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Confidential© Equiteq 2015 equiteq.com
Growing equity, realizing value
8 Levers Webinar Series
Quality of Fees Webinar
Confidential© Equiteq 2015 equiteq.com
Reduce your risk in fee income
and make it predictable
Confidential© Equiteq 2015 equiteq.com 3
When we look at a consulting firm we use our Equity Growth
Wheel
Market
Propositi...
Confidential© Equiteq 2015 equiteq.com
1. Reduce risk to revenue forecast
• Focus your services on a limited number of
sec...
Confidential© Equiteq 2015 equiteq.com 5
1.1 Focus your services on a limited number of sectors
Service-Market Matrix
Serv...
Confidential© Equiteq 2015 equiteq.com 6
1.2 Engage with a balanced portfolio of clients
20%
18%
15%
13%
10%
8%
7%
5%
3%
3...
Confidential© Equiteq 2015 equiteq.com
Service
Client
Service 1 Service 2 Service 3 Service 4 Service 5 Service 6 Grand To...
Confidential© Equiteq 2015 equiteq.com
1.4 Turn short-term, one-off projects into integrated
programmes that ensure you st...
Confidential© Equiteq 2015 equiteq.com
2. Manage cash so that growth is not constrained
9
1. Ensure you have 3 months of c...
Confidential© Equiteq 2015 equiteq.com
3. Ensure you have a process in place to balance capacity with
demand so that you m...
Confidential© Equiteq 2015 equiteq.com
For your Quality of Fees homework try these Start, Stop,
Continue strategies
11
Sta...
Confidential© Equiteq 2015 equiteq.com
Please make use of our free thought leadership material
12
Confidential© Equiteq 2015 equiteq.com
Growing equity, realizing value
UK +44 (0)203 651 0600
USA +1 (212) 256 1120
Singap...
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Making fee income more predictable, reducing risk

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How can you make client fee income more predictable and reduce forecast revenue risk?

We don’t want you to be in the position of asking your bank to cover your obligations because a client didn’t pay or because you’ve had a few quiet months. Learn about some tools you can use to avoid contributing to the bank’s profits and instead make your firm stable and more attractive to a potential buyer.

Published in: Business
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Making fee income more predictable, reducing risk

  1. 1. Confidential© Equiteq 2015 equiteq.com Growing equity, realizing value 8 Levers Webinar Series Quality of Fees Webinar
  2. 2. Confidential© Equiteq 2015 equiteq.com Reduce your risk in fee income and make it predictable
  3. 3. Confidential© Equiteq 2015 equiteq.com 3 When we look at a consulting firm we use our Equity Growth Wheel Market Proposition Intellectual Property Quality of Fee Income Sales & Marketing Process Consultant Loyalty Client Relationships Sales & Profit Growth Management Quality Equity Growth Wheel
  4. 4. Confidential© Equiteq 2015 equiteq.com 1. Reduce risk to revenue forecast • Focus your services on a limited number of sectors • Engage with a balanced portfolio of clients • Sell more of what you currently do to people you already know • Turn short-term, one-off projects into integrated programmes 2. Manage cash so that growth is not constrained 3. Ensure you have a process in place to balance capacity with demand so that you maintain good margins 4 Increase fee income predictability to reduce the risk to profit growth Market Proposition Intellectual Property Quality of Fee Income Sales & Marketing Process Consultant Loyalty Client Relationships Sales & Profit Growth Management Quality Equity Growth Wheel Quality of Fees lever elements:
  5. 5. Confidential© Equiteq 2015 equiteq.com 5 1.1 Focus your services on a limited number of sectors Service-Market Matrix Service Market Sector Service 1 Service 2 Service 3 Service 4 Service 5 Service 6 Grand Total Pharmaceutical 21,000 120,000 580,000 721,000 Financial Services 150,000 250000 50,000 20,000 470,000 Technology 100,000 150,000 250,000 Public Sector 150,000 20,000 170,000 Manufacturing 150,000 150,000 Retail 100,000 100,000 Defence 20,000 20,000 Law 20,000 20,000 Leisure 20,000 20,000 Education 9,000 9,000 Grand Total 171,000 120,000 250,000 300,000 299,000 710,000 1,930,000
  6. 6. Confidential© Equiteq 2015 equiteq.com 6 1.2 Engage with a balanced portfolio of clients 20% 18% 15% 13% 10% 8% 7% 5% 3% 3% - 25,000 50,000 75,000 100,000 125,000 150,000 175,000 200,000 1 2 3 4 5 6 7 8 9 10 40% 13% 10% 7% 5% 5% 5% 5% 5% 5% - 40,000 80,000 120,000 160,000 200,000 240,000 280,000 320,000 360,000 400,000 1 2 3 4 5 6 7 8 9 10 Client Revenue – High Risk Client Revenue – Low Risk
  7. 7. Confidential© Equiteq 2015 equiteq.com Service Client Service 1 Service 2 Service 3 Service 4 Service 5 Service 6 Grand Total Client 1 250,000 250,000 Client 2 240,000 240,000 Client 3 200,000 200,000 Client 4 200,000 200,000 Client 5 120,000 120,000 Client 6 115,000 115,000 Client 7 100,000 100,000 Client 8 100,000 100,000 Client 9 100,000 100,000 Client 10 75,000 75,000 Grand Total 75,000 200,000 250,000 300,000 200,000 475,000 1,500,000 7 1.3 Selling more of what you currently do to people you already know de-risks your future revenue Service-Client Matrix
  8. 8. Confidential© Equiteq 2015 equiteq.com 1.4 Turn short-term, one-off projects into integrated programmes that ensure you stick with the client 8 - 50 100 150 200 250 300 350 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 Project Revenue Pareto
  9. 9. Confidential© Equiteq 2015 equiteq.com 2. Manage cash so that growth is not constrained 9 1. Ensure you have 3 months of cost as cash in the bank 2. Implement favourable terms and conditions 3. Measure your debtor days 4. Use project managers to collect cash Average Debtor Days
  10. 10. Confidential© Equiteq 2015 equiteq.com 3. Ensure you have a process in place to balance capacity with demand so that you maintain good margins 10 Discounted Sales Pipeline Delivery Capacity at Full Sales Value - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Booked Hot Good 0 200000 400000 600000 800000 1000000 1200000 1400000 1600000 1800000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Undiscounted Discounted Booked Budget 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Utilisation Target Monthly Revenue Pipeline Cumulative Revenue Pipeline Capacity Utilisation Pipeline Index =
  11. 11. Confidential© Equiteq 2015 equiteq.com For your Quality of Fees homework try these Start, Stop, Continue strategies 11 Start getting better, monthly visibility of your future pipeline and matching it with capacityStart Stop Continue Continue to work within your existing sectors in order to grow new clients and avoid having all your eggs in too few baskets Stop trying to sell everything to everyone
  12. 12. Confidential© Equiteq 2015 equiteq.com Please make use of our free thought leadership material 12
  13. 13. Confidential© Equiteq 2015 equiteq.com Growing equity, realizing value UK +44 (0)203 651 0600 USA +1 (212) 256 1120 Singapore +65 6352 7482 Email info@equiteq.com www.equiteq.com

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