A program for carving out bigger profits
BDC recently launched COMPASS, a diagnostic tool that helps entrepreneurs quickly identify ways to improve their profitability and liquidity. Laura Sowden, director of core consulting markets, answered some questions about this new product.
Why did BDC introduce COMPASS?
BDC wanted to develop a tool to help companies analyze their financial progress and compare it to industry averages. COMPASS also allows you to see what can be improved and how those improvements affect the bottom line. In the end, you get a tailor-made plan to help your company meet performance and growth targets.
How does COMPASS work?
In a challenging economic environment, it's important to get a grasp of your company's current financial state and track your progress carefully. And that's where COMPASS comes in. First, it helps you to understand your financial situation. Then, once you've gathered and analyzed the data, the next step is to dig even deeper. For example, you could look at your margins by product, pricing policies, accounts receivables or cash flow processes. Put simply, we help you to understand and transform your financial statements from static documents into dynamic indicators of performance that support your day-to-day decision making.
What areas typically can be improved?
There are always opportunities to improve your financial performance. For example, you can implement better costing systems, increase your inventory turnover or save on interest by better managing cost flow. COMPASS helps you to pinpoint these opportunities and see how taking advantage of them will help your bottom line.
How is a BDC consultant involved in the process?
COMPASS is an interactive coaching experience. You'll be working with a BDC team with strong financial analysis skills and a history of success with small and medium-sized businesses. You'll get an objective point of view, as well as tools and training to make concrete changes and see results.
Isn't it similar to other assessment tools at BDC such as the Growth Potential Assessment tool?
The key difference between this and previous tools is that COMPASS is quantitative. Every financial detail is measurable, which means you can easily see where you need to improve and measure your progress.
Is this a long process? Will my business see rapid results?
It's generally a three-week process and the results can be measured very quickly.
What does the action plan entail?
The action plan identifies the 20% of processes that account for 80% of waste in your company. We then work with you to establish realistic tasks, responsibilities and timelines for priority projects where you can achieve the greatest impact on profitability.
To sum up, what are the key benefits of using COMPASS?
You'll be able to see your company's performance compared to industry benchmarks. You'll also be working with experts who can give you an objective point of view and help you quickly identify ways to improve your bottom line. COMPASS provides detailed reports and an implementation plan outlining priority actions.
What's more, COMPASS produces measurable results. For example, you can increase profitability, improve profit margins, decrease costs and reduce bad debt. You can also make better use of your company's assets and free up cash that can be applied to loan principal.