Manufacturing Profitability – Strategic vs. Tactical

Experience and research show that 80%+ of manufacturing companies under $40MM+ in sales have tactical bookkeepers, controllers and even CFO’s.  They know how to pay bills, process payroll, send invoices, run their ERP systems, prepare accurate financial statements and work with their bankers. However, they DO NOT have the experience, knowledge or strategic vision to fully understand and manage the sophisticated product cost, overhead allocation, margin and cost-volume-profit relationships that would allow them to greatly improve profitability.

Most of these companies do not understand how to appropriately assign overhead to products, so they don’t understand true product, line of business and customer margins. This can lead to drastically reduced profits, and sales.

CPA firms audit manufacturers and help them reduce taxes, but they don’t have the knowledge, experience or time to help them with product costing, margin improvement and other financial techniques to help them improve sales and profits.

Many $5MM-$40MM manufacturing firms are doing well, but they don’t realize they could increase their bottom lines by another 1-3%, by implementing simple new financial tools.  The owners have no idea they are leaving dollars on the table and their CPA’s are not helping them with this. A simple 1.0% margin improvement to a $10MM company will improve their bottom line $100,000! The cost to educate and help owners implement these new concepts and strategies is a fraction of the potential new earnings.

As CFO, Rick helped two privately held manufacturers double sales (to $50MM and $80MM) and drastically increase profitability, each in four years. As a 13-year Partner with B2B CFO^®, the world’s largest CFO services firm, Rick has helped over 70 companies, including 18 manufacturers, improve financial management and profitability.  Rick teaches his clients Controllers and CFO’s how to analyze the business and think strategically .

Rick offers a complimentary, four-hour business analysis and GamePlan® for manufacturing (as well as non-manufacturing) companies.  This analysis, at no cost or obligation, will provide those companies with a road-map to increased profitability. Rick’s passion is to help owners of small and mid-market companies increase profits, (even those already doing well), by introducing them to new financial concepts and strategies that their tactical bookkeepers, controllers, CPA’s and CFO’s are not able to help them with.  You can contact Rick at rperrin@b2bcfo.com, or by phone at 608-576-3773.