Validate the Numbers
Everyone has numbers. How accurate or representative they are is typically debatable. Therefore validating your P&L, Balance Sheet, and most important in distress situations, your Cash Flow are an essential step.
Controlling Costs,
Improving Performance
There are a number of key factors and metrics to controlling expenses and improving your Company's performance. While the numbers don't tell the entire story of your business, they do provide critical insight into how you are actually doing and where to focus attention for improvement.
Adding one dollar to your top line may bring as much as twenty cents to your bottom line. However, reducing expenses by one dollar adds one dollar to your bottom line and provides an extra dollar of cash that you can actually use.
Items Impacting Cash
Once confident of the numbers, it is easier to determine what is actually impacting your cash and your top and bottom line as well. Developing and executing action plans based upon this knowledge will move the business in the right direction.
Identify Capital Requirements, Sources
While expenses, both fixed and variable, play a major role in either pulling up or expanding the business, capital requirements and sources of funds cannot be overlooked. Once all are clearly understood, plans for funding, if required, will be far more productive and closed on a timelier basis.
Set Priorities, Limits, Actions
Any attempt to control costs and improve performance must have clearly defined priorities along with approved actions and limits that cannot be violated. This applies to cash, expenses and control systems currently in use or the implementation of new systems in the future.
Build Short-Term Financial & Business Plans
Whether plans are built for stabilization or growth they must always play to your strengths and 'fix' your weaknesses. Be prepared to narrow your focus, likely more than once, set milestones, chart your progress, and adjust the plans as results come in. Involve the entire Company and the entire Company will sign on in executing the plans.
Communication with Constituencies
Insuring all those who have a vested stake in the business are in step with the Company and what you're working to accomplish does not happen without effort and action. All communication must be honest, though full disclosure is not necessary in all cases.
Costs can be controlled and performance improved with the proper focus and understanding by all whose responsibility contributes to top and bottom lines. It usually turns out to be a matter of commitment at that point. Contact us to help you gain control of the business.