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AH Cunningham & Associates
Profitability

Planned Profit establishes PROFIT as the primary result of the business plan. It is the opposite of residual profit - or making do with whatever is leftover after paying fixed and variable expenses. Profit is "predetermined" by controlling variable expenses relative to revenue, and holding employees accountable, both operationally and financially (through Pay-for-Performance plans), to measurable standards of performance that support the business plan.

Ever wonder where all the cash goes? Still operating out of the checkbook? You may now be at the point where what used to work for cash management no longer works because your business is changing.

The profitability of your business can involve many business activities but there is one for sure. If you can't measure it, you can't manage it. CA can help you get control of the books and really use them to make your business more profitable.

You may already have the data and just need help in analyzing it. Or, certain processes may need a closer look to make sure you are operating effectively and your quality standards are up to par.

If you have little idea on how profitable you are, now is the time to find out, particularly if you want to know how valuable your business is to others. A business analysis by CA is probably in order and will put you on the right track.

CA implements budgeting and operational controls:

  • We work directly with and/or supervise key managers to implement new budgets
  • We implement inventory control programs to increase inventory turns
  • We implement "just-in-time" purchasing programs
  • We implement job costing analysis and quality control programs

CA closes and/or restructures losing operations or entire divisions

  • We streamline operations, eliminating duplication or redundant activity
  • We restructure operations to ensure full utilization of workforce, systems and inventory
  • We close unprofitable divisions

CA implements profits:

  • We cajole, beg, push and demand change from owners
  • We do whatever it takes to get real
  • We implement Preplanned Profit

 

Additional profits are realized when:

 

  1. Employees, who are financially motivated, identify new opportunities to reduce variable expenses,
  2. Aggressive discounting or new promotions, funded by savings from reduced variable expenses, can bring in new business and new revenues
  3. The company makes capital investment decisions, based on return on investment, that can be planned and measured, and employees can be held accountable for the profit improvements generated by the investment.

The key is to motivate employees to work within the philosophy of measurement, accountability and tight control of variable expenses, AND THEN provide employees with the opportunity for financial reward.

 

 

    Practical Business Advice; We Can Help!

    AH Cunningham & Associates, LLC

    A FranCnsult Company

    Pompano Beach, FL 33062

    Lexington, KY 40502

    Phone: 954-941-8847


    Email: ahc@ahcunningham.com