Recently I had a meeting with a relative young company. They were ecstatic! Their revenue had quadrupled within a year! (From $500K to $2.000K in quarterly revenue.) They could walk on water and fly to the moon at the same time. I showed them MoreReporting on their own data. Immediately we could see their phenomenal growth. However, their profit was a straight horizontal line ($80K per quarter). When pointing this out, they were in disbelief. So we went straight to the expense growth report, and were able to right away identify that their sponsorships had increased with 312% the last year, along with 5 other expenses that was not essential for the business. (Their CFO confirmed after the meeting that the numbers in MoreReporting are correct).
This is just one example of many that shows how important it is to be in control of your business.
You are selling a fantastic product and understand what your customers want. This leads to an intoxicating growth. But if you don’t understand how to control your business, a small fluctuation of your customer base can put you out of business in a short time. Let me give an example: If you increase both your direct cost related to the delivery and “funny money” simultaneously during this time of growth (lets take the entire company to Las Vegas for a week to celebrate! New iPhones to everyone! Lets sponsor the local baseball club – and the lemurs at the Zoo! Free blue shoes to everyone!), these not needed expenses will drag you down if one or two customers decides to leave. This wakeup call might come a day your accountant come into your office and tell you there isn’t enough money to pay salaries.
Because you are working 60 hours a week growing your business, you don’t want to waste time getting a business intelligence solution. And true, most BI solutions take a long time and effort to implement. This is not the case with MoreReporting. This has been critical requirement for MoreReporting since the very beginning: It must be fully automated and ready to use for the user within a few minutes. It must not require any setup, mapping or configuration. When you get into MoreReporting, you will right away see an overview of your profit, revenue and expenses last quarter and year to date. They will also compare with the previous period – or budget if you choose to setup one. If you want to understand the numbers better, there are report ready that shows you details of revenue and expenses – including what expenses have increased the most. With these few tools, you are now in control of your business. And as time goes on, MoreReporting will automatically notify if something seems to be out of the ordinary.
On a side note
If you one day want to sell your business, your business will be evaluated from the profit over the last 3-5 years. The buyers will want to see the money in the books and on the bank account. You can’t tell them that they can save on “funny money” when they take over. So not being in control of your business – and you expenses – can cost you a lot of heartache and money down the road.