Businesses only care about 3 things

It doesn't matter what business you're in, or whether it's growing, coasting or in decline, there are only 3 things that should concern the owners:

1. Improving profitability
2. Improving productivity
3. Reducing costs

In a perfect world I'd like to see a senior manager with a title of Head of Cost Reduction, or Productivity Planner, or Profit Improvement Manager.

Instead most companies have no idea of individual client profitability, or productivity benchmarks for their industry. Why is this?

Because it's hard to calculate and then it exposes the truth of the current situation.

It's time to crunch those numbers

This type of analysis quantifies the invisible and shines a light into areas which many owners don't want to investigate.

Do you know how profitable your business was last month and how it compared with previous months?

I suggest the owners of a business or organisation should sit down and work out some of these numbers and then start to work to improve them.

As a general rule a good place to start is to ask for ROTA to be calculated. ROTA is Return on Total Assets.

Establish what it has been for the past 3 quarters and then seek a 10% improvement.

Image courtesy of adamr at FreeDigitalPhotos.net