Business Decisions: Taking The Necessary Time To Evaluate
Mar 02, 2016
We apologize for our lack of posting. Bill and I have been busy working on an engagement to determine if a given business location should be shut down. As it stands, the location is not profitable. It would be easy to say, if it is not profitable eliminate the location and stop adding to loss. However, it is not quite that simple. I’m sure any business owner can think of a time when you considered scraping an idea, but then it ended up being profitable.
This is not to say if you have a product line, a customer, or even a process which is not producing a profit that you should continue on. Instead, do not be so quick to react regardless of the decision you make. It is imperative to take the appropriate time to perform the necessary analysis to determine if there is a different method or approach to be taken. Sometimes it is not the idea that is poor, it is the execution.
These are not always easy decisions to be made. Any business decision always has impact, whether it be positive or negative. Taking the time to analyze and reflect gives you an opportunity to evaluate various scenarios and determine what is best for your business. I for one think it’s quite exciting to peel back the layers and have all the relevant information in front of you.
You may discover there is a different method to run a location, or way to cut costs, or even increase sales. Without doing a proper analysis, how do you know? Also consider what could be lost if you stop doing what you’re doing. Are there credits you are currently able to receive which may be eliminate? Are there losses to take advantage of that would be lost?
Do not just give up without a comprehensive review and analysis of all possible scenarios.
Categories: Cost Accounting