Why bring in an outside perspective?
Leading a business can be an isolating role. Owners and chief executives make consequential decisions with incomplete information and few people against whom to test their thinking. Instinct carries a business a long way, but at some point it needs reliable financial evidence behind it.
SBA CPA serves as that sounding board. We combine your knowledge of your customers and your market with what we can see in your financial data, then help you decide on the next step. Because we work with clients in more than 50 industries, we can often recognize a pattern early and bring ideas that have already proved themselves in other businesses.
Where does a consulting engagement start?
It starts with understanding the business, not with a template. In the first meetings we ask what concerns you most, how decisions are made today and where you want the business to be in three years. These conversations often have value in themselves, because they create time to consider the business from a strategic distance rather than from within the day-to-day.
Next, we make sure the data is reliable. Many problems trace back to figures that arrive late, are coded inconsistently or are too summarized to act on. We establish timely, accurate data collection and connect it to the account you have given us, so that the numbers and the narrative align.
What can consulting help with?
Most engagements concentrate on a few of these areas:
- Strategy and organization: strategic planning, organizational development, change management and leadership alignment.
- Operations: process improvement, quality management, supply chain review and the controls that sustain those improvements.
- Profitability: pricing, true cost of sales, labor cost management and identifying unprofitable products, services or clients.
- Growth and restructuring: expansion planning, reorganization, financial restructuring and support for startups.
Where you need ongoing financial leadership once the project concludes, our virtual CFO service continues the work month by month.
What does this look like in practice?
Our single-trade construction case study illustrates the approach. The owner was generating about $300,000 a year in revenue and no profit. We began with confidential conversations to understand the concerns behind the numbers, then built a job costing system covering every project. Each job was analyzed at every stage, so the owner could see which work was profitable and intervene early when a project began to slip. Revenue grew to $720,000 a year and annual profit to $92,000.
The restaurant engagement followed a similar path at a larger scale. Establishing the true cost of sales through inventory control, portion management and recipe streamlining, separating labor costs by department, tightening scheduling and negotiating pricing with vendors made the business bankable. That, in turn, opened the way to growth from $3.1 million to $7.6 million in annual revenue.
A framework you can apply today
Before you change anything, sort the business into three groups by margin rather than by revenue. List your products, services or client types, and for each one estimate what it brings in and what it truly costs, including the labor and overhead it consumes. You will usually find:
- The core: high-margin work that warrants more of your time and marketing.
- The fixable: work that could become profitable with a price change, a process change or a stronger crew.
- The drain: work that costs more than it earns and may be worth phasing out.
A rough version of this exercise takes an afternoon. An accurate one requires accurate, current books and sound costing, which is where our accounting team and consultants come in.
How does consulting connect to everything else?
Consulting is most effective when it stays close to your financial data. Your consultants work alongside our accounting, tax planning and payroll teams, so a change in pricing, staffing or structure is reflected in your books, your tax plan and your payroll at the same time. If you are weighing a significant change, an introductory call with our client services team is a sensible first step.