Accounting Articles > Business Consulting:

Can you help get my business to produce profit?

Although accountants are primarily thought of as tax planners, we also happen to be very knowledgeable in the area of Business Consulting.

The process of doing the books and tax returns for hundreds of companies, over large spans of time, provides a wisdom that cannot be found elsewhere. We have seen countless examples of what works and what doesn't work. Most of this knowledge can be transferred, if you are willing to listen.

Businesses tend to fit into four categories: Dogs, Problem Children, Shooting Stars, and Cash Cows. Developing them from one category to another is difficult, but not impossible.

1. Dogs
   The name says it all. It's a business that just doesn't work. There is an intrinsic problem in the marketing mix of Men, Money, Material, and Machinery. The product is obsolete. The product fills yesterday's want, rather than today's need. What do you do? Change the product. Change the method and the means of production. Change the location. Discounting the price will generally just cause you to lose more money.
2. Problem Children
   This is a newer business that doesn't have its legs underneath it yet. The product is new. The staff is inexperienced. The leadership of the company is unproven. Every ridiculous problem that can occur, will. Murphy's law is in full effect. What to do you do? Remain flexible. Realize that people are going to make mistakes. The business that you end up with is never like the business that you envision. Come up with reasonable solutions to the impossible problems of childhood. Have patience with your child.
3. Shooting Star
   This is a newer business which is growing so quickly that it's out of control. A rapidly growing business is a finance nightmare. How do you cover your expenses when your receivable is growing at an exponential rate? How do you train employees fast enough to handle the ever-growing traffic? How do you regulate supply of raw materials to manage production? What happens when you run out of space? You need to have patience with your precocious brain child. As soon as you solve one problem, you have another. But these are good problems to have.
4. Cash Cows
   This is an older, established, and controlled business that is doing quite well. The business has already been through the wars, the problems of childhood, and the teenage years. What to do next is the main question for management. You can just milk this cash cow, sit back, and rest on your laurels, or you can build on your success by exploring new opportunities and accepting additional risk. It all depends on the goals of the ownership. Cash Cows are generally quite saleable as well.

Wherever your business happens to be, and whatever it happens to do, an outside perspective can help in many ways.