The Power of Business Basics

"I’m proud of the success that we’ve achieved. I started the company five years ago and we’ve grown to 20 employees. We’ve got more Air Conditioning calls than we can handle and we’re developing a reputation for reliability and service. As we’ve grown, however, our financial reporting had just gotten more complicated. I was so busy focusing on growth that I hadn’t paid enough attention to profitability. And, I had gotten used to 'fuzzy' accounting. 

"I was introduced to Ellen by Al Levi, the business consultant we are working with to help us streamline our systems and develop our operations manual. As Al pointed out, the skills that brought us to our current level of success won’t take us to the next level. It was time to develop new financial skills. 

"Our financial reports had gotten so confusing. We use programs – QuickBooks and One Plus. The One Plus program is designed to enhance QuickBooks, a way to gather more information about customers and vendors. However, the 'magical' import/export feature was causing us to wonder, 'Which numbers can we trust?' As a result, my decision making wasn’t tied to any real financial information. No wonder we weren’t making enough money! 

"Ellen's suggestion: Get to KFP –" Known Financial Position". From there, she promised, we could make better, faster, more profitable decisions. 

"Ellen and Gail audited our Balance Sheet and Profit & Loss reports, and create a 'punch-list' of items to be cleaned up so that our accounting would be current and accurate. They provided a better Chart of Accounts, one that reflected our business and showed us how each division was doing. Their Chart of Accounts was about three pages shorter than the one we had been using. It was simpler and more informative. 

"Then, we created a Budget. We customized her Basic Budget to match our new Chart of Accounts and created sound selling prices for our Service and Installation divisions. We now have Goals for Sales and Expenses, company wide. 

"My controller, Craig, doesn't have a lot of formal accounting training. Ellen recognized that he had all the ability he needed to become a 'Big League' financial executive. She helped him validate his understanding, and showed him how to track the few numbers that make all the difference. Ellen worked with me, Craig and our accountant to clean up the financials and make sure that we were all on the same page. Also, we gained understanding in how our One Plus system interfaces with QuickBooks. No more mysteries! 

"Ellen's advice, 'If you don't understand what you are looking at, ASK questions and keep asking until you get clear answers. Accounting is easy, simple, basic…if it gets fancy, you can get confused, or worse, get in financial trouble. When you understand the financial reports, you can be more responsible. You can be a better steward of your company."

"Now, I know exactly where I stand financially. We are at KFP! Every week, we go over the Financial Quick Check. We can match our Goals to our actual performance and see whether or not we making any money. And, if there is a problem, we can target the area of the business that is causing the problem and fix it. Now, there is no excuse for not being profitable every month. When you know the score while the game is on, you can improve the score. I've set a policy at our company: We make a profit every month. By the third week of each month, we are focused on our plan for offense (SALES) and defense (controlling the 'BIG ROCK' expenses) so that we can WIN.

"Currently, we are in the KFP Graduation program. Ellen gave us a ‘"Thumbs UP" on our financials last month. As Ellen says, we are “"Big Boys"” now that we are in control of the numbers and the money. It's nice to know that she follows up and makes sure we implement the lessons we’ve learned. 

"The biggest surprise working with Ellen? How much fun it can be to get to KFP." 

Wayne Beck, Aladdin Air Conditioning Company, Sherman Oaks, CA