Cash in the bank

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Having cash in the bank doesn’t mean your business is making money.

I’ve worked with many business owners who closely manage their cash flow and bank account balances. That’s great. I do the same thing both for my personal and business accounts.

Unfortunately, some stop there. That’s a mistake.

I’ve met business owners who have never looked at their P&L or balance sheet. Focusing on whether you can pay the bills or if you have money in your account does not tell you the whole financial picture.

For example, can you answer these questions:

  • Are your COGS too high?
  • How much did you invest in that last project?
  • Which of your products, services, or divisions are making money and which ones aren’t?
  • Are you incurring expenses that you can reduce or eliminate and use that money better to grow the business?
  • How much are you putting toward the bottom line?
  • How long can you fund operations if your business took a major hit?


As a fractional COO, I value the insights and know the importance of understanding the financial side of your business (and the KPIs that go hand-in-hand). Not every visionary or business founder likes looking at reports and numbers, but there are things we have to do even if we don’t enjoy them.

I’ve convinced clients that numbers matter, and once they see it, they get it, and they wonder why they didn’t look at them before.

If you aren’t sure where to start, we can help.  Contact us on LinkedIn at https://www.linkedin.com/in/cmatt/ or https://www.linkedin.com/company/opal-partners-group/or use our contact form. CONTACT US

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Can you afford to grow? Can you afford not to?

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Growth: Can you afford it?

“Grow or die!” is a common, well-accepted business principal. Businesses must innovate, stay relevant, seek new customers, add locations, and offer new products.

But growth brings its own challenges. You have more products/services to support. You need more people. Rapid hiring makes maintaining culture harder. New tools and technology – and the time to integrate and use them – are expensive.

Your bottom line may suffer from your growth!

You may need to take steps to grow your bottom line instead of your top line. Eliminate products/services that aren’t profitable. Eliminate processes or activities that don’t add value. Don’t do things just because you’ve always done them. And, as hard as it may be, let go of employees who no longer fit culturally and don’t contribute to you vision.

Your bottom line profitability ultimately decides if you can afford top line growth and how long you can sustain it.

Read more about the good and bad of business growth here:  https://opalpg.com/2018/08/21/growth-good-bad-ugly/

 

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Return on…Resources?

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We all know what Return on Investments, or Equity, or Assets are but they may not tell the full story.  You need to get all you can from all your resources.  What is your Return on Resources?

Return on Resources???

You started and built your business on an idea, and then added sweat equity and capital to bring it to fruition.  Along the way you added people, provided training, invested in tools and software, began marketing, and possibly many other items.  Collectively, those are your company’s resources.  Why do you have them?  Because you need them to maximize your profits and the value of the business.

That’s where your operations come in.  Operations includes ALL the processes to keep your business running.  It’s not limited to how you deliver your products and services.

The goal of your operations is to extract value from every resource in your organization.

Let that sink in.  You only add people, equipment, processes, or services for one reason: to make more money.  Every employee, every tool, every asset, every decision should be contributing to reaching your goals in some way.  If not, it’s dead weight on your organization or consuming time and money that could be better used elsewhere.

Ask yourself if the value you are receiving from your resources is what you expected.

  • Do you add more people rather than look for ways to be more efficient?
  • Do new hires get up to speed and become productive quickly?
  • Are there products, services, or processes that add little value and should be modified or eliminated?
  • Have tasks, routines, products, or even employees been added slowly over time without a good top-down review to see if they are still needed?

If you aren’t making the most of your resources, let OPG help you maximize your return.

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