We must stress that we do not believe, as most accountants believe, that the best way to increase profits is to cut costs. No-one grows anything by cutting it and we are in the businesses of growing businesses not cutting them. Indeed we encourage our clients to think of costs in a completely different way. We believe in a completely different definition of profit to what most accountants will tell you. To us:
Net Profit = The Sum Total of Customer Delight
When you accept this you can understand our definition of costs. They are the Cost of Resources Used in Creating Customer Delight. It follows that cutting costs reduces customer delight and so reduces profits as well. If your main strategy is cutting costs you simply go into a downward spiral.
We will introduce you to the proven concept of the Four Ways to Grow Your Business. There are indeed only four ways to grow any business in whatever sector it operates. Whatever strategies for growing businesses have ever been developed fall into one of these Four Ways. We will identify strategies that will cover all of the Four Ways so that the strategies act in synergy to supercharge your profits.
Most business owners that we meet know their products or services inside out and how to deliver them. Sadly most don’t understand the nature of the direct relationship between the activities that are carried out, the cost drivers and the profit that flows from them. Our Profit Improvement Programme begins with meeting with you to discuss in detail the processes that exist in your business that generate income, gross profit and costs.
Once we understand that we will then carry out a Financial Performance Review, preferably covering a four-year period. This will show whether the financial results of those process are what might be expected form what you have told us. It will also show the key ratios and trends in your business in an easy to understand graphical format and using established analytical procedures we will help you see what is working well financially in your business and where improvements can be made.
We will carry out a benchmarking exercise using the largest database of companies’ financial results in the United Kingdom so we can compare your results, ratios and trends with similar companies in the UK. This will help us determine the amount of profit improvement potential that there is in your business and to start formulating plans to bring improved profits into being.
Then we will analyse your turnover into its constituent parts either by product or by customer (or both) so that we can see where your revenue is flowing from and what your gross profit margins are in each part of your business.
After that we can create a detailed financial model of your business showing the sources of revenue, gross profit, overheads and payroll costs. This is used to create a financial plan for the forthcoming year and also produces a cash flow and profit forecast, forecast balance sheet and monthly and quarterly figures for you to check your progress against.
Throughout the year you will receive quarterly accounts to measure your progress against your new financial plan and we will hold a quarterly meeting with you to interpret your results and discuss any strategic changes that might be necessary to achieve your goals.
We believe in providing high value services to our clients and we understand that the return on investment that our clients expect from our Profit Improvement Programme is increased profits. If there is no prospect of improvement in profits as a result of out work we wouldn’t expect to be paid so we make this guarantee. If we cannot show you an achievable way of increasing your annual profits by five times our fee for the work we will give you a full refund of our fee.