Introduction to One Sherpa Pty Ltd

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This is an introduction to one of Australia's leading educational mentoring businesses. It's unique technology will pinpoint business strengths and weaknesses and allow managers and owners to better manage the financial drivers in their business

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Introduction to One Sherpa Pty Ltd

  1. 1. THE WAY TO A BETTER FUTURE © Copyright One Sherpa Pty Ltd 2008
  2. 2. THE ONE SHERPA STORY Business leaders, carrying the load of responsibility for an organisation’s performance often feel isolated; and “going alone is a lonely way to go”. © Copyright One Sherpa Pty Ltd 2008
  3. 3. Our Relationship Managers guide you to ‘base camp’, the first step up the mountain; by assisting you complete an ‘x-ray’ of your business using our unique proprietary business fluoroscope. © Copyright One Sherpa Pty Ltd 2008
  4. 4. At ‘base camp’ you’ll meet one of our Business Sherpas, who will diagnose the health of your organisation and determine whether it is ready to make the climb to the fulfillment of your business vision. “Your business sherpa will faithfully guide you to a confident future.” © Copyright One Sherpa Pty Ltd 2008
  5. 5. You are then equipped to make an informed choice to engage us in the exhilarating experience of helping you reach the pinnacle of your business success. “There is nothing quite like the view from the top.” © Copyright One Sherpa Pty Ltd 2008
  6. 6. © Copyright One Sherpa Pty Ltd 2008
  7. 7. How to connect vision with your plan Many people are looking to get into business or are already working in their business with a vision of increasing their financial wealth. © Copyright One Sherpa Pty Ltd 2008
  8. 8. How to connect vision with your plan They have visions and aspirations but work incredibly hard for returns that continually disappoint them © Copyright One Sherpa Pty Ltd 2008
  9. 9. How to connect vision with your plan SO WHY DON’T THEY REACH THEIR VISION? © Copyright One Sherpa Pty Ltd 2008
  10. 10. Why is it so hard to reach your business goals? © Copyright One Sherpa Pty Ltd 2008
  11. 11. How to connect vision with your plan There are three areas we have identified that prevent people achieving the results they desire……. © Copyright One Sherpa Pty Ltd 2008
  12. 12. How to connect vision with your plan TRADITIONAL BUSINESS OUR BUSINESS FOCUS FOCUS Business Plan Business Model Sales and Marketing Interaction with Customers Making Profit Increasing Cash Flow These three differences means our focus is quite different and allows us to use our unique tools to assist business owners get better performance © Copyright One Sherpa Pty Ltd 2008
  13. 13. The analogy that holds the journey together Many business owners have no context from which to make their decisions © Copyright One Sherpa Pty Ltd 2008
  14. 14. The analogy that holds the journey together As a result they have no way to make clear cut decisions nor measure the results © Copyright One Sherpa Pty Ltd 2008
  15. 15. The Financial Fence® Way of Thinking © Copyright One Sherpa Pty Ltd 2008
  16. 16. “Some people think if they just implement our techniques they will be as successful as we are. But those that try often fail…you have to address employees’ fundamental way of thinking” Fujio Cho President Toyota © Copyright One Sherpa Pty Ltd 2008
  17. 17. • Many people who see The Financial Fence® have thought it is simply a new technique and way of reporting the numbers. © Copyright One Sherpa Pty Ltd 2008
  18. 18. • It is however a completely different way of thinking about the numbers which changes the paradigm around how you fund a business and measure its performance. © Copyright One Sherpa Pty Ltd 2008
  19. 19. Why use a fence? 1. Fences are made of two parts : A. Posts that anchor the fence into the ground at a point AND B. Rails that carry the fence over a distance. 2. Fences incorporate Milestones (Posts) and Activity (Rails) in the same analogy. 3. Financial statements have these two parts : A. “Milestones” - Balance Sheet. B. “Activity” – Profit & Loss Account & Cash Flow Statement. 4. Fences provide a boundary and security. © Copyright One Sherpa Pty Ltd 2008
  20. 20. The Standard two rail fence M M I I L ACTIVITY L E E S ACTIVITY S T T O O N N E E © Copyright One Sherpa Pty Ltd 2008
  21. 21. The Financial Fence® THE TWO MILESTONES ON THE FINANCIAL FENCE ® Capital Capital Debt Debt Funding Equity Equity © Copyright One Sherpa Pty Ltd 2008
  22. 22. The Financial Fence® THE THREE ACTIVITIES ON THE FINANCIAL FENCE ® Interaction with Infrastructure Capital Capital Customers Expenses Investment in Business Debt Debt Equity Equity © Copyright One Sherpa Pty Ltd 2008
  23. 23. The Financial Fence® PERFORMANCE MONITORING ON THE FINANCIAL FENCE ® Interaction with Infrastructure Capital Capital Customers Expenses Investment in Business Debt Debt Key Performance Equity Indicators Equity © Copyright One Sherpa Pty Ltd 2008
  24. 24. The Financial Fence® SINGLE DIRECTION OF MANY NON FINANCIAL EXECUTIVES Interaction with Infrastructure NET Customers Expenses PROFIT © Copyright One Sherpa Pty Ltd 2008
  25. 25. The Financial Fence® DIRECTIONS REQUIRED FOR TRADING THE FINANCIAL FENCE ® Interaction with Infrastructure Capital Capital Customers Expenses Investment in Business Debt Debt Key Performance Equity Indicators Equity © Copyright One Sherpa Pty Ltd 2008
  26. 26. Costing/ Pricing Bank Documents Statement Theoretical Actual Outcome Outcome Run out of money BUSINESS FAILURE © Copyright One Sherpa Pty Ltd 2008
  27. 27. The conundrum for the business owner BALANCE SHEET BALANCE SHEET “AS AT” “AS AT” ASSETS ASSETS SALES NET LIABILITIES CASHFLOW LIABILITIES EQUITY EQUITY © Copyright One Sherpa Pty Ltd 2008
  28. 28. The conundrum for the business owner BALANCE SHEET BALANCE SHEET “AS AT” “AS AT” ASSETS ASSETS SALES NET LIABILITIES CASHFLOW LIABILITIES EQUITY EQUITY © Copyright One Sherpa Pty Ltd 2008
  29. 29. Contrast To Traditional Business Thinking TRADITIONAL TRADITIONAL BALANCE SHEET BALANCE SHEET “AS AT” “AS AT” PROFIT & LOSS ACCOUNT “FOR THE PERIOD” ASSETS ASSETS COST GROSS NET SALES EXPENSES OF SALES MARGIN PROFIT LIABILITIES NET LIABILITIES CASHFLOW EQUITY EQUITY © Copyright One Sherpa Pty Ltd 2008
  30. 30. Contrast To Traditional Business Thinking TRADITIONAL TRADITIONAL BALANCE SHEET BALANCE SHEET “AS AT” “AS AT” PROFIT & LOSS ACCOUNT “FOR THE PERIOD” ASSETS ASSETS COST GROSS NET SALES EXPENSES OF SALES MARGIN PROFIT LIABILITIES NET LIABILITIES CASHFLOW EQUITY EQUITY © Copyright One Sherpa Pty Ltd 2008
  31. 31. Contrast To Traditional Business Thinking TRADITIONAL TRADITIONAL BALANCE SHEET BALANCE SHEET “AS AT” “AS AT” PROFIT & LOSS ACCOUNT “FOR THE PERIOD” ASSETS ASSETS COST GROSS NET SALES EXPENSES OF SALES MARGIN PROFIT LIABILITIES NET LIABILITIES CASHFLOW EQUITY EQUITY © Copyright One Sherpa Pty Ltd 2008
  32. 32. The Financial Fence® Way of Thinking WORKING WORKING CAPITAL CAPITAL COST CONTRIBUTION INFRASTRUCTURE NET SALES EXPENSES PROFIT OF INTERACTION MARGIN FIXED FIXED CAPITAL CAPITAL MOVEMENT MOVEMENT NET OPERATING NET IN WORKING IN FIXED PROFIT CASH FLOW CASHFLOW CAPITAL CAPITAL DEBT DEBT EQUITY EQUITY © Copyright One Sherpa Pty Ltd 2008
  33. 33. The Financial Fence® Way of Thinking WORKING WORKING CAPITAL CAPITAL COST CONTRIBUTION INFRASTRUCTURE NET SALES EXPENSES PROFIT OF INTERACTION MARGIN FIXED FIXED CAPITAL CAPITAL MOVEMENT MOVEMENT NET OPERATING NET IN WORKING IN FIXED PROFIT CASH FLOW CASHFLOW CAPITAL CAPITAL DEBT DEBT EQUITY EQUITY © Copyright One Sherpa Pty Ltd 2008
  34. 34. The Financial Fence® Way of Thinking WORKING WORKING CAPITAL CAPITAL COST CONTRIBUTION INFRASTRUCTURE NET SALES EXPENSES PROFIT OF INTERACTION MARGIN FIXED FIXED CAPITAL CAPITAL MOVEMENT MOVEMENT NET OPERATING NET IN WORKING IN FIXED PROFIT CASH FLOW CASHFLOW CAPITAL CAPITAL DEBT DEBT EQUITY EQUITY © Copyright One Sherpa Pty Ltd 2008
  35. 35. The Financial Fence® - Example Company BALANCE SHEET BALANCE SHEET “AS AT” “AS AT” THE FINANCIAL FENCE ® WORKING PROFIT & LOSS ACCOUNT WORKING CAPITAL “FOR THE PERIOD” CAPITAL $90,000 $230,000 SALES COST CONTRIBUTION INFRASTRUCTURE NET OF INTERACTION MARGIN EXPENSES PROFIT $1,750,000 -$1,400,000 $350,000 $200,000 $150,000 FIXED FIXED CASH FLOW STATEMENT CAPITAL CAPITAL “FOR THE PERIOD” $350,000 $375,000 NET WORKING OPERATING FIXED NET PROFIT CAPITAL MVT CASH FLOW CAPITAL MVT CASHFLOW $150,000 -$140,000 $10,000 -$25,000 -$15,000 DEBT DEBT $175,000 $190,000 EQUITY EQUITY $265,000 $415,000 © Copyright One Sherpa Pty Ltd 2008
  36. 36. The Financial Fence® - Example Company BALANCE SHEET BALANCE SHEET “AS AT” “AS AT” THE FINANCIAL FENCE ® WORKING PROFIT & LOSS ACCOUNT WORKING CAPITAL “FOR THE PERIOD” CAPITAL $90,000 $230,000 SALES COST CONTRIBUTION INFRASTRUCTURE NET OF INTERACTION MARGIN EXPENSES PROFIT $1,750,000 -$1,400,000 $350,000 $200,000 $150,000 FIXED FIXED CASH FLOW STATEMENT CAPITAL CAPITAL “FOR THE PERIOD” $350,000 $375,000 NET WORKING OPERATING FIXED NET PROFIT CAPITAL MVT CASH FLOW CAPITAL MVT CASHFLOW $150,000 -$140,000 $10,000 -$25,000 -$15,000 DEBT DEBT $175,000 $190,000 EQUITY EQUITY $265,000 $415,000 © Copyright One Sherpa Pty Ltd 2008
  37. 37. The Financial Fence® - Example Company BALANCE SHEET BALANCE SHEET “AS AT” “AS AT” THE FINANCIAL FENCE ® WORKING PROFIT & LOSS ACCOUNT WORKING CAPITAL “FOR THE PERIOD” CAPITAL $90,000 $230,000 SALES COST CONTRIBUTION INFRASTRUCTURE NET OF INTERACTION MARGIN EXPENSES PROFIT $1,750,000 -$1,400,000 $350,000 $200,000 $150,000 FIXED FIXED CASH FLOW STATEMENT CAPITAL CAPITAL “FOR THE PERIOD” $350,000 $375,000 NET WORKING OPERATING FIXED NET PROFIT CAPITAL MVT CASH FLOW CAPITAL MVT CASHFLOW $150,000 -$140,000 $10,000 -$25,000 -$15,000 DEBT DEBT $175,000 Milestone check $190,000 $90,000 + $350,000 = $440,000 EQUITY EQUITY $265,000 $175,000 + $265,000 = $440,000 $415,000 © Copyright One Sherpa Pty Ltd 2008
  38. 38. The Financial Fence® - Example Company BALANCE SHEET BALANCE SHEET “AS AT” “AS AT” THE FINANCIAL FENCE ® WORKING PROFIT & LOSS ACCOUNT WORKING CAPITAL “FOR THE PERIOD” CAPITAL $90,000 $230,000 SALES COST CONTRIBUTION INFRASTRUCTURE NET OF INTERACTION MARGIN EXPENSES PROFIT $1,750,000 -$1,400,000 $350,000 $200,000 $150,000 FIXED FIXED CASH FLOW STATEMENT CAPITAL CAPITAL “FOR THE PERIOD” $350,000 $375,000 NET WORKING OPERATING FIXED NET PROFIT CAPITAL MVT CASH FLOW CAPITAL MVT CASHFLOW $150,000 -$140,000 $10,000 -$25,000 -$15,000 DEBT DEBT $175,000 Top rail check $190,000 EQUITY $265,000 + $150,000 = $415,000 EQUITY $265,000 $415,000 © Copyright One Sherpa Pty Ltd 2008
  39. 39. The Financial Fence® - Example Company BALANCE SHEET BALANCE SHEET “AS AT” “AS AT” THE FINANCIAL FENCE ® WORKING PROFIT & LOSS ACCOUNT WORKING CAPITAL “FOR THE PERIOD” CAPITAL $90,000 $230,000 SALES COST CONTRIBUTION INFRASTRUCTURE NET OF INTERACTION MARGIN EXPENSES PROFIT $1,750,000 -$1,400,000 $350,000 $200,000 $150,000 FIXED FIXED CASH FLOW STATEMENT CAPITAL CAPITAL “FOR THE PERIOD” $350,000 $375,000 NET WORKING OPERATING FIXED NET PROFIT CAPITAL MVT CASH FLOW CAPITAL MVT CASHFLOW $150,000 -$140,000 $10,000 -$25,000 -$15,000 DEBT DEBT $175,000 Bottom rail check $190,000 EQUITY $175,000 - - $15,000 = $190,000 EQUITY $265,000 $415,000 © Copyright One Sherpa Pty Ltd 2008
  40. 40. PERFORMANCE MEASUREMENT Let’s look at a couple of our measurements © Copyright One Sherpa Pty Ltd 2008
  41. 41. RETURN ON SALES © Copyright One Sherpa Pty Ltd 2008
  42. 42. Return on Sales BALANCE SHEET Sales Return “AS AT” WORKING PROFIT & LOSS ACCOUNT WORKING CAPITAL “FOR THE PERIOD” CAPITAL COST CONTRIBUTION INFRASTRUCTURE NET SALES EXPENSES PROFIT OF INTERACTION MARGIN FIXED CASH FLOW STATEMENT FIXED CAPITAL “FOR THE PERIOD” CAPITAL MOVEMENT MOVEMENT NET OPERATING NET IN WORKING IN FIXED PROFIT CASH FLOW CASHFLOW CAPITAL CAPITAL DEBT DEBT DEFINITION EQUITY NET PROFIT divided by SALES EQUITY © Copyright One Sherpa Pty Ltd 2008
  43. 43. The Financial Fence® $150,000/$1,750,000*100=8.6% THE FINANCIAL FENCE ® PROFIT & LOSS ACCOUNT “FOR THE PERIOD” SALES COST CONTRIBUTION INFRASTRUCTURE NET OF INTERACTION MARGIN EXPENSES PROFIT $1,750,000 -$1,400,000 $350,000 $200,000 $150,000 ACTIVITY OF BUSINESS PROFIT TO SALES 8.6% © Copyright One Sherpa Pty Ltd 2008
  44. 44. RETURN ON CAPITAL © Copyright One Sherpa Pty Ltd 2008
  45. 45. The Financial Fence® Primary measure BALANCE SHEET Return Capital “AS AT” WORKING PROFIT & LOSS ACCOUNT WORKING CAPITAL “FOR THE PERIOD” CAPITAL COST CONTRIBUTION INFRASTRUCTURE NET SALES EXPENSES PROFIT OF INTERACTION MARGIN FIXED CASH FLOW STATEMENT FIXED CAPITAL “FOR THE PERIOD” CAPITAL MOVEMENT MOVEMENT NET OPERATING NET IN WORKING IN FIXED PROFIT CASH FLOW CASHFLOW CAPITAL CAPITAL DEBT DEBT DEFINITION EQUITY NET PROFIT divided by TOTAL CAPITAL EQUITY © Copyright One Sherpa Pty Ltd 2008
  46. 46. The Financial Fence® BALANCE SHEET BALANCE SHEET “AS AT” $150,000/($230,000+ $375,000)*100=24.8% “AS AT” THE FINANCIAL FENCE ® WORKING PROFIT & LOSS ACCOUNT WORKING CAPITAL “FOR THE PERIOD” CAPITAL $90,000 $230,000 SALES COST CONTRIBUTION INFRASTRUCTURE NET OF INTERACTION MARGIN EXPENSES PROFIT $1,750,000 -$1,400,000 $350,000 $200,000 $150,000 FIXED FIXED CASH FLOW STATEMENT CAPITAL CAPITAL “FOR THE PERIOD” $350,000 $375,000 NET WORKING OPERATING FIXED NET PROFIT CAPITAL MVT CASH FLOW CAPITAL MVT CASHFLOW $150,000 -$140,000 $10,000 -$25,000 -$15,000 DEBT DEBT $175,000 $190,000 KEY TOP LEVEL MEASURE RETURN ON CAPITAL 24.8% EQUITY EQUITY $265,000 $415,000 © Copyright One Sherpa Pty Ltd 2008
  47. 47. High level review EXAMPLE COMPANY RETURN ON SALES 8.6% RETURN ON CAPITAL 24.8% © Copyright One Sherpa Pty Ltd 2008
  48. 48. The Financial Fence® Primary measure •Which measure sounds best? 8.6% or 24.8% © Copyright One Sherpa Pty Ltd 2008
  49. 49. The Financial Fence® Primary measure •Which measure encourages the business owner to keep going? •Which measure helps the business owner appreciate the real value of what he’s doing? © Copyright One Sherpa Pty Ltd 2008
  50. 50. The Financial Fence® Primary measure RETURN ON Return Capital CAPITAL BECAUSE WORKING OFTEN IT’S BIGGER NET CAPITAL PROFIT FIXED CAPITAL BUT also a far more powerful measure for the business © Copyright One Sherpa Pty Ltd 2008
  51. 51. Today we can only touch the tip of the iceberg Today’s presentation The depth of our business © Copyright One Sherpa Pty Ltd 2008
  52. 52. What is a Business Sherpa? • In the dictionary a Sherpa has been described as: “an expert chosen by a chief executive to assist in preparations for a summit meeting.” © Copyright One Sherpa Pty Ltd 2008
  53. 53. What is a Business Sherpa? A key quality of a Sherpa is a primary concern with getting the person they are guiding to the top of the mountain Our Business Sherpas have already been up the “business mountain” Our Business Sherpas have the skills and experience to guide you to the pinnacle of business success © Copyright One Sherpa Pty Ltd 2008
  54. 54. The most famous Sherpa • The most famous Sherpa is Tenzing Norgay who climbed Mount Everest with Edmund Hillary for the first time in 1953. • Tenzing and Hillary were the first people to conclusively set their feet on the summit of Mount Everest. • Tenzing stressed the unity required for climbing teams but disclosed that Hillary was the first to put his foot on the summit. • He concluded: quot;If it is a shame to be the second man on Mount Everest, then I will have to live with this shame.quot; © Copyright One Sherpa Pty Ltd 2008
  55. 55. The value of walking with a Sherpa “Going alone is a lonely way to go” Many business leaders have neither the knowledge nor the specific skills to optimise the performance of their business © Copyright One Sherpa Pty Ltd 2008
  56. 56. The value of walking with a Sherpa “Going alone is a lonely way to go” Engaging the assistance of a Business Sherpa will assist you move your business to its ultimate performance © Copyright One Sherpa Pty Ltd 2008
  57. 57. The value of walking with a Sherpa “Going alone is a lonely way to go” It is virtually impossible to reach the pinnacle of success if you try and take the entire journey alone © Copyright One Sherpa Pty Ltd 2008
  58. 58. Time to go to base camp © Copyright One Sherpa Pty Ltd 2008
  59. 59. How to get started • The most effective way we have found is by taking the ‘live’ information from a business and ‘putting it on the fence’ • This allows you to see first hand how it gives a completely different perspective on your business and its performance • Until you take this step, your journey is educational but theoretical. • Until you see your own information on the fence it is impossible to have a business experience with the fence. © Copyright One Sherpa Pty Ltd 2008
  60. 60. The Advantages To You…… • Understand the financial outcome of interacting with your customers A D V • Make sure you get your fair ‘share of the A N pie’ by not being squeezed by both T customers and suppliers A G E • Reduce your business risk as a result of S improved decision making • Maximize the cash in your pocket • Allows you to spend less time working in your business © Copyright One Sherpa Pty Ltd 2008
  61. 61. Some Typical Real Benefits …… • Peace of mind that your business is a great investment • More discretionary time to spend with your family / friends / personal interests • Having the freedom to make decisions and not feel squeezed by everyone • Don’t feel like you’re always the last in line to get paid • Having the freedom to do the enjoyable parts of your business © Copyright One Sherpa Pty Ltd 2008
  62. 62. • The first step for you is The Business Financial Fluoroscope Report • The Business Financial Fluoroscope Report is an in-depth look at the financial dynamics of your business, using The Financial Fence® • The Report allows you to see what’s really going on inside your business and identifies areas for improvement. © Copyright One Sherpa Pty Ltd 2008
  63. 63. Results from a Fluoroscope • Executive summary • Forecast • Commentary and explanation of all the indicators used in the analysis • Recommendations • Personal consultation to explain the results © Copyright One Sherpa Pty Ltd 2008
  64. 64. Start with a Do you know YOUR FLUOROSCOPE FUTURE? Do you have a plan? © Copyright One Sherpa Pty Ltd 2008
  65. 65. The Financial Fence® a nd OW DAY e N TO tu r n e Fu do ss E ine OP us SC r B RO ou UO n Y FL s t i ur ve yo In T GE © Copyright One Sherpa Pty Ltd 2008
  66. 66. © Copyright One Sherpa Pty Ltd 2008
  67. 67. Contact us Email: service@onesherpa.com www.thefinancialfence.com www.onesherpa.com© Copyright One Sherpa Pty Ltd 2008

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