Chad is a Charlotte CPA who works with small business owners and individuals on a monthly basis to provide them with proactive guidance and advice on how to grow their business, minimize their tax liabilities and grow their bottom line. Chad is also a primary contributor to his firms blog – Beancounter Ramblings You can find our more about Chad by visiting his profile here: Chad Bordeaux

In it’s simplest terms, your company’s economic engine is that one key ratio that your company can focus on that will have the most sustainable growth impact.  This ratio varies from industry to industry, and even from company to company within the exact same industry.

In Good to Great, Jim Collins detailed how Walgreen’s switched its focus from profit per store to profit per customer visit.    Walgreen’s business strategy was convenience.  They wanted to make it as convenient as possible for their customers to get to a Walgreen’s and to shop there.  This would result in many stores close together within a geographic area which had a negative effect on profit per store.  On the other hand, profit per customer made sense because it was a true indicator of the customer experience.    Another advantage is that it is much easier for store level employees to focus their efforts on the goal of profit per customer than profit per store.  Each and every employee that comes into contact with a customer has the opportunity to influence this ratio.

As stated earlier, the economic engine for your company may not be profit per customer – there is a good chance that it is not.  Some companies use a measure of employee productivity- such as profit per employee as their economic engine.  Nucor uses profit per ton of finished steel. Kroger uses profit per local population and Southwest Airlines uses profit per place.  Many restaurants use profit per square foot.   The first step is to determine what your key economic engine is and focus your efforts on it’s continual improvement.

Chad is a Charlotte CPA who works with small business owners and individuals on a monthly basis to provide them with proactive guidance and advice on how to grow their business, minimize their tax liabilities and grow their bottom line. Chad is also a primary contributor to his firms blog – Beancounter Ramblings You can find our more about Chad by visiting his profile here: Chad Bordeaux

One of the greatest complaints of employers is the cost of benefits now that medical has become the monster in the benefit room. What can organizations do to serve employees without breaking the bank? Join the information age.

Next Gen employees are information junkies and they have many information needs a corporation can meet with minimal cost.

Companies need to make available free podcasts or online self-study seminars for employees on among other things finances, wellness, marriage, and family. These are not those black and white movies from the 50′s on how to be a happy homemaker. This is raw information where employees can learn how to better manage finances especially in these economic times.

Wellness programs start with the mental side of dealing with stress, dealing with family issues and dealing with the scary times for those just beginning their work careers in today’s economy. Bosses are not the experts on these topics and sending employees to a one day, one size fits all seminar holds little value. Informational downloads can be appreciated at the employees leisure.

Not only will this offer new benefits to meet employee needs but it creates a culture of personal growth which is a great work culture that will foster organizational growth because the growth mindset has been established. Help the employees with their educational and informational needs and help your company create a culture of growth in the process.

The managers are going to always set the tone for the rest of the employees, whether it is a positive outlook, a negative outlook or a growth outlook. In order to keep your managers fresh, keep them growing and keep them in the right frame of mind, provide a book study that will improve their skills.

I’ve had a number of clients in the finance industry this year order my Russell’s Rules book for their managers to study and discuss in their weekly meetings. The rules are short, simple, to the point and have implementation action steps that are easy to do. By using practical application leadership books, you keep the knowledge base growing, the positive discussion active and the workforce happy with better leadership approaches being used with them.

Some basic steps for knowledge growth:

1. Make sure the book is something your managers will actually read.

I consider Peter Drucker one of the best leadership authors of all time, but unless your manager team is deep into the science of leadership and business, they will not finish a Drucker tome. Short, to the point and immediately applicable books might not make the best seller list, but your managers will make it to the back cover.

2. Have meaningful conversations about what was to be covered for the week and how these tools are going to actually be put into practice.

The discussions will allow people to offer their spin on the information and how they plan to use it. If the group truly is interested in growing on a personal level the conversation will truly be beneficial to the organization. As the executive you will also see who is making the effort to make a difference and who is going through the motions just to follow along. This information becomes your growth as you better learn who cares and who doesn’t and who may be dragging down your team and who may be the best selection for your succession plan.

Reading leadership information without putting it into practice is not going to give you the return on your time investment; therefore, be sure to build in accountability to putting these things into practice.

3. Make it fun.

If this becomes a chore for your managers or an addendum to your weekly manager meetings, it will take on an air of unimportance and a necessary evil. Have fun with it, get people involved. Use the book you’ve selected as a way to talk about the parts of your organization you want to grow. Even when the economy isn’t facilitating market growth, the growth inside the organization should always continue.

Check out this video for a piece of managerial growth education.

These are questions that I work on daily with small business owners.  Most business owner’s think in terms of one line item when they try to grow their business – revenue.  This is logical choice.  After all, if revenue is higher, you must be making more money, right?  Wrong.  While this may be the case in a perfect world, it often leads to business owners struggling for years to make ends meet when the mathematics of the business just do not work.  What can be done to fix the problem?  It’s simple.  We just have to change the number so that the math works.

We recently helped a client who had been consistently loosing money for seven years – at a rate over of about $175,000 per year.   When talking with the client, his solution was that he needed more sales.  If he could just get more sales, he would be profitable.    We sat down with him and did a thorough break-even analysis.  Using his current cost structures, it was going to take nearly $3 million in sales for him to breakeven.  He was currently sitting at $700,000.   The answer to his problem was not sales, it was his cost structure.

We looked at his cost structure and compared it with his industry peers and were able to pinpoint a few key area where his cost were out of line.  We then implemented a strategy to fix those key areas.  Within nine months, his business was profitable.

The logical answer to growth is on the revenue line as the ultimate goal in a business is usually to make a profit.  No matter how much you have in revenue though, that does not mean you are profitable.  Make sure you know what your breakeven point is and how your cost compare with your competitors.  Start your goal setting from the bottom line profit and then move upwards to look at what you need to do to reach your target goal.

The next step after getting to or increasing profitability can then be moved toward reinvesting the profit into your business to grow it even further and compound the positive effects.  Stand back, monitor the progress, and let it grow!

Chad is a Charlotte CPA who works with small business owners and individuals on a monthly basis to provide them with proactive guidance and advice on how to grow their business, minimize their tax liabilities and grow their bottom line. Chad is also a primary contributor to his firms blog – Beancounter Ramblings You can find our more about Chad by visiting his profile here: Chad Bordeaux