Frequently Asked Questions About the Profit Improvement Process

1. What exactly do you mean by hidden profits, and where are they hiding?

2. Every year, my accountant tells me my business made money but there never seems to be any cash in the bank. What am I missing?

3. How can my profits just magically improve? The only way to increase profits is to get more customers.

4. Why doesn't my accountant give me any profit advice?

5. This might be good advice for larger businesses that can afford these types of services but I just have a simple, small business. How can you help me without breaking the bank?

6. Strategic planning sounds like a military term. What could I possibly gain from strategic planning?

7. Why won't my banker lend me the money I need to grow my business?

8. The numbers are just the numbers. They can't really tell me anything I don't already know about my business. What could you possibly do with the numbers that would help?

9. If I raise my prices to increase profits, won't I just be losing out to my competitors?

10. Aren't you making things a bit complicated? What small business owner cares about all this stuff? And if I take the time to do it, I'm just taking time away from more important things.

11. Every business has potential. What will I gain from having you show me the profit potential of my business?

12. How can a 'number cruncher' tell me how to run my business?

13. Profitability assessment, diagnostics, strategic planning. Those terms all sound like 'big business'. How would they apply to a small business?

14. In your seminar, you demonstrated that a 5% increase in sales could improve profits by 50%, 100% or even more. Can you explain why a 5% increase in sales isn't just a 5% increase in profits?

15. What if I don't want all the services in the Profit Improvement Program?

16. How will this affect my relationship with my current accountant?

17. What are the major benefits of using your services?

18. Why can't I use my year-end statements to manage my business?

Hidden profits are 'buried' in your business but you have to know where and how to look for them. Without a proper analysis of your information and in the absence of a plan and targets, they will continue to remain hidden.

Profit does not equal cash flow. Profit contributes to cash flow but there are many other factors involved. They are separate concepts and need to be understood and managed both independently and together. If you focus only on profits and ignore cash flow, you'll always wonder where the money went.

It's a common myth among business owners that increasing the number of customers is the only way to increase profits. This concept is even misunderstood by a large number of marketing professionals. There are more ways to increase profitability. Only by analyzing the numbers will you be able to determine which strategy or strategies will give the best opportunity for increased profits. For a more in-depth discussion on this subject, refer to Increasing Profits Takes More Than Good Luck

For the same reason your accountant doesn't give you nutrition advice. Quite simply, it's not his or her job. Traditional accounting services focus on the preparation of financial statements and income tax returns. It's just not part of their role to help their clients develop the tools and strategies required for profit improvement.

Our services are Tailored to Your Business. We understand that all businesses have different requirements and we work with you to develop a plan that is effective and doesn't 'break the bank'.

The concept did, in fact, start with the military who realized that the war is won on the planning table and not in the battlefield. The same holds true in business. If you're going to win the war, you need to develop a strategy for doing exactly that before you start playing for real. In the absence of a strategy, you'll just be reacting to circumstances and never be in control of your direction. Without direction, who knows where you'll end up?

Chances are that you haven't properly prepared for your banker. Your banker expects a plan that demonstrates you know: where your business is going, what you're financial requirements, why is this money required and how you will repay the loan. For more information, refer to Finding Money.

Numbers tell you what's happened in the past and, in a lot of cases, they don't even do that very well. You may know what your total sales were for the past year, but do you have a breakdown by customers? By product line? Without more detailed analysis, all you'll get is the past. Once you know what to look for in the numbers, you can use this information to start creating the future.

Yes, you may lose those customers that don't perceive the value in your products or services. If you give them value, a price increase shouldn't be an issue. Raising prices should not be done in isolation but with a plan for demonstrating that value. Furthermore, a price increase should only be implemented once you understand the possible effects on profit.

Most small business owners don't care about this stuff because most small business owners are still stuck working in their business instead of on their business. When you're working in your business, just doing all the little stuff, you simply have a job. When you start planning and creating strategies, you begin to gain control of the direction and success of your business.

Every business does have potential but few realize the potential. Without seeing the profit potential on paper, there's no opportunity to develop a specific plan of attack to reach that potential. Without a specific strategy, your profit potential will always be hidden.

You're right, number crunchers can't tell you how to run your business. But we're not number crunchers. We are consultants with a broad knowledge of business principles and the ability to connect those principles to the numbers.

These terms may sound like 'big business' but the concepts apply to any business, regardless of size. Implementing these concepts when your business is small will improve your chances of getting bigger.

The idea that profit is directly related to sales is a misconception. Sales is only one of a number of factors making up the profit formula. Understanding how these factors inter-relate will allow you to make informed decisions to improve your profitability.

Every business is unique and the requirements for services will vary. Although there are some concepts in the Profit Improvement Program that are common to most businesses, the actual range of services provided will depend on a number of factors. Our services are always customized to your unique requirements and your budget.

It won't. Your accountant is there to prepare your year-end financial statements and income tax returns and can continue to perform this function for you. Their role is to report on the past performance of your business while our role is to manage and improve the future results.

In short, you will be in control of the financial health of your business. Instead of putting out fires, you will be able to manage your results and devote more time to working on, rather than in, your business. See What's In it For You? for a list of the benefits you will receive.

Your year-end financial statements are a report of the past. While it is useful to know where you've been, they don't help you manage your future. The information in your year-end statements is simply too old and too broad to be of much use in analyzing your performance and creating a blueprint for the future.