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Archive for December, 2011

Jeff Carter Retrospective (Book Review)

Sunday, December 18th, 2011

Jeff Carter Retrospective

Jeff Carter (1928-2010) left behind an archive of around 55,000 film negatives that spanned a 50 year career as he worked and travelled through the back-lots of Australia. His photographs are of ordinary working class Australians from the cities to the country and along the coastline. Jeff Carter’s letterhead read “photographer for the poor and unknown”, wrote Robert McFarlane in a Sydney Morning Herald obituary on November 6, 2010.

Jeff Carter was a writer and photojournalist with contributions to leading magazines like Women’s Weekly, Pix, People and National Geographic. For a time he was the editor of Outdoors and Fishing. He was also Australia’s best documentary photographer of his generation although there are more simple truths secreted in his photographs than mere cultural records of the day. There is humour, compassion and a hell of a lot of plain and ordinary beauty.

When you read Jeff Carter Retrospective from New Holland Publishers it’s hard not to think of that later iconic Australian with a camera, Rennie Ellis (1940-2003). Although it seems Carter chose the low road and Ellis the high; Carter the ordinary rural Australian and Ellis the contemporary rock stars and urban subcultures of his era. Yet for their differences in social surroundings the photography shows a shared Australian documentary genus that seems to link them. Rennie Ellis’ No Standing Only Dancing reflects the bright lights and aspirations of another facet of Australian history and is well worth a read if you can find a copy.

Jeff Carter Retrospective includes a selection of photographs spanning from 1960 over the next 50 years and is split into five sections. ‘The Big Smoke’ looks at Australian urban life transitioning out of the 1950s into the 1960s. ‘Beach Culture’ records our cultural relationship with the expansive Australian coastline. ‘Properly True’ moves inland to the expansive hard country and the people who made it their home through the 1950s to the present day. ‘Men and Women of Australia’ are deceptively simple portraits of ordinary and extraordinary Australians. And ‘The Next Wave’ includes a selection of Australia’s children.

This book, first published in 2005, was republished for the Beach Bush and Battlers exhibition at State Library of New South Wales that was held in early 2011.

e-Business Red Flags & Points of Failure

Thursday, December 15th, 2011

The measure of an e-business isn’t whether or not it will occasionally fail. That part is inevitable, at some point even the best system will fall over for somebody in some dimension. The measure of a competitive e-business is the effectiveness and efficiency of their response at that point of failure.

That sounds counter-intuitive to a lot of people. If somebody criticised your business under the old model you simply took offense and told them to hit the road. It was pretty much how the commercial world worked when customers were limited by geography to a subset of competitive alternatives.

In the modern context, every business (that has survived) has been forced to operate in hyper-competitive environments. What was once a large world with international borders and significant lag between destinations has shrunk, for the most part, to an always-on society where it’s just as easy to purchase a new leather wallet from the United States as from Bolivia, Latvia, China or Uganda. Or from the shop in your local central business district.

So we’ve adjusted our way of looking at the squeaky wheel who complains. More often than not people who complain are genuinely happy with the service except for that one glitch.

Ask yourself this question: If nobody ever complained about a product or service then how would it ever be improved? Through focus groups? No. Through progressively smart ideas in the coffee room? No.

That point of failure is a pool of opportunity to incrementally improve and you want… you absolutely need… people to complain. And the more you can tune a company culture into adopting that philosophy the more successful you can become in the hyper-competitive environment.

Points of failure provide significant opportunities at cheap cost and potentially great return. If you fix a glitch for one customer who complains then the issue won’t be had by the thousand customers who follow. It just makes common sense.

Think about it. Business A fields complaints like they were personal criticisms of their girlfriend’s underwear… versus Business B who fields complaints as opportunities to identify ways to improve and hone their service.

Who do you think wins the hearts, minds and wallets over the long-term in head-to-head competition? Yes, Business B. Hands down. Always.

Read the rest of this entry »

Know your Break-Even Point

Wednesday, December 7th, 2011

One of the most important things that your business needs to understand is the break-even point where all the operating costs are covered and your earnings (before interest and tax) is at zero dollars.

Fixed Costs

Fixed costs don’t rise as you increase the level of activity in your production. For example, rent might rise but it won’t be affected by the production of five or five-thousand items.

However, fixed costs tend to rise in sharp incremental levels at certain points. While your rent may not be affected by the production of five or five-thousand items there has to be a limit where you need to expand your production space – a bigger warehouse, a larger factory – and rent takes a large step upwards. It doesn’t rise gradually and in that sense it is said to be a fixed cost.

Other fixed costs might be your managerial wage (you pay yourself $120,000 per year regardless of hours worked or items produced), the direct cost of labour is usually fixed, insurance, accounting fees, the machines you use to produce your products, their maintenance… and the cost of the executives’ cars.

Variable Costs

There are also those costs that increase as the level of production activity increases – for example, variable costs would include the components and materials that go into the products, the transport fees, the consumables that were used to create the products and the packaging used to market them.

Variable costs are those that rise as production increases and fall as production decreases.

To slightly confuse the situation there are some semi-fixed (semi-variable) costs that could be identified. An example could be the consumption of electricity – lighting the factory is a fixed cost but heating the metal smelters is a variable cost that depends on the number of batches smelted during a given time period.

The sum of your fixed costs and your variable costs gives you the total operating cost. Understanding those variables can help you make better business decisions… one of which is to calculate your break-even point.

Again, the break-even point is where the total operating cost is covered and your earnings (before interest and tax) are zero dollars. It is the point where you break even without turning a cent in profit. Obviously, the break-even point is critical in any decision about production quantities and whether to expand or discontinue existing product lines.

Break-Even Analysis

There is a simple equation to work out the break-even point where you produce just enough of an item to cover production costs. Note that it must be stated with a time period, as in X number of items per day/week/month.

Break-Even Point = Fixed costs / (Sales revenue per unit – Variable costs per unit)

That is to say if you had a pottery studio with $2,000 per month fixed costs to run. And each set of 12 ceramic cups used $20 of raw materials and 1 hour of labour (at $25 per hour for the potter), with the cups sold for $120 per dozen… the equation would become:

Break-Even Point = $2000 / ($120 – [$20 + $25]) = $2000 / ($120 – $45) = $2000 / $75

Break-Even Point = 26.66 dozen ceramic cups per month

That means that at 26.66 dozen ceramic cups the busines starts to generate earnings. It is the point where you cease to be running at a loss and will begin to turn a profit.

Working out the Contribution Margin

If you look at the last part of that Break-Even Point formula you can also work out the contribution per unit:

Contribution per unit = Sales revenue per unit – Variable costs per unit

In the pottery studio example, the contribution margin is $75 … meaning that $75 per unit contributes to fixed costs per unit, after which the rest goes to profit. When fixed costs are covered the entire contribution margin per unit becomes profit.

The contribution margin is the amount of marginal profit per unit sold.

As a management tool, the contribution margin can be used to measure the degree to which sales growth transposes over to profit growth (also called operating leverage). And, as this article showed, it is also important in the calculation of the break-even point.

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About the Author

Steven Clark Steven Clark - the stand up guy on this site

My name is Steven Clark (aka nortypig) and I live in Southern Tasmania. I have an MBA (Specialisation) and a Bachelor of Computing from the University of Tasmania. I'm a photographer making pictures with film. A web developer for money. A business consultant for fun. A journalist on paper. Dreams of owning the World. Idea champion. Paradox. Life partner to Megan.

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