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Title:
BUSINESS ADVISORY TOOL
Document Type and Number:
WIPO Patent Application WO/2018/148798
Kind Code:
A2
Inventors:
STEVENS, Graeme John (C/- Level 32, 239 George StreetBrisbane, Queensland 4000, 4000, AU)
Application Number:
AU2018/050122
Publication Date:
August 23, 2018
Filing Date:
February 15, 2018
Export Citation:
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Assignee:
NEXTEP BUSINESS BUILDER COMMUNITY PTY LTD (C/- Level 32, 239 George StreetBrisbane, Queensland 4000, 4000, AU)
International Classes:
G06Q90/00
Attorney, Agent or Firm:
SPRUSON & FERGUSON (GPO Box 3898, Sydney, NSW 2001, 4000, AU)
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Claims:
The claims defining the invention are as follows:

1. A business advisory tool for reporting a best business improvement action to a business, the tool including:

a measurer for measuring financial metrics from accounting records of the business against financial benchmarks for an industry related to the business;

an identifier for identifying and ranking financial metrics of the business using the measuring; and

an advisor for advising the best business improvement action using an identified worst ranked financial metric.

2. A business advisory tool as claimed in claim 1 , wherein the tool advises on the best business improvement action in a low cost manner, on demand, without the need for an accountant, and/or using the financial benchmarks.

3. A business advisory tool as claimed in claim 1 , wherein the advisor further advises on prioritized activities associated with the best business improvement action.

4. A business advisory tool as claimed in claim 3, wherein the advisor reports guidance material on how to undertake the action.

5. A business advisory tool as claimed in claim 1 , wherein the tool further includes a dashboard for graphically presenting information relating to potential gains from the action or actual gains from the result of previous actions.

6. A business advisory method for reporting a best business improvement action to a business, the method including the computational steps of:

measuring financial metrics from accounting records of the business against financial benchmarks for an industry related to the business;

identifying and ranking financial metrics of the business using the measuring; and advising the best business improvement action using an identified worst ranked financial metric.

7. A business advisory method as claimed in claim 6, further involving sorting the financial metrics into vital signs groups based upon their role in the business.

8. A business advisory method as claimed in claim 7, further involving ranking the metrics within each vital signs group.

9. A business advisory method as claimed in claim 8, wherein the step of ranking the metrics involves multiplying the relative importance of each metric by a weighting.

10. A business advisory method as claimed in claim 8, further involve ranking each vital signs group based upon the aggregation of its metrics.

1 1 . A business advisory method as claimed in claim 6, wherein the step of advising involves reporting the best current action within a selected vital signs group.

12. A business advisory method as claimed in claim 6, further involving the benchmarks being global.

13. A business advisory method as claimed in claim 6, further involving the benchmarks being country specific.

14. A business advisory method as claimed in claim 7,wherein the vital signs groups are based upon their role in business viability, business profitability, business growth and business productivity.

15. A business advisory method as claimed in claim 6, wherein the step of advising involves reporting guidance material on how to undertake the action.

16. A business advisory method as claimed in claim 6, further involving the step of receiving confirmation of the action.

17. A business advisory method as claimed in claim 6, further involving the step of reporting the next best current action using the next worst ranked metric.

18. A business advisory method as claimed in claim 6, further involving presenting information relating to potential gains from the action.

19. A business advisory method as claimed in claim 6, further involving presenting information relating to actual gains from the result of previous actions.

20. A business advisory method as claimed in claim 6, further involving presenting information graphically for ease of comprehension enabling tracking of actual gains over time from the result of previous actions, and/or potential improvement from the action compared to a global target and industry best practice.

Description:
BUSINESS ADVISORY TOOL

TECHNICAL FIELD

[0001] The present invention relates to a business advisory tool. BACKGROUND

[0002] The reference to any prior art in this specification is not, and should not be taken as an acknowledgement or any form of suggestion that the prior art forms part of the common general knowledge.

[0003] Business operators often do not understand financial reports. Accordingly, businesses often rely upon their accountants for financial advice. In practice, however, many small businesses simply cannot afford regular and detailed financial advice from their account. In any event, accountants are often prone to give advice which is anecdotal in nature rather than based on hard facts.

[0004] The applicant has perceived a need for a business advisory tool to replace or supplement advice from accountants.

SUMMARY OF THE INVENTION

[0005] According to one aspect of the present invention, there is provided a business advisory tool for reporting a best business improvement action to a business, the tool including:

a measurer for measuring financial metrics from accounting records of the business against financial benchmarks for an industry related to the business;

an identifier for identifying and ranking financial metrics of the business using the measuring; and

an advisor for advising the best business improvement action using an identified worst ranked financial metric.

[0006] Advantageously, the tool may advise on the best business improvement action in a low cost manner, on demand, without the need for an accountant and using the financial metrics and industry financial benchmarks. [0007] The advisor may further advise on prioritized activities associated with the best business improvement action. The advisor may reporting guidance material on how to undertake the action. The tool may further include a dashboard for graphically presenting information relating to potential gains from the action or actual gains from the result of previous actions.

[0008] According to another aspect of the present invention, there is provided a business advisory method for reporting a best business improvement action to a business, the method including the computational steps of:

measuring financial metrics from accounting records of the business against financial benchmarks for an industry related to the business;

identifying and ranking financial metrics of the business using the measuring; and advising the best business improvement action using an identified worst ranked financial metric.

[0009] The method may involve sorting the financial metrics into vital signs groups based upon their role in the business. The method may further involve ranking the metrics within each vital signs group. The step of ranking the metrics may involve multiplying the relative importance of each metric by a weighting. The method may further involve ranking each vital signs group based upon the aggregation of its metrics. The step of advising may involve reporting the best current action within a selected vital signs group.

[00010] The benchmarks may be global or country specific.

[00011] The vital signs groups may be based upon their role in business viability, business profitability, business growth and business productivity. The step of advising may involve reporting guidance material on how to undertake the action.

[00012] The method may further involve the step of receiving confirmation of the action. The method may further involve the step of reporting the next best current action using the next worst ranked metric. The method may further involve the step of presenting information relating to potential gains from the action or actual gains from the result of previous actions. [00013] Any of the features described herein can be combined in any combination with any one or more of the other features described herein within the scope of the invention.

BRIEF DESCRIPTION OF THE DRAWINGS

[00014] Preferred features, embodiments and variations of the invention may be discerned from the following Detailed Description which provides sufficient information for those skilled in the art to perform the invention. The Detailed Description is not to be regarded as limiting the scope of the preceding Summary of the Invention in any way. The Detailed Description will make reference to a number of drawings as follows:

[00015] Figure 1 shows a webpage enabling subscription to an appropriate plan;

[00016] Figure 2 shows a webpage for receiving customised business information;

[00017] Figure 3 shows a webpage for selecting an accounting platform;

[00018] Figure 4 shows a download status for financial data from the accounting program of figure 3;

[00019] Figure 5 shows the top level steps of a business advisory method in accordance with an embodiment of the present invention;

[00020] Figure 6 shows steps performed by a calculations module in determining a best business improvement action;

[00021] Figure 7 shows example generated financial metrics;

[00022] Figure 8 shows some example financial metrics used for benchmarking;

[00023] Figure 9 shows some example vital signs groups;

[00024] Figure 10 shows matched financial metrics and industry financial

benchmarks; [00025] Figure 1 1 shows that application of a weighting to each financial metric to reflect relative importance;

[00026] Figure 12 shows producing a ratio for each metric in each vital signs group;

[00027] Figure 13 shows an example of business performance relative to the benchmark for each vital sign group;

[00028] Figure 14 shows assignment of a prioritized sequence of actions to metrics for improving the business toward a target;

[00029] Figure 15 shows the steps performed by a project module providing project management functions for managing actions and their related activities;

[00030] Figure 16 is a webpage showing the reported best action to do right now and an associated activity;

[00031] Figure 17 is a reporting webpage displaying how-to advice to assist in achieving the goals of the current best activity;

[00032] Figure 18 is a reporting webpage displaying step-by-step guidance on how to undertake the action upon selection of how-to advice from figure 17;

[00033] Figures 19 and 20 show a dashboard webpage graphically display various actual or potential business improvements; and

[00034] Figure 21 shows example potential business gains reported to a user.

DETAILED DESCRIPTION OF PREFERRED EMBODIMENTS

[00035] According to an embodiment of the present invention, there is provided a business advisory method for reporting a best business improvement action to a small business. The method includes the various computational steps explained in detail below. The method is performed using a business advisory website (i.e. electronic tool) hosted on a web server. The website functionality is described in detail below with reference to how Wendy, the owner of a hairdressing salon, uses the software to report the single best business improvement action to do, right now. Guidance is also reported which results in additional profits.

[00036] Turning to figure 1 , the business advisory website 100 initially enables Wendy to subscribe to an appropriate plan 102, 104, 106.

[00037] Turning to figure 2, the website 100 receives customised information from Wendy about her business including industry group, business size, duration of business etc.

[00038] Turning to figure 3, the website 100 receives Wendy's selection of the accounting platform used for her business as well as authorisation to access her accounting records.

[00039] Turning to figure 4, the website 100 periodically (e.g. monthly) receives relevant financial data from Wendy's accounting records.

[00040] Figure 5 shows the repeating steps 500 - 510 in reporting the best business improvement action to Wendy. Each step will now be described in detail.

[00041] At step 500, the website 100 measures Wendy's business performance against the best practice for her industry. As can best be seen in the automated calculations module of figure 6, the business advisory method involves generating financial metrics at step 600 using the received accounting records of Wendy's business from the accounting platform via the API 602. Figure 7 shows typical financial metrics which are calculated.

[00042] At step 604, industry financial benchmarks are generated for the hairdressing industry related to Wendy's business. Figure 8 shows some typical financial metrics used for benchmarking. The benchmarks can be global, or country specific as determined in accordance with the criteria in Appendix I .

[00043] In some instances industry best practice is not available, and so averages are used instead. These cases can account for approximately one third of the metrics used. In these cases, data is extrapolated to apply a best value, by: 1 . Creating multiples values for all the cases where there are both average and best

2. Applying those multiples to similar industries, in a specific revenue range.

[00044] A target value is provided for subscribers to aspire to when comparing the financial metrics with the financial benchmarks at step 606 and the results are reported to charts in a dashboard 608. Potential gains to the business are calculated using the difference between the financial metrics and the benchmarks. The gains relate to the potential in reducing working capital, net profitability and net profit growth. The target is 80% of best practice. With regard to target global industry metrics:

1. They indicate a potential of what is possible in that business, in that revenue group.

2. They indicate an opportunity to save time - get 80% of the result in only 20% of the time.

[00045] At step 502, the website 100 identifies and ranks the financial performance of the business. At step 610, the website sorts the compared metrics into vital signs groups based upon their role in Wendy's business. As shown in figure 9, the vital signs groups may relate to: (1 ) cash flow all viability or survival; (2) profitability; (3) growth; and (4) productivity.

[00046] Furthermore at step 606, the website 100 matches the generated financial metrics from step 600 with the industry financial benchmarks from step 604 as shown in figure 10.

[00047] For each vital signs group, a weighting is applied to each financial metric to reflect relative importance as shown in figure 1 1. The weightings are multiplied by respective financial metrics and the resultants are summed or aggregated together for each vital sign group. Each vital sign sum is then calculated as a percentage of the financial benchmark for the vital sign group to produce a ratio as shown in figure 12. In this manner, the metrics within each vital signs group is ranked and each vital signs groups is also ranked based upon the aggregation of its metrics.

[00048] The dashboard 608 also reports Wendy's performance relative to the benchmark for each vital sign group as shown in figure 13. [00049] At step 612, the website 100 sequentially calculates key metrics from the lowest vital signs group. Each key metric is assigned a prioritized sequence of actions to improve the business toward a target as shown in figure 14.

[00050] At step 504, the website 100 advises on potential savings and potential increased income, as well as reporting the best business improvement action. The project module 614 provides project management functions for managing actions and their related activities. As shown in figure 15 at step 1500, the project module firstly checks whether the metrics are at or below a breakeven point. If so, the project module determines a set of actions to make the metrics viable again. The website 100 presents Wendy with the option to put a current action on bypass and change to a recommended breakeven action or continue with a current action until it is completed before the breakeven action is presented.

[00051] At step 1502, the project module determines the best business improvement action using a worst ranked metric in the lowest ranked vital sign group and allocates an associated top activity at step 1504. Each action is typically divided into a series of prioritized activities. The website 100 identifies the action project at step 1506 along with the associated activities at step 1508 and then checks that the action project is ready for implementation at step 1510. Once ready when all the data and metrics are available, the breakeven has been evaluated and Wendy confirms the action, the action is put into effect at step 1512 by reporting the best business improvement action to the dashboard and providing associated guidance to Wendy upon her selection. Figure 16 shows the reported best action 1600 for Wendy to do right now and an associated activity 1602.

[00052] At step 506, the website 100 sets a target for improvement based upon a percentage (e.g. 80%) of global best practice for Wendy industry.

[00053] At step 508, the website 100 reports practical how-to advice to Wendy to assist her in achieving the goals of the current best activity 1602 within a selected vital signs group as shown in figure 17. Any how-to advice can be expanded to provide step- by-step guidance on how to undertake the action as shown in figure 18.

[00054] At step 510, the website dashboard enables Wendy to track actual gains over time from the result of previous actions and shows potential improvement from the action compared to a global target and best practice for her industry. As can be seen in figures 19 and 20, the dashboard graphically presents information for ease of comprehension. Importantly, the website 100 also highlights potential gains available to Wendy as shown in figure 21.

[00055] Advantageously, the method reports the best business improvement action in a low cost manner, on demand, without the need for an accountant and using the financial metrics and industry financial benchmarks.

[00056] The method previously proceeds to step 500 once more so that the website 100 can further report the next best current action using the next worst ranked metric.

[00057] A person skilled in the art will appreciate that many embodiments and variations can be made without departing from the ambit of the present invention.

[00058] In compliance with the statute, the invention has been described in language more or less specific to structural or methodical features. It is to be understood that the invention is not limited to specific features shown or described since the means herein described comprises preferred forms of putting the invention into effect. The invention is, therefore, claimed in any of its forms or modifications within the proper scope of the appended claims appropriately interpreted by those skilled in the art.

[00059] Reference throughout this specification to 'one embodiment' or 'an

embodiment' means that a particular feature, structure, or characteristic described in connection with the embodiment is included in at least one embodiment of the present invention. Thus, the appearance of the phrases 'in one embodiment' or 'in an embodiment' in various places throughout this specification are not necessarily all referring to the same embodiment. Furthermore, the particular features, structures, or characteristics may be combined in any suitable manner in one or more combinations. f ^N VlK 1 - Benchmarking . A method for preparing a master table of global financial metrics by industry, comprising:

For each selected country, preparing a table of financial metrics comprising:

0 Extracting from online databases by industry and revenue group:

§ financial metric ratios

§ financial reporting element values ;

0 Adding these records to the country table;

0 Removing records with revenue ranges above small business definitions;

o Adding ISIC (International Standard Industrial Classification) code value for each

country industry code;

o Consolidatina country RevenueGroup ranaes into 5 aroups - micro, small, medium,

large, very large;

o Identifying use-ready metrics ratios;

o Normalising values for financial elements from the country data sets;

o Calculating additional financial metric ratios from financial elements provided;

Preparing a master table of financial metric ratios, comprising:

o Consolidating country financial metrics tables into one table;

o Removing records that do not contain financial metrics;

o Defining Metric Type as either:

§ More - a higher value ratio signifies an improvement in business performance

§ Less - a lower value ratio signifies an improvement in business performance

Preparing Average, Best Practice and Target values for each financial metric, comprising:

o Records with top quartile values:

§ Allocating average ratio value to BMAverage

§ Allocating top quartile ratio value to BMHigh (Best Practice)

§ Calculating and allocating to BMHi80 (Target)

Metric Type = More: (top quartile ratio value) x 0.8

Metric Type = Less: (top quartile ratio value) x 1.2

records.