If you want to win in business, you must keep score

The importance of timely & accurate financial information

I hear it often, “So and so is making a killing doing X, he just signed a client for $350,000 of work!”  That’s great, I think to myself, though I’ve learned as a CPA not to become too impressed by these big numbers.  Why? I’ve seen so many impressive revenue numbers be attached to equally unimpressive profits.  If you charge $350,000 for a project that takes 2 months to complete at a cost of $340,000 you’ve made $5K a month which annualizes to $60K per year.  A decent living, for sure, but probably not worth the effort considering the risk and responsibility of running a business.

Revenue is vanity.  Profit is Sanity.  Cash is King.

The most common mistake I see among business owners is not knowing their businesses’ true profitability.  All they see is what’s in the bank account.  Without a proper score card you can’t know if you’re winning.  When speaking with potential clients, too often I find out they have been putting in 80 hours a week to make 50-60K per year.  Again, a fine living but not at 80 hours per week, and not compared to the alternative of simply working for someone else.

It is all too common for owners to put their heart and soul into their business, go the extra mile for their customers, and then completely punt when it comes to their businesses financial success.  In my experience, this happens because many owners don’t know where to start, what matters, and how to clean up the mess that’s been created.  Letting your finances fall behind is not a recipe for winning in business.

“You cannot manage, what you cannot measure.”

-Peter drucker

Insight CPA fixes this problem for Home Services businesses.  Under our guidance owners learn what happened, why it matters, and what to do about it.  We educate our clients, help them avoid potholes, and design a roadmap for making more and keeping more.  You can only manage the outcome if you’re measuring the inputs.  Let us help you win by professionalizing your businesses’ accounting department.

Written by Jacob Hall, CPA: give me a call at 239-259-9295 if you want to chat about your getting your finances on track!