Byron: Hi, my name is Byron Hebert and this is another quick tool time update brought to you by the Entrepreneur’s Playbook and your friends at PKF Texas. This time of year a good thing to be doing is getting your budgets together for your organization for the upcoming year, getting a sales forecast in place, maybe having a workshop with your key management team to make sure that you’re all on the same page and the company’s moving the right direction. As simple as this seems to be I get a lot of push back from my clients sometimes about putting together budgets and forecasts and the argument is that there’s too many scenarios in play that could affect that budget. So to them I say, “Well let’s put a scenario planning process in place.”

So that’s what I’ve done here. Let’s assume that this company’s very heavily dependent on the price of crude, the success of their company. Maybe they’ve experienced some turnover in their organization in the last several years. So we put that on an axis like this and for each one of these quadrants we think about, “What would our strategy be if either one of these happen?” So let’s assume that our turnover goes down and the price of crude goes up. So we’ve got good people and the price of crude goes up. We want to have a growth strategy. We want to take advantage of that, that we’ve got good people in place and the price of crude has gone up.

So let’s assume over here that our turnover has gone up. We’ve lost some people but the price of crude is going up and we want to take advantage of that. We need to have an H.R. strategy to get people in place, get them assimilated into the organization and get them trained. Down here let’s assume turnover’s gone up but the price of crude has gone down. So here we want to get rid of our waste. We have a waste reduction program in the mine shop tools. We want to go through that program and make sure that we’ve eliminated waste.

Let’s say turnover goes down. We’ve got good people but the price of crude has gone down as well. Again, we want to become efficient. We want to get a waste program in place. We want to become very efficient and maybe technology added so we can become very streamlined in our processes. Again, this is Byron Hebert. This is a quick tool time update brought to you by the Entrepreneur’s Playbook and your friends at PKF Texas.