|
Simple Small Business
representa a Small Business - G&A includes rent, administrative saleries and overheads - the latter as a random variable.
Cost of Goods Sold includes sales staff saleries and the product costs.
Sales staff are ramped up to six with each person having their own ramp up time to become productive.
The chart below shows the business performance under 'best case' conditions and 'bad case' conditions. In this respect, 'best case' means there is no bad debt, all sales staff are equally productive, and all staff haev a long tenure (on average 4 years),
while 'bad case' means a 3% bad debt rate, all sales staff are not equally productive and the average sales staff tenure is only one year.
Best Case and Bad Case business performance.
The differences are dramatic. What effect contributes most to the performance downturn ?
The chart below shows model variations in which each of the three 'sub optiomal' paramaters is modelled independently.
Individual parameter contributions to performance degradation.
Apparent from the above plot, although not particularly obvious, is that by far the largest contributor to the perfromance degradation is the short average sales staff tenure.
The other two factors, the bad debt and the variation in sales staff productivity cause the same (approximately) average degradation, though the sales staff quality introduces much more variability into the businesses financial performance.
Detailed reports for available for the Best Case and the Bad Case are available. Note these reports are in MHT format - Firefox browsers may need to add the Mozilla Archive Format (MAF) Add-on packagei.
| 
