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WASMER GROUP BUSINESS MODELSThe Wasmer Group has developed Proprietary Business Models that are used to determine the financial position of a client at a given point in time and pinpoint areas of concern. The models are used as a basis for making recommendations for improvements to profitability and shareholder value. These models are also used to help our clients manage their businesses on an ongoing basis. The Wasmer Business Models consist of a product model, service model, staffing model, and a blended model. We have developed numerous other models for specific clients, such as training, software development, software implementation, etc. The Wasmer Business Models enable our clients to manage their businesses from a variable cost approach. Once gross profit is determined, we categorize all expenses into the following types: a) Compensation, which consists of all wages, commissions, and bonuses paid out of the company in addition to all benefits, b) Non-compensation, which consists of all other expenses incurred such as rent, office supplies, insurance, telephone, etc. Even though certain costs are “fixed” in the traditional sense, such as rent, these costs fluctuate with revenue over time. The relationship of these costs to gross profit can be managed and controlled in order to produce a profit. Attempting to move as many costs to a true variable basis is key to remaining profitable with the uncertainties of the business in the coming years. Product ModelWe have developed the product model for a company that would sell 100% hardware, no services. A hardware box mover has to be transaction-oriented, constantly evaluating the short-term opportunities that exist in the market place. Profit lies in the efficiencies of the processes for delivering the product. The infrastructure required is very different from that of a “solution provider” or a service firm. Service ModelThe service model is based on a 100% services firm. A service organization is focused on solutions or services and thus, by definition, is more long-term oriented, with an emphasis on relationships and an understanding of the client’s business. The infrastructure of a service firm needs to facilitate services in all facets of business, from working with clients on strategic and technical solutions, to developing processes designed to extend client services into every internal aspect of the organization. Staffing ModelThe staffing model is very different from the service model in that it represents selling a person into an account on a long-term basis, or staff augmentation. This model assumes that the person will be fully utilized and will not require much, if any, administrative support from the company. Infrastructure needs will be minimal. A staffing organization is focused on finding and selling people and is not in the business of providing training, a career path or employee development. Blended ModelThe blended model is a combination of all business models applicable to a particular client. It is used to compare the results of the combination of the models for the company as a whole. Although, it is not intended to manage separate departments, the individual models should be used for this purpose. By combining each of the models we can easily see, from a 50,000-foot level, where the potential problems are in terms of profitability. From there we will then look at each significant variance to make recommendations for improvement. It is important to constantly evaluate the monthly performance to insure that the firm is on track to maximize profitability based on hitting targeted expense levels based on the models. |
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