We’re not from the government but we ARE here to help!

The Fremont Group is a non-profit organization with the mission to support small business owners.  Persons who are familiar with SCORE, an agency established by the SBA to do much the same, is therefore familiar with us—with one difference.  The Fremont Group can stay with you and provide much more intensive assistance than SCORE.  To meet us, try a customize webinar.  Contact us and together we will pick an issue.  The issue could range from sales and marketing, to operations, to employee productivity, to cash flow forecasting, to creating and using your budget.  Then we will develop a webinar customized for you to address this issue.  Like what you hear and we can come in for a day and do a Business Assessment creating an Action Plan to take you to your next level.  Best of all—the webinar is free!  We want to help you—let us!  Give us a call at 303 338  9300 today to talk about it—talk is cheap!

2011 Survey–72% of Small Business Owners Lack Financial Controls

The Fremont Group conducts an annual survey of small business owners.  There will be additional posts on other aspects of the survey.  With January posts devoted to financial control of your company we will start releasing results in that area.  SEVENTY-TWO PERCENT OF ALL RESPONDANTS INDICATED THAT THEY NEITHER HAD A BUDGET NOR PROJECTED THEIR CASH FLOW!

  • No regularly produced job costing or tracking reports
  • No regular use of a budget
  • Variance analysis reports are not regularly generated

Is there really any wonder why so many small businesses fail?  Ironically not a single member of The Fremont Group gave any of these responses.

Do you have Financial Control of your company?

Our previous two posts related the need for your two critical financial tools—your budget and your cash flow forecast.  Absent either you do not have financial control of your company, however even with them all you have are the tools.  A red letter rule of our work is that people dependent businesses fail; systems dependent business thrive.  Financial control must be achieved through systems, procedures and controls.  Your budget defines what you can afford; your cash flow forecast when you can afford it.  The entire concept of “what and when you can afford” something can be summed up in a story we tell during our workshops.

A homeless man and a suburban housewife were approaching a Starbucks.  The homeless man had a dollar bill, three quarters and a dime in his pocket.  He looked at the four-dollar coffee and said to himself, “I really want that coffee but I don’t need it.”  He went on without going inside.  The suburban housewife had plenty of money in her checking account and debit card in hand.  She looked at the four-dollar coffee and said to herself, “I really need that cup of coffee.”

The moral of the story—the difference between a want and a need is the balance of your checkbook.

Business owners without real financial control claim to have control by “only buying what we need.”  As you can see, what you need is controlled by the balance of your checkbook.  A large payment comes in from a client and suddenly many of the things that you previously only wanted are now needs.  Cash can never accumulate because your “needs” expand.  Your budget is your financial plan designed to produce a desirable, predetermined result.  This tool is a continuous work in progress.  A system needs to be implemented where each week your Key Variables are tracked against your budget.  Customized to the size and abilities of your staff, this task is delegated to a person who is held accountable for that result.  Your responsibility as owner is the enforcement of that system.  The manager must be trained, given the information that they need to compile the report, and delegated the authority to control the result.

The cash flow forecast monitors the blood in your veins.  Each week the report must be compiled and delivered to you for your review and identification of the adjustments required to maintain a positive result.  Some sense of urgency regarding sales, collections and expenditures can then be delegated with oversight.  Real financial control of your company is achieved through the implementation of systems, procedures and controls that use your two financial tools.  The Success Partners of The Fremont Group work with their clients to develop and implement these customized systems.  Give us a call.

To find out more about Financial Controls log in (first register if you have not—it is free) and do a search for “financial controls”, “cash flow” or “budget.”  You will find numerous other posts on these topics.  During the Annual Physical that we provide our members, with an analysis of the financial control system and an Action Plan for their development.  MEMBERSHIP BENEFITS

How do you project your cash flow?

Each day we are asking a new business owner, “Do you know how much cash you will have in the bank on this Friday?  Next Friday?  Each Friday for the next six weeks?”  Owners can almost never give an answer.  Cash is the lifeblood of your company.  Intelligent decisions require information and the two most important financial documents in your business are your budget and your cash flow.  Your budget tells you what you can afford; your cash flow tells you when you can afford it.  Most owners don’t really know what they can afford or when; they are forced to guess or run their business by “gut feel.”  Fortunately most owners have a pretty good “gut feel” due to having been there for years and working long hours.  Unfortunately this method creates a situation where they can never leave.  I have had owners tell me that it would take 15 years before someone could take their place—about then I remind them that you can become a brain surgeon in eight years and that running this business is not twice as tough as brain surgery!  In a way though they are right—it would be next to impossible for someone else to learn how to run the business the way that they are running it.

Your budget is a financial plan that produces a predetermined, desirable result.  Your cash flow forecast is your pulse.  You need a pulse to stay alive and you need to stay alive to accomplish your desired result. You must be able to make business decisions based upon profit rather than upon cash flow and to do so requires the use of these two tools.  If you don’t have them—call us now!

The Fremont Group has developed a simple, six-week cash flow forecasting tool and makes it available to all small business owners.  We provide it during our Annual Business Physical or if you send us an email we will send it over to you.  It requires ten minutes of work each week to develop a full, one-page report of your projected cash balances for the next six weeks.  The real benefit of this is your ability to make proactive adjustments in your activities so that you remain in a positive cash position.

To find out more about cash flow forecasting, log in (first register if you have not—it is free) and do a search for “cash flow” or “budget.”  You will find numerous other posts on these topics.

How do you use your Budget?

Colonel Savage, upon observing the workers of the Union Pacific RR in 1868, “Verily, men earn their money like horses and spend it like asses.”

What you can afford and when you can afford it

One of the first questions that we ask a business owner is, “How do you use your budget?”   This is usually met with a blank stare and some temporizing questions like, “what do you mean?”  The fact is that most owners of small businesses simply do not have a meaningful, effective budget.  They really cannot  tell me what they can afford or when they can afford it. A Company’s budget establishes what they can afford—their cash flow establishes when they will be able to afford it. The budget is merely the company’s financial plan to obtain their desired result. It is obviously central to a company’s success and a basic business tool yet the owner does not even have one. The budget is the financial model that the business must achieve in order to get your results.

A “budget” is a financial plan designed to produce a pre-determined result. It is the owner’s most important management tool.

Example:

Sales                                                              100%

COGS

Materials                                                      30%

Labor                                                          30%

Other                                                          10%

Total COGS                                                      70%

Gross Profit                                                      30%

Overhead                                                         20%

Net Profit                                                          10%

Note that it is critical that the budget be in percentages and not dollars. Only the Federal Government can budget dollars because they are not restricted to what comes in—you are. Your job is to hit two numbers—the 70% Gross Profit and the 20% Overhead. If these two numbers hit, you will hit your profit.

What needs to be done beyond the general percentages is to tie down those numbers, create systems for the constant revision of those numbers and create focus throughout the entire organization on hitting those numbers.

Since the owner’s job is to hit two numbers–gross profit and overhead.  If you hit those two numbers you win the game–and yet many owners don’t understand that significance.  Once that is understood we add the assumption that the owner is not perfect—that he will not hit those two numbers. Therefore we create a Profit Plan for the business assuming that he will only do half of his job. The company develops a budget for, in this case, 5% of sales and pre-determines how that will be spent on new assets, retirement of debt, retention of cash and taxes. This way the business knows what they are doing in these categories over then next twelve months and they can be relatively certain of achieving it since it is based only on half of the profit that they should be doing. If the owner does his job and produces the 10% profit that he should, then he is entitled to that difference as his bonus. In taking it he does not compromise the company as their needs have been accounted for in the first 5%.  This is how a neopreneur business owner makes his money. You receive a salary for working in the company but your real money comes from doing your job—hitting those two numbers.  You can do whatever you like with that money—you have already covered your cost of production, your overhead and have fully funded your Profit Plan.

To make your job easier, we delegate the responsibilities for hitting the numbers that are in this budget—fractionalization.  We can have a production person responsible for production labor, a purchaser responsible for material costs, and an administration person responsible for overhead (although we generally have to take administrative—or at least owner’s compensation—out of the delegated overhead number).  If the person who is responsible for holding the direct labor to 30% is able to do his job better and holds it to 28%, he has produced an additional 2% profit. This is beyond the budgeted profit and becomes the basis for an incentive. One-half percent is paid to the person who produced it; one-half percent to the owner for managing him so effectively and one percent is paid to the company for additional assets, debt retirement, cash retention and taxes. This formula is carried through to the other key profit variables.

In this example, the amount of the profit plan, when divided by .05 gives you the company’s required sales for break even. Not even a sales plan can be developed without a budget.

In our Annual Physical we break down your financial statements and create a budget.  We have software available to our members to utilize those numbers against their financials and we work with our clients to keep them on track.  To find out more about budgeting, log in (first register if you have not) and do a search for “budget.”  You will find numerous other posts on this topic.

Managerial Accounting

Men and women with a limited understanding of accounting started most businesses. Their bookkeeper compiles information for their accountant but the owner knows that the tax return that their CPA prepares is not a true indication of how their business runs. Their accounting produces nothing that they can really use so they ignore it. They become frustrated because they don’t know what they can afford nor when they can afford it. They compensate by tracking some areas—usually sales and relying upon their “gut feel.” The good news is that the more experienced the business owner is, the more likely that his “gut feel” will be correct. The bad news is that the business easily outgrows this method and it is impossible either to delegate this management style or to transition this style to an heir or successor. Sooner or later the small mistakes become big dollars. The owner becomes overworked and less effective. They can’t get away and they can’t get out. They are trapped. They have been set up for failure.

With my clients I often use this analogy. “Look out of the window. Imagine that you see a young child crossing the street. A speeding car approaches and hits the child—a terrible, terrible tragedy. After you observe this event you sit down and write three letters describing the tragedy. The first letter is to your best friend. The second is to your young child and the last is to your lawyer. Each of the letters is truthful but imagine how each will be different. These letters are the same as your accounting needs.” The only “letter” that the owner currently produces is a letter that the bookkeeper has written to the CPA for the purpose of taxes. This is a very important letter but it does not provide the owner with what he needs to run the business. Most owners recognize this deficiency but simply just don’t know what to do about it. They are getting the wrong letter. Imagine how baffled the young child would be if he received the letter written to the lawyer.

All information produced by a company must meet four criteria: it must be timely, accurate, usable and produced at a minimum cost. Timely means that it must be delivered at a point in that acting upon the information can make a difference. If a football coach covers the scoreboard during the game and then waits until Tuesday to read the paper to find out if he has won or lost, he has not received timely information. As absurd as that sounds, that is exactly how many business owners operate. The term accurate is often misunderstood. In our context accurate means as accurate as is necessary for the purpose of the report. Accountants and bookkeepers put a very high standard upon accuracy that is good—especially for tax purposes, however, all reports do not require that same degree of accuracy. Accountants and software completely overlook the “usable” criteria. Business owners rarely have the same level of sophistication regarding accounting as their CPA and therefore the format of the reports needs to be adjusted. This is particularly true as the reports filter down through the organization. If it is not understood, it is of no value. Lastly the information must be produced at a minimum cost. There is a cost to the production of all information and it is senseless to spend $500 to create a report that generates $100 of profit.

Historical vs Projected

Information provided by your accountant is historical information. Anything that has to be prepared and reviewed in-house, then shipped to the accountant, reviewed and compiled there and then shipped back to the owner has to be historical. Historical information does have its’ place. In looking for trends, identifying where the company has been and in preparing forecasts, historical information can be very useful. However, the value of historical information diminishes in businesses with rapid change. Small businesses can double their sales in a year. They can move into new locations with completely different overhead structures. They can quickly move to different products and customers. In such an environment, historical information becomes just slightly more than an academic pursuit.

The only thing that is really relevant to the business owner is how the company stands in relation to their plan. But most owners don’t even have a plan! Most owners are so sucked into the daily operations (other people’s jobs) that they fail to do their job. Their first job is to plan. This is a constant process. Man plans and God laughs. The plan is not even intended to work, rather it is intended to create benchmarks against which the company’s performance will be measured. The revision of this plan is a constant process, not an annual event. At least monthly, the owner must review his benchmarks and revise the plan. (Obviously from this plan is generated the operational standards for the organization.) The owner projects revenues and cost of sales—by product or department—and establishes overhead.

Every business can be broken into 4-10 key operational variables. These key variables must be projected and tracked weekly. Why weekly? It is the attainment of these results that determines the profit of the company and that is the reason we are in business. The more that one focuses on the result that they wish to achieve, the more likely they are to achieve that result. There are no lasting religions that have people come to church once a year, or once a month, or once a quarter. A weekly focus is exponentially more likely to deliver your result. The timeliness of the information in this instance is more important than the accuracy. You will have a difficult time convincing you bookkeeper of that because their entire orientation is towards accuracy, however the purpose of these “flash reports” is not their accuracy—it is the focus that they create. If a report indicates that a number is out of the range of the owner’s established benchmark, it then is the responsibility of the proper person to identify why and what is being done to correct it.[1] (As scary as it seems to some owners, there are variables that must be tracked daily! But learn to walk before you run.)

This gives you something to think about this Memorial Day Weekend.


[1] It is important to keep your information needs in the proper perspective. The owner must first create a plan—a vision—and identify what it is that they are trying to achieve. An important part of that plan is the financial plan as discussed herein. Once established, the company’s organizational structure becomes the delivery system of those results. Each job requires a defined result and that result is determined by your plan. Organizational Structure is examined in Part II. Finally the information systems monitor those results. Their purpose is to alert the owner as to whether or not he is performing his plan.

Budgeting for Neopreneurs—the Small Business Owners who comprise the clients of The Fremont Group

Colonel Savage, upon observing the workers of the Union Pacific RR in 1868, “Verily, men earn their money like horses and spend it like asses.”

What you can afford and when you can afford it

The owner cannot really tell me what they can afford or when they can afford it. A Company’s budget establishes what they can afford—their cash flow establishes when they will be able to afford it. The budget is merely the company’s financial plan to obtain their desired result. It is obviously central to a company’s success and a basic business tool yet the owner does not even have one. The budget is the financial model that the business must achieve in order to get your results.

A “budget” is a financial plan designed to produce a pre-determined result. It is the owner’s most important management tool.

Example:

Sales                                                              100%

COGS

Materials                                                      30%

Labor                                                          30%

Other                                                          10%

Total COGS                                                      70%

Gross Profit                                                      30%

Overhead                                                         20%

Net Profit                                                          10%

Note that it is critical that the budget be in percentages and not dollars. Only the Federal Government can budget dollars because they are not restricted to what comes in—you are. Your job is to hit two numbers—the 70% Gross Profit and the 20% Overhead. If these two numbers hit, you will hit your profit.

What consulting can do for you is to tie down those numbers, create systems for the constant revision of those numbers and create focus throughout the entire organization on hitting those numbers.

Since the owner’s job is to hit those two numbers we start with the assumption that the owner is no good—that he will not hit those two numbers. Therefore we create a Profit Plan for the business assuming that he will only do half of his job. The company develops a budget for, in this case, 5% of sales and pre-determines how that will be spent on new assets, retirement of debt, retention of cash and taxes. This way the business knows what they are doing in these categories over then next twelve months and they can be relatively certain of achieving it since it is based only on half of the profit that they should be doing. If the owner does his job and produces the 10% profit that he should, then he is entitled to that difference as his bonus. In taking it he does not compromise the company as their needs have been accounted for in the first 5%.  This is how a neopreneur business owner makes his money. You receive a salary for working in the company but your real money comes from doing your job—hitting those two numbers.  You can do whatever you like with that money—you have already covered your cost of production, your overhead and have fully funded your Profit Plan.

To make your job easier, we delegate the responsibilities for hitting the numbers that are in this budget—fractionalization.  We can have a production person responsible for production labor, a purchaser responsible for material costs, and an administration person responsible for overhead (although we generally have to take administrative—or at least owner’s compensation—out of the delegated overhead number).  If the person who is responsible for holding the direct labor to 30% is able to do his job better and holds it to 28%, he has produced an additional 2% profit. This is beyond the budgeted profit and becomes the basis for an incentive. One-half percent is paid to the person who produced it; one-half percent to the owner for managing him so effectively and one percent is paid to the company for additional assets, debt retirement, cash retention and taxes. This formula is carried through to the other key profit variables.

In this example, the amount of the profit plan, when divided by .05 gives you the company’s required sales for break even. Not even a sales plan can be developed without a budget.

Managerial Accounting

Men and women with a limited understanding of accounting started most businesses. Their bookkeeper compiles information for their accountant but the owner knows that the tax return that their CPA prepares is not a true indication of how their business runs. Their accounting produces nothing that they can really use so they ignore it. They become frustrated because they don’t know what they can afford nor when they can afford it. They compensate by tracking some areas—usually sales and relying upon their “gut feel.” The good news is that the more experienced the business owner is, the more likely that his “gut feel” will be correct. The bad news is that the business easily outgrows this method and it is impossible either to delegate this management style or to transition this style to an heir or successor. Sooner or later the small mistakes become big dollars. The owner becomes overworked and less effective. They can’t get away and they can’t get out. They are trapped. They have been set up for failure.

With my clients I often use this analogy. “Look out of the window. Imagine that you see a young child crossing the street. A speeding car approaches and hits the child—a terrible, terrible tragedy. After you observe this event you sit down and write three letters describing the tragedy. The first letter is to your best friend. The second is to your young child and the last is to your lawyer. Each of the letters is truthful but imagine how each will be different. These letters are the same as your accounting needs.” The only “letter” that the owner currently produces is a letter that the bookkeeper has written to the CPA for the purpose of taxes. This is a very important letter but it does not provide the owner with what he needs to run the business. Most owners recognize this deficiency but simply just don’t know what to do about it. They are getting the wrong letter. Imagine how baffled the young child would be if he received the letter written to the lawyer.

All information produced by a company must meet four criteria: it must be timely, accurate, usable and produced at a minimum cost. Timely means that it must be delivered at a point in that acting upon the information can make a difference. If a football coach covers the scoreboard during the game and then waits until Tuesday to read the paper to find out if he has won or lost, he has not received timely information. As absurd as that sounds, that is exactly how many business owners operate. The term accurate is often misunderstood. In our context accurate means as accurate as is necessary for the purpose of the report. Accountants and bookkeepers put a very high standard upon accuracy that is good—especially for tax purposes, however, all reports do not require that same degree of accuracy. Accountants and software completely overlook the “usable” criteria. Business owners rarely have the same level of sophistication regarding accounting as their CPA and therefore the format of the reports needs to be adjusted. This is particularly true as the reports filter down through the organization. If it is not understood, it is of no value. Lastly the information must be produced at a minimum cost. There is a cost to the production of all information and it is senseless to spend $500 to create a report that generates $100 of profit.

Historical vs Projected

Information provided by your accountant is historical information. Anything that has to be prepared and reviewed in-house, then shipped to the accountant, reviewed and compiled there and then shipped back to the owner has to be historical. Historical information does have its’ place. In looking for trends, identifying where the company has been and in preparing forecasts, historical information can be very useful. However, the value of historical information diminishes in businesses with rapid change. Small businesses can double their sales in a year. They can move into new locations with completely different overhead structures. They can quickly move to different products and customers. In such an environment, historical information becomes just slightly more than an academic pursuit.

The only thing that is really relevant to the business owner is how the company stands in relation to their plan. But most owners don’t even have a plan! Most owners are so sucked into the daily operations (other people’s jobs) that they fail to do their job. Their first job is to plan. This is a constant process. Man plans and God laughs. The plan is not even intended to work, rather it is intended to create benchmarks against which the company’s performance will be measured. The revision of this plan is a constant process, not an annual event. At least monthly, the owner must review his benchmarks and revise the plan. (Obviously from this plan is generated the operational standards for the organization.) The owner projects revenues and cost of sales—by product or department—and establishes overhead.

Every business can be broken into 4-10 key operational variables. These key variables must be projected and tracked weekly. Why weekly? It is the attainment of these results that determines the profit of the company and that is the reason we are in business. The more that one focuses on the result that they wish to achieve, the more likely they are to achieve that result. There are no lasting religions that have people come to church once a year, or once a month, or once a quarter. A weekly focus is exponentially more likely to deliver your result. The timeliness of the information in this instance is more important than the accuracy. You will have a difficult time convincing you bookkeeper of that because their entire orientation is towards accuracy, however the purpose of these “flash reports” is not their accuracy—it is the focus that they create. If a report indicates that a number is out of the range of the owner’s established benchmark, it then is the responsibility of the proper person to identify why and what is being done to correct it.[1] (As scary as it seems to some owners, there are variables that must be tracked daily! But learn to walk before you run.)


[1] It is important to keep your information needs in the proper perspective. The owner must first create a plan—a vision—and identify what it is that they are trying to achieve. An important part of that plan is the financial plan as discussed herein. Once established, the company’s organizational structure becomes the delivery system of those results. Each job requires a defined result and that result is determined by your plan. Organizational Structure is examined in Part II. Finally the information systems monitor those results. Their purpose is to alert the owner as to whether or not he is performing his plan.

Profit as a Residual

The owner determines the amount of profit that they wish to make. The owner needs enough internally generated information to have control of his profit. Most business owners do not even know that they can control their profit. Your accountant has done you no favors. They have beaten into the heads of business owners an accounting format in which profit is treated as a residual. Pull out your financial statements. They are arranged as follows: on the top line is revenues followed by the cost of goods sold. These numbers are subtracted and the result is your gross profit. Then you subtract overhead and what is left over is profit. Right? Wrong. This is tax accounting. This is the basis of the letter written to the CPA for the purposes of paying (or hopefully avoiding) taxes. This is not managerial accounting. If you use your tax accounting to compute your break even you will divide your fixed overhead by your gross profit percentage resulting in the company revenues needed to pay your bills. But we are not in business just to pay our bills. It is the owner’s job to generate a pre-determined profit and the owner’s job to determine how much. If you take what is left over, that is what you will get.

On your financial statement go to the space between gross profit and overhead. Insert the amount of profit that your Strategic Plan shows that you need to make. Now add that to your overhead and divide the result by your gross profit percentage. That is the sales volume required to really “break even.” Now you can develop a sales plan designed to “win the game” and not to merely “lose by a touchdown.” Unfortunately this is so backwards from what most people practice that they never are able to overcome the mistakes ingrained in them by their accountant.

Engineering Profit

Making money is so simple that most people don’t understand it. If you want to make 10% profit, simply spend only 90 cents of every dollar that comes in. Anyone can figure that out. So why do so few people have a plan to do it? In producing a profit there are only two variables. First is the relationship between what you charge (price) and what it actually costs you to produce your product. Second is the relationship between overhead and gross revenues. You want to make money? Establish your plan to determine the required relationship between price and cost (gross profit), identify ALL of the variables that control this relationship, pick out the key ones and monitor the crap out of them. Then take out your desired net profit from the gross profit and establish the amount of overhead that the company can afford. Implement controls so that the overhead cannot exceed that level and you end up with your profit. Simple isn’t it? Unfortunately 99 out of every 100 small business owners spend virtually no time focusing upon making money because they are “too busy” (doing other people’s jobs). It is also overwhelming to them because their accountant and software have provided tools that are inadequate and overly complex. Those really making money are doing it despite these inadequacies and with a lot of luck. Reliance upon luck can be significantly reduced if the proper information is generated and USED.

Sales and Marketing

Small businesses often operate near their breakeven and therefore to become profitable they must either lower their breakeven or increase their sales. The fact is, lowering your breakeven is neither simple nor even advisable. If you are fat anyone can provide a simple answer to your weight problem—don’t eat. I can guarantee you that if you don’t eat you will lose weight. I can also guarantee that if you don’t eat long enough you will die. The real answer to weight problems is the purchase and use of running shoes. Exercise more and your body becomes more efficient—you can eat more and still lose weight. The same goes for your business—most businesses are starving themselves to death. It isn’t less overhead that you need—you probably need more! But obviously you can’t just eat more—you also have to run!

Small business owners are generally very good at sales. The owner understood his product and represented it well. They convert sales quite effectively in large part because the owner is personally involved in the sales process. Sales revenue produced from sales are the result of an easy equation—number of opportunities times the close rate. Since they are good at sales their close rate is high but since they fret over every dollar they rarely invest effectively in the generation of opportunities.

Sales is the conversion of leads into dollars; marketing is the generation of those leads. The unfortunate truth is that businesses with limited funds are reluctant to invest in marketing. Since they rarely have a controlled budget they don’t know what they can afford for marketing. Marketing is not unlike any other expense—it has to fit into your budget, however consider what the effect would be upon your business if you had twice the number of sales opportunities per month! There is nothing that you could do that would have more impact upon your business so long as: (1) your close rate is not reduced; and (2) the cost per lead is monitored and controlled.

At your management retreat ask your sales team to identify your current marketing effort. Identify you current “cost per lead.” This is the real marketing cost to your business. Then challenge them—how can we double the number of leads while maintaining the same close rate? Obviously there would be an increased cost to this effort and there is only 100% of your revenue that you can spend. The next step is to go to finance—how can we re-allocate our budget so that we can accommodate this effort? When it is determined how you are going to afford it you then must go back to sales and establish controls to maintain the close rate and cost per lead.

If you want to really change this year, change your marketing.