By Rich Bond
Most people I know who own or run a business rely primarily on their gut instincts to make decisions. And that’s often been a key to their success.
But as businesses grow and became more complicated, making decisions without reviewing all the facts often does not generate the desired results.
The classic example is: If I sell more product, my company will be more profitable.
Often selling more does not increase profits because it does not take into consideration other facts such as:
1. The company has been selling more of their less-profitable products, and less of the more-profitable products.
2. The incremental sales are often made at a significant discount, in essence mortgaging future sales.
3. Product costs are going up but are not offset by prices increases.
To make more money, you need to manage not only what you sell and to whom you sell, but also your sales margins.
The only way you can do this is to have a financial person (CFO, Controller, or Finance Director) to provide you with analyses identifying profitable and unprofitable products and customers. These are the FACTS you need to increase your chance of making decisions that will generate the intended results.
If your finance person is not providing you with the necessary facts for your decision making, I can help you remediate the situation through coaching or help you find a replacement on a confidential basis.
Don’t blame yourself or your sales force. Let finance help you identify how everyone can work together, succeed, and have FUN doing it.