Plain and Simple: Bright Business Insights January 2016 | Page 2

FROM GOOD TO GREAT

5 Ways You Can Improve Your Business
It’s easy to get caught up in the day-to-day operations of your business. After all, it’s
your business and you want to make sure that everything is running as it should. But
at times, it’s good to stop, take a step back and evaluate where your business is today
and where it’s heading. Here are five steps you, as a business owner, can take to ensure
that you are heading in the right direction.

1. Be The Leader You Want to Be.

As a seasoned business owner, you know your company inside and out –
when there’s a problem, you provide a solution; when a ball drops, you
pick it up. The best thing you can do for your business is to step out of
your comfort zone. Stop working in your business and start working on
your business. If you always find yourself in the middle of daily business
operations, you’re unlikely to get out in front of opportunities that could
maximize your company’s long-term value. Be the leader your company
needs. Stop putting out fires. Instead, start making waves.

by: Kyle Stemple

CPA, CGMA, Principal & Lean Six Sigma
Green Belt (New Philadelphia Office)
122 Fourth St. NW, PO Box 1020
New Philadelphia, Ohio 44663
[phone]

managers don’t understand the company’s cost structure, which puts the
company at risk of losing money in the long run.
• Budgeting and forecasting. Now that you understand your cost structure, have benchmarked your past results against your industry and know
what your KPIs are, now it’s time to budget and forecast. Do you know
your breakeven point? Do you know how a change in sales volume or
price will affect your bottom line? Budgeting and forecasting can help
you answer these questions and more.

2. Tell Your Story, Invest In People.

Why should people work for your company? What makes you different? 4. Find a Trusted Advisor.
What are you doing in today’s competitive environment to retain and A common misconception in the industry is that anyone with a CPA cerattract top talent? Start by being enthusiastic about your business, and tification can properly prepare a tax return. However, accounting industry
share you mission and vision with others.
regulations and tax laws are getting more complicated every day. That’s
why it’s important to work with a trusted advisor who completes appropriate training and maintains the knowledge needed to maximize tax
3. Embrace A Strategic Vision.
Every company should have a strategic vision. From financial objectives credits and deductions to minimize your tax burden, allowing you to reto operational goals, your strategic vision should provide your workforce invest the tax savings (allowed by the law) into your business.
with an overview of the company’s operational and growth initiatives.
Formal plans should also address the company’s budget and financial
forecast. Proper utilization of these plans will help you reap optimal
results by providing you with the information you need to make better
decisions. Below are initiatives you can include in your strategy to gain
greater insight into the industry and to learn how you can better manage
your current financial and operational objectives:

A trusted advisor is much more than someone who can provide tax planning and compliance services. This person understands business; more
importantly, they understand your business. They should be able to advise you in areas of business structure, business operations, wealth management, debt structure, capital budgeting, costing and all of the topics
noted above. Ideally, you should be talking to and meeting with your
trusted advisor throughout the year and not just at “tax time.”

• Benchmarking. Benchmarking is a proactive way to stay in line with,
or ahead of, the competition. Understand how your company stacks up 5. Processes Are Important – Consider Goin g Lean.
against the competition and gain insight into current trends, future oppor- The manufacturing industry underwent a significant transformation in
tunities and potential risks.
the ’90s with the wide-spread practice of Lean Six Sigma, which helps
companies become more efficient and effective by introducing better
• Key performance indicators (KPIs). KPIs are critical to the manage- processes throughout the organization. Many companies outside of the
ment of your daily operations. In order to deliver results, you and your manufacturing industry, however, have yet to incorporate Lean Six Sigma
management team must understand the resources you are working with into their operations.
and how you are affected. KPIs also provide management with insight
into production and can alert leaders to potential areas of risk. Financial Much has changed over the course of two decades and new uses for Lean
statements are not KPIs. Financial statements paint a picture of your pre- Six Sigma have been discovered as a way to improve businesses across all
vious month’s operations and are normally not completed timely enough industries. Consider Lean Six Sigma as a way to become more efficient
to address issues in real time. KPIs should be developed and monitored and effective in every aspect of your business. If you struggle to attract
daily or weekly to know if you are getting the results needed to suc- new talent, Lean Six Sigma may be just your company needs when you
cessfully run your business. These KPIs should be developed around need to do more with less.
employee production hours, number of service calls, widgets produced
daily/weekly, etc. If you know and understand what drives your daily or These are just a few of the ways you can begin to evaluate your business’s
weekly profit, there should be no surprises at month-end.
progress. If you own a company or if you want to explore ways to improve
your business’s efficiency, effectiveness, profitability and risk management
• Cost structure. It’s critical to understand your cost structure. Under- systems, call Rea & Associates. Our team is passionate about helping comstanding what it costs to make, distribute and sell each unit of each prod- panies reach new heights, mitigate risks and attract and retain employees.
uct line, for example, will give you a better grasp of how much you’re
spending on material, labor and overhead. This knowledge will better
equip you to allocate your efforts and resources. Unfortunately, many