You Can Drive Business Profit with a Mid-Year Operations Audit


Are your profits flat despite a bigger marketing budget? Here’s how you can regroup before Q4 with a mid-year operations audit.



So, you’ve installed an elite marketing program, but you aren’t meeting financial projections? Well, there’s one likely suspect – your internal operations.

Find out where your human-capital problems are, so you can implement profit solutions. Consider an internal operations audit.

It can spot typical operational challenges such as dysfunctional supply chains; failures in green-business practices; IT security issues; and unnecessary risks that threaten business disruptions.

ID-10063936 podpadUse an internal audit to unearth the problems with 10 strategies:

1. Be respectful of your employees — don’t endanger morale

Many employees get nervous any time a big boss or management consultant suddenly enters their space with a clipboard full of questions.

Treat employees as experts. Be diplomatic. Explain the overall reasons for the audit. First, meet with your leaders and get their feedback then meet everyone individually before considering staff meetings.

2. Encourage your employees to participate in the process

That’s accomplished by active listening with open-ended questions to get information. This isn’t about telling employees what they’re doing right and wrong.

You need to know the realities they face in the operational costs of their daily responsibilities. In addition, they need to know what drives profit to improve cash flow. See who knows about profit drivers and who doesn’t.

The solution: Start creating a partnership with your employees. If employees perceive that a partnership exists, you’ll be closer to achieving the desired results.

3. Make certain you have a distinct, companywide understanding of all your systems

Employees can’t perform well in chaos. Check to see if you’re employing best practices that include solid operations checklists.

4. Examine everything – don’t be complacent

Don’t omit any area. Check every phase of your business. That includes employee morale. High morale among employees propels profits.

5. Take steps to empower your employees

Don’t be afraid of negative news. Welcome it. You can literally power your brand with employees who aren’t afraid to speak.

“If you can’t explain it simply, you don’t understand it well enough.”

-Albert Einstein

6. Segue to profitable ideas

Don’t keeping focusing on the problems. Change direction.  Instead, encourage discussions for improvement in the challenges.

Ultimately, the goal is to motivate employees to offer profitable ideas, such as properly managing your inventory costs for positive cash flow. Remember, it’s a matter of principles, not finger pointing at personalities.

7. Double down – follow all salient areas and gauge your progress

You’ll need to know the most stubborn issues in order to save time and increase revenue. Your audit should reveal what’s changed and what hasn’t.

Hint: You can increase your business value with five basic business-process optimization strategies.

8. Continue to consider your employees’ perceptions

Not all employees will be on the same page with you for business growth. You can ease the process by dealing with their biggest concern – what’s in it for them – then, they’re more likely to cooperate enthusiastically.

Trust between management and your workforce helps. Implement leadership strategies for employee respect, and take steps to boost your employees’ morale.

9. Think and act like one of your valued customers

Your audit should consider your customers’ perspectives – what’s working for them, what isn’t and what would solve the issues.

Look for two common problems:

1o. Be pragmatic and balanced

Often, there’s a tendency to belabor the negatives without focusing enough on the positives. Make sure your reports are balanced.

If you’re not balanced, it will become unnecessarily difficult to market your changes to employees.

From the Coach’s Corner, related information:

8 Strategies When Sales Drop and Costs Cut into Your Profits — If your sales are down and costs are hurting your profits, you’re not alone. The irony is you can do something about it — with these eight tips.

13 Management Tips to Solve Employee Absenteeism — Absenteeism causes migraines for a lot of bosses. Obviously, your company will make healthier profits, if you don’t have an absenteeism problem.

HR Management – 8 Best Practices in Employee Delegation — Delegation is a fundamental driver of organizational growth. Managers who are effective in delegation show leadership. Here are eight best practices.

6 Steps to Implement a Cultural Change for Profits — If your company is lacking in teamwork, morale is poor and profits are weak, chances are you need to change your organization’s culture.

No one so thoroughly appreciates the value of constructive criticism as the one who is giving it.


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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.





Photo courtesy of podpad at www.freedigitalphotos.net

Tips on Understanding the Mindset of IRS Auditors



An IRS audit is enough to make you tense with cold sweat in the palms of your hands. More businesspeople have complained to me about the mean-spirited treatment at the hands of IRS agents than any other federal agency.

Worse, the agents’ frequent lack of common sense is shocking.

True, the IRS has over-officious, mean-spirited representatives. Believe it or not, the IRS Web site has comprehensive information that will help you to stay calm in dealing with the agency.

ID-10088767 stockimagesAll taxpayers have reasons to be suspicious of the agency.

That’s in the wake of the IRS scandal in which agency employees politically targeted conservative-leaning nonprofits when they applied for nonprofit status.

This should worry any thinking citizen.

That said, the agency does have level-head, reasonable employees — especially at the lower levels.

So, understand that the IRS isn’t a 100 percent, overbearing bureaucracy.

It helps to anticipate the aspects of your return that serve as catalysts for an audit.

You can stay practically stress-free and prepare for a reasonable dialogue – if you know what IRS agents want.

Seven tips to understand the mindset of IRS auditors:

1. They first judge on appearances. Make sure you look like a business. Organize your records so that they’re ready to be inspected. That means computer software and reconciled bank accounts.

2. Be able to accurately analyze your firm’s revenue and to present it if necessitated by an audit.

3. If you don’t have adequate internal controls, IRS agents will get suspicious. Many will get hard-nosed about your records, and expand their audit. Not only will they scrutinize every single minute detail of your return, but IRS agents are known to expand the audit to other years.

4. If you have benefited from bartering or trading products or services, know that the IRS wants to know about it because it’s considered income. Yes, even if you put something out to get something in return. Agents will stop at nothing – they’ll look high and low for evidence of your participation in a bartering club. So specify your bartering at fair market value.

5. Beware of how you assign income. Auditors look for evidence that taxpayers assign income to other businesses – to avoid paying taxes or to show a net operating loss. If you do assign income to another party, be prepared to show that entity’s tax returns.

6. Separate your business from personal records, and keep a record of your revenue and expenses. IRS agents will tally all your bank deposits and compare them to your sales. So keep careful records on whether you make personal deposits to aid your business for positive cash flow or a financial gift from relatives.

7. Keep computer records with copies of cancelled checks in all non-taxable income items that are deposited in your bank account. This should allay any IRS suspicions.

From the Coach’s Corner, here are more financial tips:

4 Strategies if You Fear Missing Year-End Forecasts How to strategically manage a financial crisis   Are you sweating over cash flow? Are you losing sleep over the prospect of missing your annual goals? Well, if so, certainly you’re not alone. Many business owners and executives have suffered from the same anxiety. But fear can be a great motivator for success.

Primer for Best Practices in Preparing Financial Statements –A good financial system is vital for your business. Not only will a properly prepared financial statement tell you what’s transpired in your business, it will give you a snapshot regarding your future.  Measurement of cash flow is paramount.

Checklist to Increase Your Startup’s Cash Flowre growing quickly, cash flow is paramount. There are at least 11 ways you can increase cash flow for your business to function properly.

Do You Know What Drives Your Profit? (There Are 4 Drivers) — For profits, entrepreneurs must learn how to manage their financials and performance, which are difficult tasks. Savvy business owners know who their ideal clients or customers are. Entrepreneurs realize financial benefits when their revenue from business exceeds their expenses and taxes. This results in a much easier task.

Accounting / Finance – Why and How to Determine Your Break-Even Point —  Uncertainty can kill hope in business. Best practices in management mean having the right information to alleviate uncertainty in business. For that you need the right tools. One important tool – know your break-even point (BEP). A BEP analysis should be an integral part of your financial planning.

“We’ll try to cooperate fully with the IRS, because, as citizens, we feel a strong patriotic duty not to go to jail.”

-Dave Barry


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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.





Photo courtesy of stockimages at www.freedigitalphotos.net

Seattle business consultant Terry Corbell provides high-performance management services and strategies.