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Dissecting Your Business

Holiday Season Pop Quiz: What does Santa and the Jolly Green Giant have in common? Answer is at the end.

Back in the late 1970’s the first transcontinental highway (I90) was near completion. The last section to be completed was in Blue Earth Minnesota. In typical American fashion, someone saw an opportunity to turn the completion into an event. Paul Hedberg, a local radio station owner, convinced the Green Giant company to allow him to erect a huge Jolly Green Giant statue, standing at 55 feet tall. The statue would be temporarily placed right by the completion site of I90. Later it would be moved a little farther away, but still close to the highway. The giant statue’s arms stuck out so far, they needed to dissect it into smaller parts just for the trip from the manufacturer to the I90 completion site.

So, what does this have to do with running your business? Well, let me tell you.

It’s very important for business owners to review their financial statements and their business metrics. What’s also important is to consistently try to look at your business in different ways. I like to call this “Business Dissection”. It would be perfect to think about your business differently all the time, but that is not reality. So, get something on your schedule at least quarterly to focus on this.

Here are a few areas to look at when trying to dissect your business:

  • Customer Profitability – How much do you make on each client? If you’re new to this, try making some quick calculations to determine a rough idea.

  • People – This area can be difficult, but it’s also the most critical. Break your people down into functional groups, then determine how productivity can be measured in each of these functional areas. Put the right systems in place, then dissect the information.

  • Balance Sheet – Bad things hide in your Balance Sheet like, incorrect balances, obsolete inventory, uncollectable receivables, unaccounted for liabilities. All Balance Sheet items should have supporting detail. Each item should be managed to make sure things are going in and out properly. Start by focusing on the line item that you are least comfortable with and start dissecting it.

Challenge yourself to look at your business in different ways. This will help you deliver business optimization with a clear path forward.

Answer: “Ho, Ho, Ho”


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