« Going it Alone - Software Consultant | Main | Basics of Branch Circuit Testing »

Finding Hidden Profits

Acland Brierty…explained ? Blog Archive ? Cropping works for business and photos

This is one of the better analogies I've seen for describing why it's so important to focus just on the most profitable pieces of your business.

Personally I have a limited artistic eye so I would never be able to look at the bigger picture in this example and crop the right things out - many leaders of smaller and growing businesses are in the exact same category.

A lot of the problem stems from the fact that most accounting systems were setup to simply show the big picture and to help prepare taxes. This means that deciding where to crop is based more on art than science.

Before taking any drastic moves with a growing business you should work to integrate your accounting and operations so that you can clearly see the nuggets within your business that are worth nurturing, the cash cows that are worth milking and the dogs that need to be cropped; the ones that are making your performance simply average even though you have some fantastic nuggest and cash cows.

While this seems obvious it rarely is for many businesses. Very few growing companies even have regular financial statements, much less integrated accounting and operations that allow them this level of detail.

In short - I strongly agree with the cropping analogy and you should work to make it 90% science and 10% art.

Posted by David on November 23, 2005 07:16 AM|Permalink

TrackBack

TrackBack URL for this entry:
http://www.dbrownonline.com/mt/mt-tb.cgi/16