Does everyone understand the Profit and Loss Statement, also known as the Income Statement? Sales and growth seem to be the big focus for most companies, regardless of how the bottom line performs.  Sure, sales can create growth and expansion, but it can also spell chaos and turmoil. Companies can choke itself financially with growth without preparation. Customer service, staff retention and owner satisfaction can all suffer. How about Cash Flow when a company goes through a growth spurt? Will it drain the company funds or feed the company?  New equipment, more staff and higher inventory often are prerequisites of growth.

There are some great reports in QuickBooks that can help an owner manage growth, stay liquid and sane at the same time. The first is to understand the Profit and Loss Statement and to ask yourself if the current model is creating profit? Can it be improved? Will sales solve the profit problem? Or do I need to look at the current cost structure and pricing structure? Is the  company carrying too much inventory? What is the right stocking level? The QuickBooks Sales by Item Summary report can show you the movement of each of the products and what is not turning. Why do we need 100 parts of an item that we only sold 1 of all of last year?

Did you know you can setup a forecasts and monthly budgets in QuickBooks? You can and it is hidden in the heading Company, Planning & Budgeting. This is a great tool to use when in a growth mode or when a company is just watching costs.  The forecast can be the basis for the Cash Flow Projection. The Cash Flow report is invaluable for any company that is growing and they want to predict the crunch months. 

Keep becoming a student of Profit and Loss, Balance Sheet, Forecasts and Cash Flow reports. Get to know your industry best of benchmarks and set sail for those markers. Be a student of inventory because it has a large affect on meeting the customer's expected delivery time and, if to high, can drain off valuable cash flow. 

Small business owners today are forced to safeguard their money due to unpredictable economic circumstances. Some ways to assure business success is to maintain a cash flow that allows your company to continue operating and to forsee any unexpected setbacks. One way to do this is to develop a company budget that assures regularity within the business checkbook.  Read Scott E. Schaefer's article entitled Worry Less about Money with a Cash Flow Plan from CBIA News.

http://www.cbia.com/cbianews/sm_business_tips/199909sbworrylessaboutmoneywithacashflowplan.htmin

I was facilitating a business coaching session today when the owner of the business surprised me with a challenging question. He asked me what I had learned in coaching business owners through this difficult year. Here are some of the crazy things that struck me.

• This year is like no other. There is no map to follow. Trends are broken. Comparing the business to last year does not help.
• If we listen real carefully to our customers they will help us revamp our products and services to closely match what they really want now.
• Every business is unique in how the recession has changed it. Some services and products are in higher demand now and others have been stagnant over the years and this is a wake up call for businesses to take action.
• If we can survive this year with the key contributors to the business intact and participating in bringing new ideas to the table, that is a fine accomplishment and should be commended.
• It's a time to reach out to others for assistance and assist others.
• If the team can learn to do more with less, bring services & products  to the customer quicker and cheaper than before, then they can be proud of revamping a good business to a great business for 2010.
• If we can learn to be nimble race car adjusting quickly to the road ahead and less of lumbering locomotive than we will be great in 2010.

I have never been so amazed than I have this year by the small business owner's depth of creativity and skills they apply to survive in a down market and the lessons they use to thrive in an up market. What have you learned and what skills are you honing this year?

http://biznik.com/articles/lessons-from-the-recession

This is the ProFound Impact Process:

Monthly Improvement and Business Education Advancement

1. Advanced Financial Management Coaching
   1. One meeting a month. Minimum of 12 months.
   2. Analyze and Improve Business Profits Monthly
   3. Building a Budget.
   4. Developing and Understanding a Cash Flow Report
   5. Benchmarking your company to the Industry.
   6. Unlimited e-mails and phone calls.
2. Job Costing Coaching
   1. Analyzing what each job costs.
   2. Determining the costly issues and how to avoid them.
   3. What went right and how to ensure duplication?
   4. Take each job and improve upon it.
3. Teaching the Bookkeeper QuickBooks Done Right
   1. How to do Quarterly Payroll Taxes
   2. How to post Refunds.
   3. Where to post equipment.
   4. How to update Loan interest write offs monthly.
   5. Unlimited phone calls and emails.
4. Lean Manufacturing
   1. Learn the lean process.
   2. Learn to identify waste in your business.
   3. Learn how to eliminate waste.
   4. Learn to identify the root cause of waste.
   5. Eliminate waste
5. Lean Office
   1. Identify waste in estimating, Invoicing and Change Orders.
6. Technology Advancement
   1. Identify Technology to improve the company.
   2. Recommend one Technology improvement a month.
   3. Make recommendations on timeline.   
   4. Software add-ons for QuickBooks- Scheduler, Inventory, Estimators etc.
7. Future Strategies, Services & Products
   1. What are the key future indicators for your business?   
   2. How will the future affect your business?
   3. How can be proactive towards the future?
   4. What new services and products can your company provide?

Value Added to the Business and Owner

1. Advanced Financial Management Coaching
   1. Improve financials by avoiding costly mistakes and improving net profit.  Yearly  $_________  Times 3 Years $_________
   2. More discretionary time.   ______Hours Year
   3. Less Stress with a greater understanding.  ____Reduction of Stress
2. Improving Job Costing Yearly $______ Times 3 Years
3. Teaching Bookkeeper Accounting
   1. Less time spent cleaning up reports.
   2. Stress level reduction.  _____
4. Lean Manufacturing – 80% waste in most processes.
   1. Savings in to the bottom line by eliminating waste.  
   2. Improved on time performance.
   3. Improved Customer Satisfaction
   4. Morale improvement with staff.
   5. Repeat savings in future jobs.
5. Lean Office– 80% waste in most processes.
   1. Savings in to the bottom line by eliminating waste.  
   2. Improved on time performance.
   3. Improved Customer Satisfaction
   4. Morale improvement with staff.
   5. Repeat savings in future jobs.
6. Technology Coaching
7. Future Strategic Planning