Financial statements can paint an important picture for use in managerial decisions. Some examples of ways that business owners can use financial statements include:
To analyze past performance – Financial statements can be a powerful diagnostic tool business owners can use to evaluate their firm’s strengths and weaknesses. This can pinpoint areas that require more focus
Increase Profits – Analyzing the trends of certain expenses may help flag areas that can benefit from cost reduction strategies for an increase in profits.
To budget for the future – Financial statements can be used to determine your future expenses, and the required sales level to meet those needs as well as to budget your short term cash requirement.
To make strategic decisions – Financial statements can help business owners make the decision of whether or not to invest in new equipment, expand or contract the size of operations, to move to a larger or smaller facility and much more.
To determine employee bonus structure – Profit sharing is a great way to provide employee incentives. Your financial statements can help determine the structure of an employee benefit plan and if there is enough profit and cash to implement this incentive.
So the next time you get your financial statements back from your accountant, why not sit down and review them for a while, you might discover something you didn’t know.
This article originally appeared in the April 2011 edition of The Beal Business Advisor. The newsletter also includes:
- Buying a Business
- Selling Your Business
- Quote of the Month
- Businesses Available for Sale and
- Events.
Check it out here.
About Beal Consultants, Business Growth Professionals
Focused Business Advisors
Beal Consultants helps people buy, sell, value, improve, and start businesses. We deliver value-added services in the following areas:
Grow Your Business
We can help make your business grow profitably using proven success strategies, step-by-step guidelines and an abundance of insight from our experience in working across a wide variety of industries.
Insightful Diagnostic Report
Are you ‘too close’ to your business? Are you working too hard in your business you have no time to work on it? Do you need a second perspective, a fresh pair of eyes?
Using a proven methodology, we can come in, interview you and your key staff, review your financial results against industry benchmarks, and make concrete recommendations on how to improve your business.
Improving your business means more profit for you, more free time and, eventually, more value when you exit. Call today for a free, no risk initial consultation.
Strategic Planning
Strategy planning is NOT about creating 50-page documents that are never referred to again. Strategic (and business) planning is all about understanding how your business can grow and thrive in a challenging, competitive business environment.
You are competing against many competitors, not just your direct competitors, but all your indirect competitors as well. You are vying for attention in an increasingly complex and crowded marketplace. You need to clearly understand – and you need to communicate to your clients – your key value proposition – why should they do business with you? Understanding your value proposition is key to differentiating yourself in today’s marketplace, and is key to having a sustainable competitive advantage. Your business strategy and business success relies on having a crystal clear understanding of your unique competitive advantage.
Find out more here.
About Beal Consultants – Business Brokers
Focused Business Advisors
Beal Consultants – Business Brokers helps people buy and sell businesses. We deliver value-added services in the following areas:
Buy a Business
We provide counsel, guidance and support throughout all steps of buying a business including: Search, Screening, Valuation, Negotiation, Due Diligence, Financing and Agreement Structuring.
Sell Your Business
We provide counsel, guidance and support throughout the process of selling a business. Some of the advantages of hiring an intermediary to sell your business include: confidentiality, creating and executing the marketing package, negotiation, and buyer screening.
Succession Planning/Exit Strategy
Looking to retire? Great! Is your business ready for you to retire? Can you afford to retire? Do you know how to minimize your tax burden when you are looking to sell or pass your business on to your children? We can help you understand the options that are available to you. Think it’s too early? The earlier you start, the more your business can be worth, and the more options you have to minimize taxes. If you’re thinking of getting out within five or less years, start planning today!
Business Valuation
Need to know what your business is worth? We help you determine the value of it and understand the key drivers of that value, so you can know how to improve it.
