Pro Forma Income Statement


Because marketing managers are accountable for the profit impact of their actions, they must translate their strategies and tactics into pro forma, or projected, income statements. A pro forma income statement displays projected revenues, budgeted expenses, and estimated net profit for an organization, product, or service during a specific planning period, usually a year. Pro forma income statements include a sales forecast and a listing of variable and fixed costs that can be programmed or committed.

Pro forma income statements can be prepared in different ways and reflect varying levels of specificity. They have a typical layout consisting of six major categories or line items:

  1. Sales—forecasted unit volume times unit selling price
  2. Cost of goods sold—costs incurred in buying or producing products and services. Generally speaking, these costs are constant per unit within certain volume ranges and vary with total unit volume.
  3. Gross margin (sometimes called gross profit)—represents the remainder after cost of goods sold has been subtracted from sales.
  4. Marketing expenses—generally programmed expenses budgeted to produce sales. Advertising expenses are typically fixed. Sales expenses can be fixed, such as a salesperson’s salary, or variable, such as sales commissions. Freight or delivery expenses are typically constant per unit and vary with total unit volume.
  5. General and administrative expenses—generally, committed fixed costs for the planning period, which cannot be avoided if the organization is to operate. These costs are frequently called overhead.
  6. Net income before (income) taxes (often called net profit before taxes—the remainder after all costs have been subtracted from sales.

A pro forma income statement reflects a marketing manager’s expectations (sales) given criterion inputs (costs). This means that a manager must think specifically about customer response to strategies and tactics and focus attention on the organization’s financial objectives of profitability and growth when preparing a pro forma income statement.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

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Writing a Marketing Plan


  • Use a direct, professional writing style. Use appropriate business and marketing terms without jargon. Present and future tenses with active voice are generally better than past tense and passive voice.
  • Be positive and specific. At the same time, avoid superlatives (such as terrific, wonderful). Specifics are better than glittering generalities. Use numbers for impact, justifying computations and projections with facts or reasonable quantitative assumptions where possible.
  • Use bullet points for succinctness and emphasis. As with the list you are reading, bullets enable key points to be highlighted effectively and with great efficiency.
  • Use “A level” (the first level) and “B level” (the second level headings under major section headings to help readers make easy transitions from one topic to another. This also forces the writer to organize the plan more carefully. Use these headings liberally, at least once every 200 to 300 words.
  • Use visuals where appropriate. Illustrations, graphs, and charts enable large amounts of information to be presented succinctly.
  • Shoot for a plan 15 to 35 pages in length, not including financial projections and appendices. An uncomplicated small business may require only 15 pages, while a new business startup may require more than 35 pages.
  • Use care in layout, design, and presentation. Laser or ink-jet printers give a more professional look than  do dot matrix printers or typewriters. A bound report with a cover and clear title page adds professionalism.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Traditional Manager Vs. Customer-focused Manager


A traditional manager focuses on current goals. Their time and their energy is preoccupied with a series of probably corporate internally focused objectives – whether this is making a sales target, budget, profitability or some other goal, such as market share. On the other hand a customer-focused manager is led and empowered by a vision. A vision based on quality as well as quantity and results. A vision that inherently has a customer satisfaction measure and a vision that creates a feeling of pride and satisfaction in working in that way.

A traditional manager is largely reactive – making decisions, implementing plans based on the input of those above them, around them or in the external environment. ‘If it ain’t broke, don’t fix it,’ would be a common maxim. Today’s manager is largely proactive – ‘If it’s not broken, break it,’ because it’s going to be broken very soon. Today’s manager doesn’t wait for things to need a reason for change; they change things for the sake of it. Whether this is just simply the office layout, the times people take their lunch, company policies, prices, brochures, and markets – everything else has to be a proactive activity today. If you wait for the market to change you will probably always be one step behind. One step behind what the customers need and want and what your competitors are doing.

A traditional manager will often seek, either directly or indirectly, to limit other people’s participation. Typically, meetings between managers are excluded from input from other people, or they don’t involve other people perhaps as much as they should do – this is never seen as necessary. But today it is essential. Today’s manager has to promote involvement; they need opinions, thoughts, ideas, and feedback from all levels within the organization. The best way of achieving this is by one of two methods. The first is one we could loosely name ‘random communication,’ where just by simply creating the environment where people can mix and mingle, communicate, participate and share, ideas can be distributed. The other way is by doing something slightly more formal, by putting in place a series of waterfalls or communication falls where information and participation flows around the organization.

Traditional managers will probably reward people based on their qualifications or long service. A more customer-focused manager will reward and recognize people based on their ability to enhance customers and deliver excellence. For example, it is not uncommon for managers to regularly single out for some form of payment, or just simple recognition, those people in a customer service team who have gone beyond the normal levels and delivered something extraordinary during their job. Whether it was staying late sorting out a customer problem, coming up with an idea which helped the business move forward, making big improvements in their own work – these are the things that managers reward.

Another thing that has to change if you are going to move forward and lead successfully in a customer-focused organization is that you have to let go of solving problem yourself. One very successful manager who ran a very effective customer service team had a big sign on their wall. You can come in here with any problem at all, so long as you have one idea for a solution.

A traditional manager also sees their role as controlling information. They will keep their staff and other people on a ‘need to know’ basis. This is not how it works. Information should be shared, but not broadcast. A good manager will communicate actively and pro-actively to all concerned. He or she will keep them informed of the information they need to deliver the best possible service to the customer. This means the information is timely, relevant and understood.

Managing in today’s environment, with the pressures of working with ever demanding customers, will invariably result in matters of conflict and disagreement. Rather that patching these over, ignoring them, or letting them sort themselves out, as is perhaps more traditionally done by managers, these should now be sought out and moderated to a successful outcome.

A customer-focused manager ‘walks the talk’. He or she must act congruently and with the same values and honesty that they want their staff to deliver to their customers. That means they keep commitments, it means they under promise and over deliver, and they make everyone of their employees feel special and a valuable member of the team. Nobody just does a job and goes home, there is a purpose, a value and a mission.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Learn from Operations of other Organizations


There is nothing wrong with learning from other organizations. You should search each reasonable source for ideas that you can adapt—don’t be afraid or too proud to borrow ideas from anyone. Remember that to copy from one person is plagiarism, to copy from lots of people is research. If you offer a service, you might start by looking at the operations of a highly successful service provider. You can learn a lot by walking around companies and thus see how they have tackled their decisions about location, layout, capacity, product design, process design, performance measures, logistics, stock control, technology used, staffing, pricing, amount of vertical integration, maintenance and replacement, and financing.  When you look for improvements, see how other organizations have solved similar problems, and don’t be afraid to borrow good ideas.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Design Jobs


Job design looks for the best way of doing any particular task. It describes the details of the work to be done, the skills and equipment needed, supervision, interactions with other questions, environment and so on. From the organization’s point of view, the aim of the job design is to make employees productive and efficient. But employees have their own social and psychological needs, and they want to interact with other people, be recognized, appreciated and properly rewarded. So the real aim of job design is to meet the performance goals of the organization, while making the job safe, satisfying and rewarding for the individual. There are elements of job design:

a)      The physical environment is the place where the job is done, its layout, the tools used, equipment available, lighting, temperature, noise, safety features and so on.

b)      The social environment,  which affects the psychological well-being of the people working. A good social environment gives a higher quality of working life, and leads to higher motivation and better performance.

c)      Work methods, which describe the details of how a job is done. Work methods usually break the job into a series of small tasks and analyses each of these. In particular, they ask questions like ‘Why is this task done?’ ‘Could it be done automatically?’ ‘How could the layout of the workplace be improved?’ ‘Would different tools help?’

 When a company (L&M Industries) involved in window frame making, looked at their process, they counted 162 separate steps. Of these, 39 involved walking to fetch materials and tools, and another 18 involved waiting for something to happen. By redesigning the jobs, L&M reduced the amount of movement by 85 percent and cut the time needed to make each frame by 58 percent.

 Such improvements need someone to recognize that changes are needed and then do the planning. This can take time. You have to design jobs properly, so that they satisfy the needs of both the organization and the employee.

 My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight