General Interest

In the 2009 feature film, Sherlock Holmes, the famous detective works frantically to put together enough clues to solve the mystery of what is about to happen, before it happens.  If he can solve the riddle in time, and then predict what could happen, he can then change what actually happens. Wouldn't it be great if we could pull this off in real life when it comes to what will happen with our firm's profitability?  In other words, be able to predict it, and thus buy ourselves some time to improve the situation, if necessary? Well, we can. (more…)

Picture the firm as a car racing down the road, pedal to the metal. A torrent of information rushes at us as we drive. We can see where we’re going by looking out the front windshield.  That's our immediate future. We can see where we are right this moment by looking to either side.  The present. And we can see where we’ve been by looking at the rearview morror.  Our past. Okay, that’s a cute analogy, you say—but how does it help us manage the firm? Here’s how. (more…)

The fortune-teller peers into her crystal ball and claims to see the future.  Who knows what she is really seeing, if she sees anything at all.  Perhaps she is making up the story as she goes.  If we could see the future for ourselves, she'd be out of business. Let's do that-- let's create a way to see our own future. We just need our own crystal ball. (more…)

This would seem the perfect time for an Easter egg analogy. Gather 'em up, put 'em in a basket. And count 'em up. Each one is a little unique, different from the others.  But still an egg. Last week, we began describing the concept of forecasting revenues and expenses.  Let's start with revenues. For the sake of our egg analogy, we're going to treat each of our revenue-generating projects as an egg.  Large and small, beautiful or ugly, let's identify them all, and yes-- put them all in one basket. (more…)

We've got to get organized here! Okay, admittedly, that was a pun. I'm not proposing that we organize a labor strike, but rather, that we quantify our firm's labor. We're interested in labor dollar signs, not protest signs. (more…)

Keep those receipts! We've got to explain to our persnickety accountant what we spent, and why. But will we be able to tell him what we're going to spend next month, and why? That's impossible to predict, right? Sure we can.  For the firm as a whole, anyway. (more…)

Following the last three posts, we can now finish our exercise in creating a reliable, and ongoing, predictor of profitability. Admittedly, for some, this can be a rather dry topic area. Nevertheless, as we discussed in Solving the Profit Riddle, it is much, much simpler than the blackboard calculations in the photo, and it can bring great insight into the firm's financial stability. (more…)

We've got to get the story. And then report it.  Quickly. Eventually just isn't good enough. Good financial management requires good financial reporting. Good doesn’t necessarily mean exhaustive. But it does mean timely. (more…)

We need to discuss a gross subject. Fees. Gross Fees, to be precise.  Gross Revenues, if you prefer. As in the study of gross anatomy in medical school, we can learn a lot through dissection. So, let's dissect our subject. (more…)