Your top line is growing. Sales are up. The sales team is KILLING IT.
Things are firing on all cylinders.
You are excited about seeing your monthly P&L (maybe for the first time in a long time).
And then it happens. Reality hits hard, landing a huge punch…right in the gut…
Your top line is growing but your bottom line is getting smaller, and smaller, and smaller.
We recently helped a client discover a solution to this exact profit problem.
Thorough analysis helped us discover three important learnings.
- Gut checks can be good. Our client was convinced factors like direct and indirect labor costs, increased sales, and improved efficiency were important. Analysis revealed most of these factors had little to no connection to profits.
- The obvious move isn’t always the best move. Most leaders would push to decrease costs to fix the problem. Our analysis proved operations were already optimized and pushing efficiency any further would likely change nothing.
- Knowledge is power! Our analysis uncovered the main cause of the profit problem – overhead was growing faster than sales. Yes, the sales team was selling more (as in the number of jobs was increasing) BUT this increase was coming from the sale of smaller, less profitable jobs. Turns out these smaller jobs required a higher level of support and these additional costs were not being properly factored into the sale price. Net: they were selling more AND losing money!
The Best Part
Matt Murphy, one of our top analysts, described the situation perfectly.
Our client was working to solve the problem as best they could with the information they had at their fingertips. We helped them access a whole different layer of information about their business that was locked up in their data. They knew exactly what to do after that!
We are all doing the best we can WITH THE INFORMATION WE HAVE.
Our intelligence and analytics work helps you use the same information more effectively. We help you access the hidden details you can’t easily see when you’re just using your data to generate dashboards or reports.
The best part is – you (most likely have) all the information you need to start understanding your business more deeply – immediately.