The Business of Business
What is the “business of business”? After the skills for your industry or trade have been learned, after you’ve proven that you can bring a quality service or product to market, after doing what you do best, comes the MOST challenging part of owning a business… the ”business of business”.
This is true in vast majorities of businesses in America today. Regardless of the industry, regardless of what field they came from, most small business owners started by working for someone else honing and developing their skills. They may have moved up in the ranks being promoted for the work they had done. They learned what they liked and didn’t like about their employer and the way the business was run. Then low and behold the day came that they felt that they could do it as good if not better than their employer. Their mind saw what they perceived to be the opportunity to make the “Big Bucks”, and went into business for themselves.
For most business owners it didn’t take long to realize that there was much MUCH more to running a company than producing a quality product or providing the highest quality service in their industry. “Where did all these additional expenses come from”? “How do I track where all my money is coming and going”? “Why does my financial report show that I am making money but there isn’t anything any money checkbook”? Or, “There is money in my checkbook but that income statement that my bookkeeper printed says that we have lost tens of thousands of dollars… how can that be”?… “This financial report MUST be wrong”.
There comes a time for every business owner to swallow the bitter sweet pill that forces them realize that the business of business has become more important than the business itself. At the end of the day if they don’t manage that properly there is no business to manage. So where do they start?
A simplified reporting system, a dashboard, if you will now that would be beneficial. A business of business “dashboard” is much like the dashboard of an automobile that tells vital information to the driver of the vehicle without them being required to have the skills of an auto mechanic. This business of business “dashboard” could assist the business owner in making quality, informed business decisions without having to be a CPA or have their MBA. Imagine having a snapshot of all the vital areas of the company in an easy to read business layman format that any business owner can read and understand.
As simplified as this business reporting can be, it’s NOT easy for most business owners to develop. Most business owners would agree that they would love to have business reporting and accurate financial reporting. Others would go as far as to say that they have been trying for years to develop this very thing. There is a large difference between bookkeeping compliance that collects information and puts it into a historic report and managerial accounting that takes a much more aggressive forward proactive approach. This kind of managerial accounting and simplified dashboard reporting is usually best developed and implemented by a specialist in that field.
There are various business consultants, business advisors, managerial accountants and or business professionals that can assist setting up these systems and controls and developing a simplified “dashboard” for the owner to understand. This is where the business owner must realize that every dollar spent in their business is a form of investment. Like all forms of investment, its not as much about how much the investment costs as it is about the return on investment. By having accurate, up to date information the business owner can capture small percentages or even fractions of percentages all across their income statement that may translate into very large dollars.
The practice of tripping over dollars while trying to pinch pennies must stop if the business is going to maximize its profit or, as was mentioned before, even survive in today’s business world. It comes back to what was established in the beginning. There comes a time when the business of business is more important than the business itself.
This article was written by Chris Amato, an experienced Small Business Advisor in Arizona. For more information on how you can get help for getting a Small business stimulus package, please visit the site: http://myonlinebusinessadvisors.com/ or call (480) 287-1227.
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