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Forests and Trees

In running a business, it is sometimes hard to see the forest through the trees. We are trained to look at the numbers and see more than amounts. Financial information is a tool that, when understood and analyzed properly, can provide a remarkable amount of information.

The owner of a successful public relations firm wanted to know how to take her business to the next level. By carefully looking at the two-year financial comparisons, we noticed the client was generating a growing amount of revenue from “Events”, but the costs involved in the events was almost as great as the revenue. In addition, since the events were so time consuming, the revenues from other service lines dwindled. By analyzing not just the revenue, but the expenses associated with each division and service provided, it became clear that other divisions were much more profitable than the events. The next year, the client cut out almost all event planning, and while revenue was flat, profits increased 20%.

Another client, new to our firm, was looking for ways to reduce costs midway through the year.  We looked not only at the client’s historical financial data, but also industry data. After a line-by-line discussion with the client, we were able to suggest ways to save substantial costs. In addition, by helping the client to focus, not only on cutting expenses but also growing revenues, a marketing program was embarked on that produced very good results for the client.

Knowing how to interpret the numbers can make all the difference!