The Path to Engineered Profit is our ‘How To’ Business Guide That Explains
A New Business Model for Small And Medium Sized Companies.
Learn to engineer your profit
Design more accurate profit goals
Get timely information on performance
Create budgets that really help
Train your employees to take responsibility
Run the company the way you want
Keep more of your revenue
Would you like…
to reduce your business risk?
to reduce the stress and worry associated with your business?
to know on an ongoing basis your progress to Profitability?
to have your employees be more responsible and accountable?
The emphasis of the guide is a New Business Model for an effective organizational structure and the development of fiscal controls and reporting systems. The effect of providing usable, timely, reports to key employees in the organization is increased accountability and increased profit.
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This guide will change the way you do business!
The guide and the accompanying workbook can be downloaded from this web site. The workbook contains nine modifiable Microsoft Excel files with detailed worksheets for many industries.
Businesses are generally good at what they do. Unfortunately, some entrepreneurs cannot find the right path to profit. The Path to Engineered Profit will show you a better way. We will help explain why your company is in the position it is and show you how you can improve your profitability. As an owner of a small to medium sized company, the insight you will receive can change your life.
Does this sound familiar?
The annual revenues of your business grow over time.
The profits of your company decrease on a percentage basis.
This lack of Profit can have very profound effects:
The overall Fun of Business is eroded
The vision is lost
You and your employees become less motivated
Relationships and marriages become stressed
Traditionally these traits and the downward spiral continue until someone or something identifies and corrects the company’s problems.
The following chart displays graphically the focus areas of the Guide. At the center of the chart we show the Goals of the Company.
Click HERE to view a more detailed version of this graphic
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Engineered Profit is achieved by creating a simple financial model for the company. Actual financial company performance is measured through Fiscal Control and Reporting Systems. The key concept is to develop systems that efficiently measure actual financial performance against the model and produce meaningful variances.
Both positive and negative variances are then investigated. Positive variances are examined to determine why and whether the trend can be continued. Negative variances are investigated to determine why and how this trend can be corrected.
To achieve the goals we begin with an organizational structure. The organizational structure provides accountability, delegated responsibility, and employee motivation. These goals are achieved by attention and modification in the organizational area of the company.
The organization represents a structure. On the structure we hang the systems:
New Business Systems
Operations Systems
Fiscal Control and Reporting Systems
Our guide explains basic organizational and fiscal control principles in plain English. The principals are solid, sound practices that can be applied to any business.
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ORGANIZATIONAL STRUCTURE
The organizational structure represents the employees and the interrelationships within your company. We identify and explain how to install 15 elements that need to be in place to control the organizational aspects of a company. The guide discusses setting up a program that prompts a gradual change in your corporate climate toward a “Self Directed Team” style of management. The results of this change will be an inverted or supportive organization structure, as opposed to an authoritative, downward domineering, structure. The guide develops the concept of a management team. The owners and key managers monitor, support, and are available to help employees within their sphere to achieve the tasks presented to them. Providing meaningful, understandable statistics to key employees allows them to hold themselves accountable. Employees that understand what is expected of them, and then are supported to achieve their results, usually attempt to meet the expectations. This creates a productive business climate.
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FISCAL CONTROL AND REPORTING SYSTEMS
This area is extensively developed. The guide develops an understanding of a Fiscal Control and Reporting System as well as how this information relates to employees and teams. For instance, in Chapter IV, Fiscal Control, a process is presented that can be used to develop a fiscal control and reporting system for your company.
In understandable terms the purpose of the company’s chart of accounts is outlined. From this financial “backbone” we explore how reorganizing and grouping accounts provides enlightening information. A sample Three-Year Revenue and Expense review worksheet is presented that shows a company’s actual performance over the prior three years. We explain trends and suggest possible reasons why these trends have occurred.
This is the starting point. A concept labeled a Basic Business Formula is presented and an understanding of the relationships between revenue volume, margin percentage, overhead, and profit is developed. A good number of businesses show trends of significantly increased sales revenues; however, the margin (revenue minus cost of goods sold) shrinks and the profits of the company, especially on a percentage basis, decrease seriously.
An example company, Excavating and Concrete Contracting, Inc., is used to help explain these principals and how the process of change could happen. A series of management team meetings with dialog from key characters is used to help personalize and convey this new way of reviewing financial data.
A budget workbook with profit center analysis is developed and discussed. This Microsoft Excel workbook is used to produce monthly reports on each profit center. The discussion continues to develop an understanding of job costing, explain how modern accounting software can efficiently provide ongoing financial feedback on job profitability. The use and importance of weekly key indicator or job status reports is explained.
The monthly and weekly reports represent the feedback required by the management team to constantly adjust performance to achieve the engineered profit goals of the company.
Some fiscal control tools are discussed in greater detail than others. These tools can be used to develop an understanding of setting project or profit center goals. We show how an understanding of the relationship of revenue volume, margin percent, and overhead applies to break-even, price sensitivity, cash flow, and several other planning tools.
The guide explains how to efficiently develop a financial model for your company.
The aim is to develop an understanding of how to develop a model and then a reporting system that will actually provide you with information that relates to employees and teams.
This process is developed to provide the engineered profit goals you desire and the fiscal control and the reporting system that are needed to keep everyone up to date on what is needed and what has been accomplished.
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The Workbook
Accompanying the guide is a valuable workbook. The workbook contains modifiable Microsoft Office Excel worksheet for varied industries. Again the worksheets provide a starting point toward the development of tailor made in-house management information systems.
The Path to Engineered Profit WILL change your life!
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