
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ASSESSING YOUR BUSINESS CURRENT SITUATION – MAP YOUR POSITION
H
Competitor 2 Competitor 1
Competitor 8 Competitor 3
YOU
H
L
PRICE
Competitor 5
Competitive Price/Service Matrix
Competitor 4 Competitor 6
L SERVICE/CX
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2 – REVISE YOUR BUSINESS MODEL
PLAN
Revising your business model
• Develop a business/strategic operating plan • Identify key actions • Focus on CX transformation
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HOW MUCH OF OUR PRODUCTS/SERVIC ES CAN WE SELL?
WHO CAN I SELL IT TO?
HOW MUCH WILL IT COST ME TO SELL IT?
HOW WILL I MARKET IT?
WHAT WILL MY CUSTOMER EXPERIENCE LOOK LIKE?
HOW WILL I MANAGE PERFORMANCE?
EFFECTIVE SALES & MARKETING
– CREATE A –
SALES &
MARKETING
PLAN
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A COMPREHENSIVE PLAN WHICH INCLUDES: • Target compensation • Right staffing • Effective marketing channels • A bit of creativity • Use of advanced Social Media tools • Don’t forget to measure ROI WWW.SAVAGE.CONSULTING
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COVID SAFETY
– CREATE A –
COVID
PLAN
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A COMPREHENSIVE PLAN WHICH INCLUDES: • Steps to take in the event an employee tests positive • Communicate your plan to your customers
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3 – REFORECAST YOUR BUDGET IN A REALIST WAY
BUDGET Create an achievable and realistic budget
• Reforecast revenues • Evaluate your revised cost baseline • Create your budget
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ASSESSING YOUR BUSINESS CURRENT SITUATION – FINANCIAL ASSESSMENT Prepare a 12-month budget • Analyse your historical sales and evaluate future sales based on a realistic COVID-19 impact • Based on the previous STEP 2 cost analysis, you will be able to determine your monthly fixed costs for the next 12 months • Combine your monthly revenue and cost projections in a simple Excel spreadsheet
Build a realistic Cash Flow plan • Prepare your cash flow statement in an Excel spreadsheet and be extremely conservative. Assume Cayman lockdown will continue for another 3 months; Assume Cayman borders will be closed for the rest of the year Pay particular attention to when larger amounts of monies are due: e.g. Work Permits Insurance Renewal dates Do not forget to take into account current payables Manage Inventory Tightly
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3 – REFORECAST YOUR BUDGET IN A REALISTIC WAY. FROM PLAN TO BUDGET P&L Sample Company Inc.
MONTH 1
MONTH 2
MONTH 3
Revenues Product sales
15,000
15,750
16,695
Service sales
3,000
3,150
3,340
Total Revenues
18,000
18,900
20,035
7,000
7,180
7,420
11,000
11,720
12,615
Salaries & Wages
5,000
5,000
5,000
Rent
1,500
1,500
1,500
Insurance
250
250
250
Office expenses
150
150
150
Utilities
300
300
300
Total Expenses
7,200
7,200
7,200
EBITDA
3,800
4,520
5,415
500
500
500
3,300
4,020
4,915
Cost of good sold Gross Profit Expenses
Loan interest Net Profit EVOLVING YOUR BUSINESS IN A POST-COVID WORLD
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3 – REFORECAST YOUR BUDGET IN A REALISTIC WAY. FROM PLAN TO BUDGET Cashflow Statement Cash Inflows Revenue Total Cash Inflows
MONTH 1
MONTH 2
MONTH 3
MONTH 4
MONTH 5
$10,000 $10,000
$20,000 $20,000
$20,000 $20,000
($50) ($5,000) ($1,000) ($2,000)
($50) ($5,000) ($1,000) ($2,000)
($50) ($5,000) ($1,000) ($2,000) ($1,000) ($9,050) $10,950 ($1,250) $9,700
Cash Outflows Bank Charges Salaries & Wages Health Insurance Utilities Professional Fees Work Permit Renewal Total Cash Outflows
($9,050)
($6,050)
($4,100)
($8,500)
($5,000) ($13,050)
Net Cash Inflow/(Outflow) Opening Cash Balance Closing Cash Balance
($9,050) 12,000 $2,950
($6,050) $2,950 ($3,100)
($4,100) ($3,100) ($7,200)
$1,500 ($7,200) ($5,700)
$6,950 ($5,700) ($1,250)
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($50) ($5,000) ($1,000) ($2,000) ($1,000)
($50) ($4,000) ($1,000) ($1,000)
($50) ($3,000) ($1,000) ($50)
MONTH 6
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3 – REFORECAST YOUR BUDGET IN A REALIST WAY. FROM PLAN TO BUDGET ANSWERS TO QUESTIONS
ACTIONS
• HOW MUCH OF OUR PRODUCTS/SERVICES CAN I SELL? • WHO CAN I SELL IT TO? • WHAT WOULD BE THE COVID-19 IMPACT ON MY SALES? • CAN I LUNCH NEW PRODUCTS AND/OR ADJUST THE OLD ONES?
• EVALUATE MACRO-ECONOMIC INDICATORS IN CAYMAN AND MAKE ASSUMPTIONS ON COVID-19 IMPACT • USE HYSTORICAL SALES DATA TO ANALYSE TRENDS AND ADJUST MONTHLY SALES BASED ON COVID-19 IMPACT • EVALUATE POTENTIAL INCREASE IN SALES DUE TO NEW PRODUCTS/SERVICES OR NEW • NEGOTIATE BETTER DEALS WITH SUPPLIERS DISTRIBUTION CHANNELS POSSIBLE • IF IMPROVE CUSTOMER EXPERIENCE TO • SMART INVENTORY MANAGEMENT IMPROVE SALES
• HOW MUCH DOES YOUR PRODUCT COST TO PRODUCE & SELL?
BUDGET AREA
REVENUE COST OF GOODS
GROSS PROFIT • HOW MUCH DOES IT COST TO SUPPORT BUSINESS OPERATIONS? • WHAT ARE MY CURRENT FIXED EXPENSES?
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• EVALUATE YOUR EXPENSES AND CUT WHERE POSSIBLE • ALLOCATE THE RIGHT DOLLARS IN THE RIGHT MEDIA • CONSIDER SOME COST TO IMPROVE CX WWW.SAVAGE.CONSULTING
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4 – IMPLEMENT YOUR REVISED PLAN
EXECUTE
Implementation of your revised plan
• Planning techniques • KPI’s • Risk management
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EXECUTE PLAN & PRIORITISE ANALYSIS PHASE
BUDGET PHASE
EXECUTION PHASE
• Task 1
• Task 1
• Task 1
• Task 2
• Task 2
• Task 2
• Task 3
• Task 3
• Task 3
JUNE-2020
JULY-2020
AUG 2020
Today EVOLVING YOUR BUSINESS IN A POST-COVID WORLD
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EXECUTE MEASURE MEASURE MEASURE Area
Details
Measurement
Sales
Timeline
• Measure sales performance against targets by product/service
• Actual vs Plan
• Daily • Weekly • Monthly
• Measure effectiveness of marketing channels vs cost
• Engagement • Conversion to sales
• Weekly • Monthly
• Measure actual costs vs budget
• Actual vs Plan
• Monthly
• Introduce key customer satisfaction measures NPS or Cust Sat Index – Set targets
• CSI or NPS vs target
• Monthly
• Measure (and adjust as necessary) completion of business plan actions
• NA
• OCT -JAN’19
Marketing
Operating Costs
Customer Experience
Initiative Tracking
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EXECUTE MANAGE RISK
Likelihoo d
Severity
• M
• H
• Furlough Staff • Communications plan
• M
• M
• Hire temporary relief
• Cost base is higher than expected
• M
• H
• Reduce costs in key areas
• Sales not at the planned level
• M
• H
• Evaluate Sales Incentives • Reduce costs to maintain profitability
RISK AREA COVID WAVE 2
Staffing
Details • Lockdowns re-introduced • Business closed • Lose staff to illness
Mitigating Actions
Costs higher than plan
Revenues behind plan.
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TO SUMMARISE - BE REALISTIC
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TO SUMMARISE – SMART PLANNING
ASSESS
Assessment of your key business challenges & opportunities
• Understand your market positioning • Evaluate overall business operations • Assess your financials
EVOLVING YOUR BUSINESS IN A POST-COVID WORLD
PLAN
Revising your business model
• Develop a business/strategic operating plan • Identify key actions • Focus on CX transformation
BUDGET Create an achievable and realistic budget
• Reforecast revenues • Evaluate your revised cost baseline • Create your budget
WWW.SAVAGE.CONSULTING
EXECUTE
Implementation of your revised plan
• Planning techniques • KPI’s • Risk management
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