Dear Linnea,

I'd like to welcome you to this edition of the Business Success Newsletter, dedicated to helping business owners build a better business...today!

This month we help you get refocused on making sure your company is profitable, as well as giving you some valuable information from guest writers Teri Milligan on QuickBooks Tips and Chris Olmsted on Employment Law to help you incorporate best practices into your business operations. 

Don't miss our schedule of Teleclasses and Webinars. Our monthly Businesses Getting Results series is open to the public as well as Advisors On Target clients.

New On Target Online Program!  Click on the Calendar Page on our website to see how you can receive a year's worth of teleclasses and access to online tools for one low price!  Current On Target clients receive these benefits automatically and do not need to sign up for the classes.  However if you are not already an On Target client, the On Target Online program is a great way to get started on building a better business. 

Wishing you a happy and profitable summer,

Linnea Blair

In This Issue

Upcoming Events

Quotable Quotations

Taking Control of Profit!

QuickBooks Tip

Reduce Your Risk

Upcoming Events:

The 4 Ways to Grow Your Business
Thursday, August 9, 2007 @ 1:00 PM Eastern 
(12:00 PM Central, 11:00 AM Mountain, 10:00 AM Pacific)

For more info. or to register for Tele-classes, click here

Quotable Quotations

Wherever you see a successful business, someone once made a courageous decision.

- Peter F. Drucker

'Profit' is what's left over after you've paid all your expenses. The important thing to note is that profit is 'what's left over'. PROFIT IS A RESIDUAL. It is a consequence of what happens in and to your business. Some of these things are within your control and some of them are outside your control. If you're going to have any effect on your profit, you have to focus on those things over which you have control. As it turns out there are four specific factors that determine profit and over which you have some degree of control. These are:

1. The PRICE you charge for the products and/or services you sell.
2. The QUANTITY (or volume) of products or services you sell.
3. The costs you incur directly in producing or buying the products and services you sell. These are referred to as VARIABLE COSTS because they increase or decrease as your sales increase or decrease.
4. The costs you incur whether you make any sales or not. These are called FIXED COSTS because they don't change with changes in sales volume, at least not on a day-to-day basis.

Many business advisors offer a profit improvement potential analysis service that works by running 'what if' scenarios on the business' figures to demonstrate how significant improvements to profitability can come about from just small changes in these four factors.

These usually start from using your current figures as base and estimating what would happen with a small increase or decrease. In the table below let's assume the current figures are in the BASE column and make a 5% alteration to give the figure in the RESULT column.

In this example, a modest 5% improvement in each factor (without any consequential unfavorable impact on any of the other three) would more than double your profit from $1,000 to $2,190. This is a 119% improvement in profit and from only a 5% improvement in each of the factors that affect profit.

It is evident that a relatively small % change in each of the four factors has a staggering effect on the resultant profit. And of course the reverse is also true. If you discount your price, allow your sales volume to fall, fail to control your fixed costs and let your variable costs get away from you, even by small amounts, you can end by destroying a profitable business.

Obviously to make the increases happen you need to review your operations in the areas that affect the figures - cost cutting, process improvement, more active marketing and so on. But the results can be well worth the effort and cost of implementation.

QuickBooks Tip - Using Auto-Recall in QuickBooks 2007 

By Teri Milligan, QuickBooks Consulting and Implementation

As business owners, 90% of what we do on a daily basis is the same.  The auto-recall preference in QuickBooks uses the system to auto fill your data entries, thus reducing the time it takes to enter transactions.

In QuickBooks 2006 and prior versions, once you type in a payee in QuickBooks and associate it with an account (category), the next time you type that payee, QuickBooks will automatically recall the information from the prior transaction, including the amount, the account (category), and any memo.

In QuickBooks 2007, this preference has been updated to give you two options:  One which is the auto recall preference from above, as well as a new option called "Pre-fill accounts for vendor based on past entries".  If you choose this option, QuickBooks will automatically recall the information from the prior transaction for that payee, as in the first option, but the only two fields it will remember is the name and the account (category) with which you associated it.

For example, let's say you enter a check for a telephone payment.  You type SBC as your payee, $22.35 in the amount field, choose Telephone in the Account field, and then type "Long Distance" in the memo.

With the auto recall preference, the next time you type SBC in the payee field, you will automatically get $22.35 in the amount field, Telephone in the Account field, and "Long Distance" in the memo.

With the second option or the Pre-fill preference, the next time you type in SBC in the payee field, the only field that will pre-fill is the account field of "Telephone".

To find the preference, click on Edit Menu, Go to Preferences, then on the left hand side, click on General.  In QuickBooks 2006 and prior versions there is a check box called "Automatically recall last transaction for this name".  In QuickBooks 2007 there is a section called "Automatically recall information" which will have the two options.

I recommend turning on the preference, no matter what version of QuickBooks you are using and in the 2007 version choose the "Pre-fill accounts for vendor based on past entries".

To learn how to use QuickBooksTM more efficiently in your business you can contact Teri at 619-463-6851 or by e-mail at teri@terimilligan.com.