Introduction To One Sherpa

THE WAY TO A BETTER FUTURE
© Copyright One Sherpa Pty Ltd 2008

THE ONE SHERPA STORY
Business leaders, carrying the load of responsibility for an

organisation’s performance often feel isolated;
and “going alone is a lonely way to go”.

Our Relationship Managers guide you to ‘base camp’, the first step up
the mountain; by assisting you complete an ‘x-ray’ of your business
using our unique proprietary business fluoroscope.

At ‘base camp’ you’ll meet one of our Business Sherpas, who will diagnose
the health of your organisation and determine whether it is ready to make
the climb to the fulfillment of your business vision.
“Your business sherpa will faithfully guide you to a confident future.”

You are then equipped to make an informed choice to engage us in the exhilarating
experience of helping you reach the pinnacle of your business success.
“There is nothing quite like the view from the top.”

How to connect vision with your plan
Many people are looking

to get into business or are
already working in their
business with a vision of
increasing their financial
wealth.
They have visions

and aspirations but
work incredibly hard
for returns that
continually
disappoint them

SO WHY DON’T THEY REACH THEIR VISION?

Why is it so hard to reach your business goals?

There are three

areas we have
identified
that prevent people achieving the
results they desire…….
TRADITIONAL BUSINESS OUR BUSINESS FOCUS

FOCUS
Business Plan Business Model
Sales and Marketing Interaction with Customers
Making Profit Increasing Cash Flow
These three differences means our focus is quite

different and allows us to use our unique tools
to assist business owners get better performance
The analogy that holds the journey together
Many business
owners have no
context from
which to make
their decisions

The analogy that holds the journey together
As a result they have

no way to make
clear cut decisions
nor measure the
results

The Financial Fence®
Way of Thinking

“Some people think if they just implement our techniques
they will be as successful as we are. But those that try often
fail…you have to address employees’ fundamental way of
thinking”
Fujio Cho President Toyota
• Many people who see The Financial Fence® have thought it is
simply a new technique and way of reporting the numbers.

• It is however a completely different way of thinking about
the numbers which changes the paradigm around how you
fund a business and measure its performance.

Why use a fence?
1. Fences are made of two parts :

A. Posts that anchor the fence into the ground
at a point AND
B. Rails that carry the fence over a distance.
2. Fences incorporate Milestones (Posts) and
Activity (Rails) in the same analogy.
3. Financial statements have these two parts :
A. “Milestones” - Balance Sheet.
B. “Activity” – Profit & Loss Account & Cash
Flow Statement.
4. Fences provide a boundary and security.
The Standard two rail fence
M M
I I
L ACTIVITY
L
E E
S ACTIVITY S
T T
O O
N N
E E
THE TWO MILESTONES ON
THE FINANCIAL FENCE ®
Capital Capital
Debt Debt
Funding
Equity Equity
THE THREE ACTIVITIES ON
Interaction with Infrastructure

Capital Capital
Customers Expenses
Investment in
Business
Debt Debt
Equity Equity
PERFORMANCE MONITORING ON

Capital Capital
Customers Expenses
Investment in
Business
Debt Debt
Key Performance
Equity Indicators Equity
SINGLE DIRECTION OF MANY NON
FINANCIAL EXECUTIVES
Interaction with Infrastructure NET

Customers Expenses PROFIT

DIRECTIONS REQUIRED FOR TRADING

Capital Capital
Customers Expenses
Investment in
Business
Debt Debt
Key Performance
Equity Indicators Equity
Costing/
Pricing Bank
Documents Statement
Theoretical Actual
Outcome Outcome
Run out of money
BUSINESS FAILURE

The conundrum for the business owner
BALANCE SHEET BALANCE SHEET
“AS AT” “AS AT”
ASSETS ASSETS
SALES
NET
LIABILITIES CASHFLOW LIABILITIES
EQUITY EQUITY

The conundrum for the business owner
ASSETS ASSETS
SALES
NET
LIABILITIES CASHFLOW LIABILITIES
EQUITY EQUITY

Contrast To Traditional Business Thinking
TRADITIONAL TRADITIONAL
PROFIT & LOSS ACCOUNT

“FOR THE PERIOD”
ASSETS ASSETS
COST GROSS NET
SALES EXPENSES
OF SALES MARGIN PROFIT
LIABILITIES NET
LIABILITIES
CASHFLOW
EQUITY EQUITY


ASSETS ASSETS
COST GROSS NET
SALES EXPENSES
LIABILITIES NET
LIABILITIES
CASHFLOW
EQUITY EQUITY


ASSETS ASSETS
COST GROSS NET
SALES EXPENSES
LIABILITIES NET
LIABILITIES
CASHFLOW
EQUITY EQUITY

The Financial Fence® Way of Thinking
WORKING WORKING
CAPITAL CAPITAL
COST CONTRIBUTION INFRASTRUCTURE NET

SALES EXPENSES PROFIT
OF INTERACTION MARGIN
FIXED FIXED
CAPITAL CAPITAL
MOVEMENT MOVEMENT
NET OPERATING NET
IN WORKING IN FIXED
PROFIT CASH FLOW CASHFLOW
CAPITAL CAPITAL
DEBT DEBT
EQUITY EQUITY

WORKING WORKING
CAPITAL CAPITAL

FIXED FIXED
CAPITAL CAPITAL
MOVEMENT MOVEMENT
NET OPERATING NET
IN WORKING IN FIXED
CAPITAL CAPITAL
DEBT DEBT
EQUITY EQUITY

WORKING WORKING
CAPITAL CAPITAL

FIXED FIXED
CAPITAL CAPITAL
MOVEMENT MOVEMENT
NET OPERATING NET
IN WORKING IN FIXED
CAPITAL CAPITAL
DEBT DEBT
EQUITY EQUITY

The Financial Fence® - Example Company

WORKING PROFIT & LOSS ACCOUNT WORKING
CAPITAL “FOR THE PERIOD” CAPITAL
$90,000 $230,000
SALES COST CONTRIBUTION INFRASTRUCTURE NET
OF INTERACTION MARGIN EXPENSES PROFIT
$1,750,000 -$1,400,000 $350,000 $200,000 $150,000
FIXED FIXED
CASH FLOW STATEMENT
CAPITAL CAPITAL
$350,000 $375,000
NET WORKING OPERATING FIXED NET
PROFIT CAPITAL MVT CASH FLOW CAPITAL MVT CASHFLOW
$150,000 -$140,000 $10,000 -$25,000 -$15,000
DEBT DEBT
$175,000 $190,000
EQUITY EQUITY
$265,000 $415,000

$90,000 $230,000
$1,750,000 -$1,400,000 $350,000 $200,000 $150,000
FIXED FIXED
CASH FLOW STATEMENT
CAPITAL CAPITAL
$350,000 $375,000
$150,000 -$140,000 $10,000 -$25,000 -$15,000
DEBT DEBT
$175,000 $190,000
EQUITY EQUITY
$265,000 $415,000

$90,000 $230,000
$1,750,000 -$1,400,000 $350,000 $200,000 $150,000
FIXED FIXED
CASH FLOW STATEMENT
CAPITAL CAPITAL
$350,000 $375,000
$150,000 -$140,000 $10,000 -$25,000 -$15,000
DEBT DEBT
$175,000 Milestone check $190,000
$90,000 + $350,000 = $440,000

EQUITY EQUITY
$265,000 $175,000 + $265,000 = $440,000 $415,000

$90,000 $230,000
$1,750,000 -$1,400,000 $350,000 $200,000 $150,000
FIXED FIXED
CASH FLOW STATEMENT
CAPITAL CAPITAL
$350,000 $375,000
$150,000 -$140,000 $10,000 -$25,000 -$15,000
DEBT DEBT
$175,000 Top rail check $190,000
EQUITY $265,000 + $150,000 = $415,000 EQUITY

$265,000 $415,000

$90,000 $230,000
$1,750,000 -$1,400,000 $350,000 $200,000 $150,000
FIXED FIXED
CASH FLOW STATEMENT
CAPITAL CAPITAL
$350,000 $375,000
$150,000 -$140,000 $10,000 -$25,000 -$15,000
DEBT DEBT
$175,000 Bottom rail check $190,000
EQUITY $175,000 - - $15,000 = $190,000 EQUITY

$265,000 $415,000
PERFORMANCE MEASUREMENT
Let’s look at a couple of our
measurements
RETURN ON SALES

Return on Sales
BALANCE SHEET
Sales Return “AS AT”

CAPITAL “FOR THE PERIOD”
CAPITAL

FIXED CASH FLOW STATEMENT FIXED

MOVEMENT MOVEMENT
NET OPERATING NET
IN WORKING IN FIXED
CAPITAL CAPITAL
DEBT DEBT
DEFINITION
EQUITY NET PROFIT divided by SALES EQUITY

$150,000/$1,750,000*100=8.6%

$1,750,000 -$1,400,000 $350,000 $200,000 $150,000
ACTIVITY OF BUSINESS
PROFIT TO SALES 8.6%

RETURN ON CAPITAL

The Financial Fence® Primary measure
BALANCE SHEET
Return Capital “AS AT”

CAPITAL “FOR THE PERIOD”
CAPITAL

FIXED CASH FLOW STATEMENT FIXED

MOVEMENT MOVEMENT
NET OPERATING NET
IN WORKING IN FIXED
CAPITAL CAPITAL
DEBT DEBT
DEFINITION
EQUITY NET PROFIT divided by TOTAL CAPITAL EQUITY

“AS AT” $150,000/($230,000+ $375,000)*100=24.8% “AS AT”

$90,000 $230,000
$1,750,000 -$1,400,000 $350,000 $200,000 $150,000
FIXED FIXED
CASH FLOW STATEMENT
CAPITAL CAPITAL
$350,000 $375,000
$150,000 -$140,000 $10,000 -$25,000 -$15,000
DEBT DEBT
$175,000 $190,000
KEY TOP LEVEL MEASURE
RETURN ON CAPITAL 24.8%
EQUITY EQUITY
$265,000 $415,000
High level review
EXAMPLE
COMPANY
RETURN ON SALES 8.6%
RETURN ON CAPITAL 24.8%

•Which measure sounds best?
8.6%
or
24.8%

•Which measure encourages

the business owner to keep
going?
•Which measure helps the

business owner appreciate the
real value of what he’s doing?

RETURN ON Return Capital

CAPITAL BECAUSE WORKING
OFTEN IT’S BIGGER NET

CAPITAL
PROFIT
FIXED
CAPITAL
BUT also a far more powerful measure

for the business

Today we can only touch the tip of the iceberg
Today’s
presentation
The depth
of our
business

What is a Business Sherpa?
• In the dictionary a Sherpa

has been described as:
“an expert chosen by a chief
executive to assist in
preparations for a summit
meeting.”

What is a Business Sherpa?
A key quality of a Sherpa is a
primary concern with getting the
person they are guiding to the top of
the mountain
Our Business Sherpas have already

been up the “business mountain”
Our Business Sherpas have the skills
and experience to guide you to the
pinnacle of business success
The most famous Sherpa
• The most famous Sherpa is Tenzing Norgay who
climbed Mount Everest with Edmund Hillary for the
first time in 1953.
• Tenzing and Hillary were the first people to
conclusively set their feet on the summit of Mount
Everest.
• Tenzing stressed the unity required for climbing
teams but disclosed that Hillary was the first to put
his foot on the summit.
• He concluded: "If it is a shame to be the second
man on Mount Everest, then I will have to live with
this shame." © Copyright One Sherpa Pty Ltd 2008
The value of walking with a Sherpa
“Going alone is a
lonely way to go”
Many business leaders have
neither the knowledge
nor the specific skills
to optimise the performance
of their business

“Going alone is a
lonely way to go”
Engaging the assistance of
a Business Sherpa will
assist you move your
business to its ultimate
performance

“Going alone is a
lonely way to go”
It is virtually impossible to
reach the pinnacle of
success if you try and take
the entire journey alone

Time to go to base camp

How to get started
• The most effective way we have found
is by taking the ‘live’ information from
a business and ‘putting it on the fence’
• This allows you to see first hand how it
gives a completely different perspective
on your business and its performance
• Until you take this step, your journey is educational but
theoretical.
• Until you see your own information on the fence it is
impossible to have a business experience with the fence.
The Advantages To You……
• Understand the financial outcome of
interacting with your customers A
D
V
• Make sure you get your fair ‘share of the A
N
pie’ by not being squeezed by both T
customers and suppliers A
G
E
• Reduce your business risk as a result of S
improved decision making

• Maximize the cash in your pocket
• Allows you to spend less time working in your business
Some Typical Real Benefits ……
• Peace of mind that your business is
a great investment
• More discretionary time to spend
with your family / friends /
personal interests
• Having the freedom to make decisions and not feel
squeezed by everyone
• Don’t feel like you’re always the last in line to get paid
• Having the freedom to do the enjoyable parts of your
business © Copyright One Sherpa Pty Ltd 2008
• The first step for you is The Business
Financial Fluoroscope Report
• The Business Financial Fluoroscope
Report is an in-depth look at the
financial dynamics of your business,
using The Financial Fence®
• The Report allows you to see what’s
really going on inside your business
and identifies areas for improvement.
Results from a Fluoroscope
• Executive summary
• Forecast
• Commentary and explanation of all
the indicators used in the analysis
• Recommendations
• Personal consultation to explain the
results

Start with a Do you know YOUR
FLUOROSCOPE FUTURE?
Do you have a plan?

a nd
O W AY
r e N O D
ut u eT
s s F d o n
s in e P E
B u S C O
ou r R O
i n Y LU O
e s t r F
v
In T yo u
GE

Contact us
Email: service@onesherpa.com
www.thefinancialfence.com
www.onesherpa.com© Copyright One Sherpa Pty Ltd 2008

Introduction To One Sherpa

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THE WAY TO A BETTER FUTURE

© Copyright One Sherpa Pty Ltd 2008

Business leaders, carrying the load of responsibility for an

© Copyright One Sherpa Pty Ltd 2008

© Copyright One Sherpa Pty Ltd 2008

© Copyright One Sherpa Pty Ltd 2008

© Copyright One Sherpa Pty Ltd 2008

Many people are looking

They have visions

© Copyright One Sherpa Pty Ltd 2008

SO WHY DON’T THEY REACH THEIR VISION?

© Copyright One Sherpa Pty Ltd 2008

There are three

TRADITIONAL BUSINESS OUR BUSINESS FOCUS

These three differences means our focus is quite

© Copyright One Sherpa Pty Ltd 2008

As a result they have

© Copyright One Sherpa Pty Ltd 2008

© Copyright One Sherpa Pty Ltd 2008

© Copyright One Sherpa Pty Ltd 2008

© Copyright One Sherpa Pty Ltd 2008

1. Fences are made of two parts :

Interaction with Infrastructure

Interaction with Infrastructure

Interaction with Infrastructure NET

© Copyright One Sherpa Pty Ltd 2008

Interaction with Infrastructure

© Copyright One Sherpa Pty Ltd 2008

© Copyright One Sherpa Pty Ltd 2008

© Copyright One Sherpa Pty Ltd 2008

PROFIT & LOSS ACCOUNT

© Copyright One Sherpa Pty Ltd 2008

PROFIT & LOSS ACCOUNT

© Copyright One Sherpa Pty Ltd 2008

PROFIT & LOSS ACCOUNT

© Copyright One Sherpa Pty Ltd 2008

COST CONTRIBUTION INFRASTRUCTURE NET

© Copyright One Sherpa Pty Ltd 2008

COST CONTRIBUTION INFRASTRUCTURE NET

© Copyright One Sherpa Pty Ltd 2008

COST CONTRIBUTION INFRASTRUCTURE NET

© Copyright One Sherpa Pty Ltd 2008

THE FINANCIAL FENCE ®

THE FINANCIAL FENCE ®

THE FINANCIAL FENCE ®

$90,000 + $350,000 = $440,000

THE FINANCIAL FENCE ®

EQUITY $265,000 + $150,000 = $415,000 EQUITY

THE FINANCIAL FENCE ®

EQUITY $175,000 - - $15,000 = $190,000 EQUITY

© Copyright One Sherpa Pty Ltd 2008

WORKING PROFIT & LOSS ACCOUNT WORKING

COST CONTRIBUTION INFRASTRUCTURE NET

FIXED CASH FLOW STATEMENT FIXED

© Copyright One Sherpa Pty Ltd 2008

SALES COST CONTRIBUTION INFRASTRUCTURE NET

© Copyright One Sherpa Pty Ltd 2008

© Copyright One Sherpa Pty Ltd 2008

WORKING PROFIT & LOSS ACCOUNT WORKING

COST CONTRIBUTION INFRASTRUCTURE NET

FIXED CASH FLOW STATEMENT FIXED

© Copyright One Sherpa Pty Ltd 2008

THE FINANCIAL FENCE ®