How Well is YOUR Business Performing?
If someone asked you to grade your company, could you do it? Of course we would all WANT to give ourselves an “A,” but would that be accurate? Successful business owners know the importance of keeping a keen eye on their company, regardless of its size or industry, but do they always have the right tools to dig into their finances to really know where they stand?
If you were looking to sell your home, you would expect your Realtor to do their homework. During your meetings they should be able to present you with comparable homes in your area, and the reasons for their price tags. You would discuss the kitchen upgrades, as well as the outdated landscaping. As a business owner, the same discussion should happen with your CPA or business advisor.
Your business advisors need to be analyzing your financial data to make sure that you are moving in the right direction to achieve your personal and business goals. While your bookkeeping and financial statements should be keeping you up to date, they should also be assisting with your business planning. What about assessing a specific area of your business, like comparing your profit margin with the industry average in your area? Are you investing enough time and money in your employees?
One of the most valuable investments you can make in your company, is the advice and guidance of a knowledgeable business advisor. Make sure to find one that can answer these questions, and help guide your business based on your specific financial data. The best place to start is with a proactive CPA that can answer the following questions;
-What is the best tax structure for my business to help minimize my tax obligations?
-How does my company compare to itself over a period of time?
-How does my company compare to similar type businesses in our region?
-How does my company compare to industry benchmarks?
-What specific steps can I take to increase our profitability and value?