Introduction To One Sherpa

THE WAY TO A BETTER FUTURE
© Copyright One Sherpa Pty Ltd 2008

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”.


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.


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.”


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.”


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.


They have visions
and aspirations but
work incredibly hard
for returns that
continually
disappoint them



SO WHY DON’T THEY REACH THEIR VISION?

Why is it so hard to reach your business goals?



There are three
areas we have
identified
that prevent people achieving the
results they desire…….


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

The analogy that holds the journey together

Many business
owners have no
context from
which to make
their decisions


The analogy that holds the journey together

As a result they have
no way to make
clear cut decisions
nor measure the
results


The Financial Fence®
Way of Thinking


“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

• Many people who see The Financial Fence® have thought it is
simply a new technique and way of reporting the numbers.


• It is however a completely different way of thinking about
the numbers which changes the paradigm around how you
and measure its performance.
fund a business


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.

The Standard two rail fence

M M
I I
ACTIVITY
L L
E E
S S
ACTIVITY
T T
O O
N N
E E

THE TWO MILESTONES ON
THE FINANCIAL FENCE ®

Capital Capital

Debt Debt
Funding

Equity Equity

THE THREE ACTIVITIES ON

Infrastructure
Interaction with
Capital Capital
Customers Expenses

Investment in
Business
Debt Debt

Equity Equity

PERFORMANCE MONITORING ON

Infrastructure
Interaction with
Capital Capital
Customers Expenses

Investment in
Business
Debt Debt

Key Performance
Equity Equity
Indicators

SINGLE DIRECTION OF MANY NON
FINANCIAL EXECUTIVES

Infrastructure NET
Interaction with
Customers Expenses PROFIT


DIRECTIONS REQUIRED FOR TRADING

Infrastructure
Interaction with
Capital Capital
Customers Expenses

Investment in
Business
Debt Debt

Key Performance
Equity Equity
Indicators

Costing/
Bank
Pricing
Statement
Documents

Theoretical Actual
Outcome Outcome
Run out of money
BUSINESS FAILURE


The conundrum for the business owner
BALANCE SHEET BALANCE SHEET
“AS AT” “AS AT”

ASSETS ASSETS
SALES

NET
LIABILITIES LIABILITIES
CASHFLOW

EQUITY EQUITY


Contrast To Traditional Business Thinking
TRADITIONAL TRADITIONAL

PROFIT & LOSS ACCOUNT
“FOR THE PERIOD”
ASSETS ASSETS
NET
GROSS
COST
EXPENSES
SALES
PROFIT
MARGIN
OF SALES

LIABILITIES LIABILITIES
NET
CASHFLOW

EQUITY EQUITY


The Financial Fence® Way of Thinking

WORKING WORKING
CAPITAL CAPITAL

INFRASTRUCTURE NET
CONTRIBUTION
COST
SALES EXPENSES PROFIT
MARGIN
OF INTERACTION

FIXED FIXED
CAPITAL CAPITAL
MOVEMENT MOVEMENT
NET OPERATING NET
IN WORKING IN FIXED
PROFIT CASH FLOW CASHFLOW
CAPITAL CAPITAL
DEBT DEBT

EQUITY EQUITY


The Financial Fence® - Example Company

WORKING WORKING
CAPITAL CAPITAL
$90,000 $230,000
INFRASTRUCTURE NET
CONTRIBUTION
SALES COST
EXPENSES PROFIT
MARGIN
OF INTERACTION
$200,000 $150,000
$350,000
$1,750,000 -$1,400,000
FIXED FIXED
CASH FLOW STATEMENT
CAPITAL CAPITAL
$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


WORKING WORKING
CAPITAL CAPITAL
$90,000 $230,000
INFRASTRUCTURE NET
CONTRIBUTION
SALES COST
EXPENSES PROFIT
MARGIN
OF INTERACTION
$200,000 $150,000
$350,000
$1,750,000 -$1,400,000
FIXED FIXED
CASH FLOW STATEMENT
CAPITAL CAPITAL
$350,000 $375,000
$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
$175,000 + $265,000 = $440,000
$265,000 $415,000


WORKING WORKING
CAPITAL CAPITAL
$90,000 $230,000
INFRASTRUCTURE NET
CONTRIBUTION
SALES COST
EXPENSES PROFIT
MARGIN
OF INTERACTION
$200,000 $150,000
$350,000
$1,750,000 -$1,400,000
FIXED FIXED
CASH FLOW STATEMENT
CAPITAL CAPITAL
$350,000 $375,000
$150,000 -$140,000 $10,000 -$25,000 -$15,000
DEBT DEBT
$175,000 Top rail check $190,000

$265,000 + $150,000 = $415,000
EQUITY EQUITY
$265,000 $415,000


WORKING WORKING
CAPITAL CAPITAL
$90,000 $230,000
INFRASTRUCTURE NET
CONTRIBUTION
SALES COST
EXPENSES PROFIT
MARGIN
OF INTERACTION
$200,000 $150,000
$350,000
$1,750,000 -$1,400,000
FIXED FIXED
CASH FLOW STATEMENT
CAPITAL CAPITAL
$350,000 $375,000
$150,000 -$140,000 $10,000 -$25,000 -$15,000
DEBT DEBT
$175,000 Bottom rail check $190,000

$175,000 - - $15,000 = $190,000
EQUITY EQUITY
$265,000 $415,000

PERFORMANCE MEASUREMENT
Let’s look at a couple of our
measurements

RETURN ON SALES


Return on Sales
BALANCE SHEET
Sales Return “AS AT”

WORKING WORKING
CAPITAL CAPITAL

INFRASTRUCTURE NET
CONTRIBUTION
COST
MARGIN
OF INTERACTION

FIXED CASH FLOW STATEMENT FIXED
CAPITAL CAPITAL
MOVEMENT MOVEMENT
NET OPERATING NET
IN WORKING IN FIXED
CAPITAL CAPITAL
DEBT DEBT

DEFINITION
NET PROFIT divided by SALES
EQUITY EQUITY



$150,000/$1,750,000*100=8.6%

INFRASTRUCTURE NET
CONTRIBUTION
SALES COST
EXPENSES PROFIT
MARGIN
OF INTERACTION
$200,000 $150,000
$350,000
$1,750,000 -$1,400,000

ACTIVITY OF BUSINESS
PROFIT TO SALES 8.6%


RETURN ON CAPITAL


The Financial Fence® Primary measure
BALANCE SHEET
Return Capital “AS AT”

WORKING WORKING
CAPITAL CAPITAL

INFRASTRUCTURE NET
CONTRIBUTION
COST
MARGIN
OF INTERACTION

FIXED CASH FLOW STATEMENT FIXED
CAPITAL CAPITAL
MOVEMENT MOVEMENT
NET OPERATING NET
IN WORKING IN FIXED
CAPITAL CAPITAL
DEBT DEBT

DEFINITION
NET PROFIT divided by TOTAL CAPITAL
EQUITY EQUITY


$150,000/($230,000+ $375,000)*100=24.8%

WORKING WORKING
CAPITAL CAPITAL
$90,000 $230,000
INFRASTRUCTURE NET
CONTRIBUTION
SALES COST
EXPENSES PROFIT
MARGIN
OF INTERACTION
$200,000 $150,000
$350,000
$1,750,000 -$1,400,000
FIXED FIXED
CASH FLOW STATEMENT
CAPITAL CAPITAL
$350,000 $375,000
$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

High level review

EXAMPLE
COMPANY
RETURN ON SALES 8.6%
RETURN ON CAPITAL 24.8%


•Which measure sounds best?

8.6%
or
24.8%



•Which measure encourages
the business owner to keep
going?

•Which measure helps the
business owner appreciate the
real value of what he’s doing?



RETURN ON Return Capital
CAPITAL BECAUSE WORKING

OFTEN IT’S BIGGER CAPITAL

NET
PROFIT

FIXED
CAPITAL

BUT also a far more powerful measure
for the business


Today we can only touch the tip of the iceberg

Today’s
presentation

The depth
of our
business


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.”


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

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

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



“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



“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


Time to go to base camp


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.

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

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

• 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.

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


Do you know YOUR
Start with a
FUTURE?
FLUOROSCOPE

Do you have a plan?



nd
a
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


Introduction To One Sherpa

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