Business And Financial Wisdom You Can Put To Work
Finance
Here are 10 good questions to ask yourself about your business finances. Most questions have multiple parts because they relate to the core issue you are asking about. For this reason I have added headings
Note you don't necessarily have to answer these questions. You do however need a competent accountant and a well kept, up to date set of books and system that can generate the necessary data.
The questions and their answers can be used to support pricing decisions, highlight problem areas, revise operating strategies, highlight problem areas and more.
In talking to your accountant, make sure you ask follow up questions such as "What does this mean to us? to uncover ramifications and "Why is that?" to elicit facts. All primary and follow up questions should start with Who, What, When, Where, Why, How, Can we, How could we, Is, If, ... and their variants.
This is because answers to Who, What, When, Where, Why, and How describe and reflect reality while How could we, Is, If, ... and their variants elicit ideas and possibilities.
Questions About Your Return
1. Is the business paying me enough to meet all my short and long term needs? Should I still be in THIS business or can my investment be re deployed into something bigger and better? Is what I am doing still worth the time and effort it takes?
Questions About Financial Measurements
2. Are we measuring the right key performance and predictive indicators given what we need to achieve?
Questions About Customers and Products
3. What 20% of my customers buy the most from me? What 20% buy the least? What 20% give us the most problems?
4. What do we sell the most of and what earns us the most margin? What do we sell the least of and what provides the least margin?
5. Can we improve our Value Proposition and prices or otherwise increase revenues per customer and transaction?
Questions About Operations
6. What does our cash flow look like over the next week, month, quarter, year? How can we improve it?
7. What are our breakeven points in cash flow, income, and taking into account re-investment and profit requirements
8. What do we spend the most money on? What costs have increased most this year? How can we reduce our expenses without compromising my quality or service?
9. How much do we need to reinvest in the business and on what? What’s the smartest way to fund our business assets, our operations, our working capital?
10. What happens if sales fall by 10, 25, 50%?
© 2015 John B Voorpostel CPA, CA, CMB
iaccountant.ca
Communities of Practice
Insights and Know How
TeamStart Publishes Trusted Business and Financial Wisdom
TeamStart is a registered trademark owned by Info L inc. Copyright to articles indicated in article. The rest is copyright © 2016 Teamstart and Info L inc.