Profit Gap Return on Investment (ROI), Part III
Profit Mastery’s cornerstone is the Scorecard – a strategic selection of metrics that when used on your business identifies critical elements that show how you fare against your own business goals as well as against your peers in your same NAICS code classification. And as you will see, when you think about it, your completed scorecard has a very obvious ROI.
There are literally hundreds of financial metrics that a company can measure to gauge their performance, but the collection found on the Profit Mastery Scorecard and supporting trend charts are the metrics we believe are most relevant and the most important to measure regularly.
Profit Mastery recognizes that small businesses are almost always resource strapped and do not have the bandwidth to calculate even this small group of metrics on a consistent and regular basis. Profit Mastery teaches small business owners and their staff the fundamentals on what these metrics mean and how to us them, but the math to do them is often confusing and prone to errors as few business owners are accountants.
The math should not be the focus for a small business owner… rather the focus should be on the results of the math and what it tells you. We have found through interviews with of Profit Mastery students that when they return from the class they believe they are equipped to do the math, but when they go to do the calculations they get bogged down and just cannot find the time to do it correctly.
For example, the first metric on the Scorecard is a balance sheet ratio called “Current (Ratio)”, a great measurement that shows the ability of a business to re-pay short-term debt. This seems to be simple enough – you look at your Profit Mastery notes and see the equation is:
So now you have to figure out what the “Current Assets” are as well as “Current Liabilities”.
For an accountant that is simple but for you (the owner) to figure it out takes time. It has been estimated that even a competent accountant would take about 30 hours to build a complete Profit Gap report. Even if you were to pay a part time accountant as little as $15 and hour it would cost you:
This clearly takes more time and money than what Profit Gap would cost… plus the accuracy is highly improved, once again demonstrating Profit Gap’s significant ROI.
Additionally, the Scorecard in Profit Gap compares your performance against your peers something that would take time and research on your part to get such important data.
And one of the best features is the color coding helping you identify where your opportunities are for improvement. This feature can save a business owner a lot of time by focusing on real issues. Often once an issue is resolved the other issues will appear with the regular monitoring of your company’s performance with the Profit Gap Scorecard.
If you are a Profit Gap subscriber, please congratulate yourself…You have made a very worthwhile investment with Profit Gap and regular use of the reporting system will continue to provide rewards of time, money and peace of mind.
If you are not yet a subscriber: we suggest you take advantage of our 30-day free trial offer. Letting Profit Gap do the math for the Profit mastery system may turn out to be one of the best on-going investments you could make. It will,
- Find efficiencies in your business that will save you time and money,
- Compare your company to peer organizations to learn how you stack up against the competition.
Perhaps best of all, the return on investment on your FREE trial is infinite!
CEO, FinancialSoft, Inc.