Sitting in front of a potential new client this week, I was reminded how sometimes business owners can become very inward looking and focus just on their business, without really being aware of what their competitors are doing.
The lady in question ran a pub, which had a reasonable level of turnover for the size and location. However, her net profits were very poor and always had been. She just blamed it on “well that’s how things are in this business”. When I probed a little further and asked how she knew that, she just shrugged and replied “well I just presumed as all the Landlords I know are always moaning about being skint”
So in effect, she didn’t know that net profits should be poor, she just presumed it. Even worse was the fact that her existing accountants had not bothered to sit down and discuss this with her.
She had provided me with her last set of accounts and from that I analysed the figures, both against existing clients and against benchmarking data that I have access to from across the UK. We could quickly see what was wrong with the business and where the main problems and financial sticking points were.
If the lady in question puts only half of the suggestions we made to her into action, then she’ll be able to sustain a much better lifestyle in the future.
