by MHolland | Nov 21, 2025 | Business Tips, Cash Flow, Systems
A number, on its own, is useless. Your weight, your revenue, your costs — none of it means anything in a vacuum. The power comes only when you compare it to something else.
You step on the scale. The number is meaningless until you compare it to last year, last month, or the goal you’re aiming for. Business works the same way. Your financial statements are just noise until you anchor them against other periods.
Comparisons Give Your Numbers Context
There are a few “must-do” comparisons every business owner should track:
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This month vs. same month last year
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This month vs. last month (best for non-seasonal industries)
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Year-to-date vs. last year-to-date
These comparisons turn isolated numbers into insights. But to make meaningful comparisons, your accounting has to follow one core principle.
The Matching Principle: Why Accrual Beats Cash
If you want to see reality, you need accrual accounting. Here’s the short version:
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Revenue is recorded when it’s earned, not when you get paid.
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Expenses are recorded when they’re incurred, not when you cut the cheque.
That’s the matching principle: match earned revenue to the costs required to generate it.
Cash accounting hides the truth. Accrual accounting reveals it.
The catch? Vendors don’t always send bills on time. You push them, you remind them — and sometimes they still miss the cutoff. Perfect matching becomes impossible, which leads to distorted month-to-month results.
That’s exactly why you need something more powerful.
Rolling 12-Month Figures: The Most Underused Tool in Business
If you want to see the real story — stripped of seasonality, noise, and timing issues — use rolling 12-month numbers.
Here’s how it works:
This eliminates seasonality.
This catches late vendor bills.
This shows true direction — not momentary bumps.
What to Track in Rolling 12-Month Format
Six categories will give you a complete view:
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Sales
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Cost of Goods or Cost of Services Sold
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Direct Wages
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Indirect Wages
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Sales & Marketing
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Operating Expenses
Put them on a graph.
Don’t bury them in a table.
You need to see the trend lines because trend lines don’t lie.
What Rolling Trends Reveal
The story becomes obvious the moment you graph it:
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Sales creeping upward? Good.
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Sales flat but labor rising? Productivity problem.
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Sales falling but headcount unchanged? Overstaffing.
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Operating expenses rising faster than sales? Your cost structure is drifting.
You don’t fix this with hope. You fix it with decisions.
If Costs Are Rising Faster Than Sales, You Have Three Levers
Only three. People fool themselves into thinking there are dozens. There aren’t.
1. Raise Prices — But Tie It to Value
Never raise prices because your costs went up.
No customer cares about your problems.
You raise prices when you improve value:
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Faster turnaround
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Better service
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Guarantees
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Higher quality
If you haven’t earned the increase, don’t take it.
2. Increase Volume Without Increasing Cost
Classic scalability:
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Better processes
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Better marketing
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Better tech
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Better throughput
More output with the same cost base.
3. Improve Productivity or Supplier Performance
This is the operational grind:
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Better labor allocation
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Better training
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Better suppliers
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Better pricing
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Cutting dead weight
Rolling trends will show you exactly where the rot is starting — long before the fire starts.
The Real Power: Early Warning Indicators
Rolling 12-month numbers give you a 30,000-foot view of your business. They smooth out seasonal bumps and compensate for imperfect matching. They reveal direction — the thing every owner needs most.
They won’t just tell you what happened.
They’ll tell you what’s coming.
And if you’re serious about running a healthy, profitable business, that’s priceless.
Thanks for reading…
by MHolland | Nov 14, 2025 | Business Tips, Cash Flow, Systems
Business owners mix up cost and value all the time — and it’s wrecking their pricing strategy.
Costs go up, and the default reaction is predictable: “We need to raise prices.”
Here’s the uncomfortable truth:
Your customers don’t care about your costs.
They care about what something does for them.
And nothing drove this home for me more than a chair.
The $2,200 Chair I Actually Want to Buy
I was shopping for an office chair the other day and found one that was insanely comfortable — like, life-changing comfortable. Sleek design, perfect ergonomics, the kind of chair that makes you think, “Okay… maybe my spine is worth investing in.”
I asked the price.
$2,200.
For a chair.
My first reaction?
“Are you out of your mind?”
So I asked why it was so expensive.
The salesperson didn’t flinch: “Made in Germany.”
That got my attention. German quality usually means engineering, durability, pride of workmanship. I went home and researched the brand. Turns out they hand-build their chairs, obsess over quality, and back it with a 12-year guarantee.
Suddenly… it didn’t feel crazy.
It felt earned.
My perceived value skyrocketed because nothing else I tried came within a mile of the comfort and build quality. And because I work from home, this wasn’t a splurge — it was an investment.
And here’s the kicker:
It’s still just a chair.
This family-owned German company isn’t competing on price. They’re competing on value.
Design: One of the Most Underused Value Levers
Stunning design is value. Full stop.
Furniture with beautiful lines, materials, and craftsmanship always costs more because beauty itself is a feature. When you combine that design with high build quality, you carve out a category where competitors simply can’t touch you.
That’s what premium pricing looks like.
So How Do You Raise Prices Without Losing Customers?
Simple: Increase value, not excuses.
Your rising costs are your problem, not your customer’s.
Your value proposition is their reason to pay more.
Here are the levers that actually move the needle:
1. Create a Unique Value Proposition
If you build products, where’s the value?
Your value prop should be something people can feel immediately.
2. Bundle in a Way No One Can Copy
Bundling works when the bundle itself becomes the differentiator.
Not “three things in a package.”
But a curated combination that solves a problem in a way your competitors can’t replicate without overhauling their whole business.
3. Offer a Guarantee That Means Something
A real guarantee is a value booster because it tells the customer:
“We stand so firmly behind this that we’re absorbing the risk.”
A strong guarantee forces operational excellence.
If you underperform, the guarantee will bleed you.
So you raise your quality, your consistency, your standards — and pricing follows naturally.
4. Deliver Service That Makes You Untouchable
This one is massively underrated.
A business recently impressed me through WhatsApp, of all things:
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Fast responses
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Detailed answers
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Professional tone
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Deep product knowledge
I checked Google reviews later — almost all 5 stars, and not a single person mentioned price.
All the praise was about service.
Contrast that with most businesses today:
Try phoning them. Good luck.
Try messaging them. You’ll age a decade waiting.
Too many companies treat phone calls or WhatsApp messages as an interruption, not an opportunity. Meanwhile, the customer with the most money — the one who could’ve become your biggest buyer — leaves before you even knew they existed.
The Bottom Line
You can’t raise prices because your costs went up.
You raise prices because your value went up.
That German chair didn’t get to $2,200 by accident.
It got there because:
That’s how you escape the race to the bottom.
Thanks for reading…
by MHolland | Oct 17, 2025 | Business Tips, Cash Flow, Selling Tips, Systems
Why Are Business People So Price Sensitive?
If I walked up to ten business owners right now and told them to raise their prices 5%, what do you think they’d say?
“No way! My customers will leave!”
Then comes the usual backup excuses:
“My competitors already charge less than me!”
All your competitors?
“Well, no… but a lot do.”
That’s where the thinking goes off the rails.
Price only matters when everything else is equal. The only time price is truly the deciding factor is when you’re selling a commodity—or when an entire industry has trained its customers to shop solely on price.
Most business owners act like they’re selling a commodity when they’re not—at least not in the eyes of their customers.
When You’re the Customer
When you shop, do you pick solely based on price? Rarely.
If all else is equal, sure, you might go cheaper. But in most cases, you’re looking for:
And when those things show up, price stops being the main issue.
The Only Viewpoint That Matters
If you’re basing your prices on one of these two perspectives, you’re dead wrong:
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Your cost structure
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Your competitors’ prices
The only perspective that matters is your customer’s perception of value.
When you buy something, do you care what it costs the seller to make it? Of course not. You’re focused on the value it gives you.
Imagine someone saying:
“Our prices are higher because our utility bills and staff costs went up.”
Crazy, right?
Customers don’t care about your costs—they care about the outcome, the solution. People don’t buy a drill; they buy the hole the drill creates.
Why Customers Really Leave
Here’s what research shows about why people stop buying from a business:
That totals 32%.
So why do the other 68% leave?
Perceived indifference.
That word perceived matters. Business owners often say, “We love our customers.” But if the customer doesn’t feel it, they leave.
It’s like a husband saying, “Of course I love you. If that ever changed, I’d let you know.”
It doesn’t work in marriage, and it doesn’t work in business.
You can’t assume loyalty just because they’ve been with you for 15 years. If they stop feeling cared for or valued, they’ll move on to someone who shows them they matter.
What the Numbers Reveal
Let’s talk numbers.
Suppose your gross margin is 30%. That means your cost of goods sold is 70%.
If you discount your prices by 10%, you’ll need to increase your sales volume by 50% just to break even.
That’s a dead-end strategy.
Now flip it. If you raise your prices by 10% at the same margin, you could lose 25% of your customers and still make the same profit as before.
In reality, if you’re adding genuine value to loyal clients, you’re unlikely to lose much of anyone.
The Real Game: Value, Not Price
Most accountants push cost-cutting and discounting as the path to profit.
That’s a losing game.
Our approach?
We help clients increase their value package—so they can confidently charge more based on perceived value, not cost.
Because when customers see real value, price stops being the conversation.
Thanks for reading.
If you want to shift your business from price pressure to value power, start by asking yourself:
“What do my customers really value—and how can I show them they’re getting it?”
by MHolland | Oct 10, 2025 | Business Tips, Cash Flow, Systems
Most businesses produce, at minimum, a Balance Sheet and an Income Statement.
Beyond that, not much gets measured.
But how do you even know what to measure?
There are dozens of things you could measure — but that doesn’t mean you should.
For example, in our firm, we don’t measure hours, even though we’re a professional service business.
We measure results — the deliverables promised in our Fixed Price Agreements.
Why?
Because people don’t buy hours. They buy outcomes.
And just like our clients, we don’t pay our contractors for time — we pay for results.
Step 1: Define Your Critical Success Factors
Before you can measure anything meaningful, you have to define your Critical Success Factors (CSFs).
Let’s break that down:
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Critical — without it, you fail.
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Success — it’s something you must get right to succeed.
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Factor — a fact or situation that directly influences a result.
Put simply:
A Critical Success Factor is something that determines whether your business will succeed or fail.
For us, it’s simple — if we don’t deliver results to clients, we fail.
If we just show up saying, “We worked 100 hours, please pay $X,” nobody cares. Clients pay for outcomes, not effort.
Step 2: Turn Your Success Factors into KPIs
Here’s the key point:
You can’t measure a Critical Success Factor directly — it’s too broad.
You can only measure a Key Performance Indicator (KPI) that reflects it.
Example: FedEx
Customers don’t care about logistics complexity. They care that the package arrives fast and on time.
FedEx figured that out by talking — and listening — to customers.
We did the same thing back in 1997.
When we asked clients what mattered most, they told us they wanted Fixed Price Agreements.
Why?
- They know the price upfront — no nasty surprises.
- They can hold us accountable for results.
Who Always Has KPIs?
Two types of organizations never skip measurement:
- Successful sports teams
- Successful large businesses
Both measure relentlessly against their critical success factors.
Imagine a sports team that doesn’t track player stats, win-loss ratios, or training metrics.
Impossible. They wouldn’t last a season.
Yet small businesses do this all the time — operating without real measurement beyond the financial statements.
Step 3: Discover Your Critical Success Factors
Here’s the simplest way to uncover them:
- Find what frustrates customers in your industry.
Ask: what do people hate about working with businesses like yours?
Take contractors, for example.
Most homeowners complain about:
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Showing up late.
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Leaving a mess.
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Sloppy work.
Now imagine the opposite:
Your team shows up on time, in clean uniforms, and leaves every job spotless — even using their own dustbuster.
You’d stand head and shoulders above your competitors.
2. Ask your customers tough questions.
Try these:
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“What don’t you like about our service?”
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“What are we getting right?”
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“If you owned our business, what would you improve?”
The answers are gold. That’s your roadmap.
Step 4: Build KPIs That Flow from Those Factors
Once you know what customers truly value, you can design measurable indicators.
Using the contractor example:
Your KPI could be the percentage of job sites that pass a post-job cleanliness check, verified by a daily photo or checklist.
Whatever your business, tie your KPIs directly to what customers care about most.
Step 5: Measure, Share, and Manage
If it’s not measured, it’s not managed.
And if it’s not shared, it won’t stay top of mind.
Build a simple dashboard with your KPIs and review it daily, weekly, or monthly — depending on your business rhythm.
Because what gets measured, gets managed.
A Few Core KPIs to Start With
Here are universal metrics that apply to nearly every business:
- Number of new customers each month
- Number of sales contacts or leads
- Conversion rate from leads to customers
- Average frequency of customer purchases
- Average transaction value
Track them. Discuss them. Act on them.
That’s how you move from running blind — to managing with clarity.
Thanks for reading.
If you take one thing away, make it this:
What gets measured gets managed. But only if you’re measuring what truly matters.
by MHolland | Jul 11, 2025 | Accounts Payables, Accounts Receivables, Business Tips, Cash Flow, Systems
Entrepreneurs tend to put all their attention on the Income Statement…
They want to know how much their sales are, their gross profit, and, of course, net profit.
What is the Balance Sheet good for? It does not tell you anything about operations, right?
Wrong.
Here is something you may not have known – the Income Statement lives inside the Balance Sheet.
The two statements are intricately linked, joined at the hip.
The Income Statement lives inside the Equity section of your Balance Sheet.
Think of it like this – Net Profit, or Net Loss lives inside the Equity section of your Balance Sheet.
How to Fix a Broken Income Statement
Whenever I have looked at an Income Statement that I suspect is incorrect, or just a plain mess, I go the Balance Sheet to fix.
In fact, the only way to correct a messy Income Statement is by going to the Balance Sheet.
Because…
All the Dead Bodies are on the Balance Sheet
Let us look at one dead body that ends up on the Balance Sheet and is the most glaring one.
Inventory.
Inventory and Cost of Goods Sold, which is on the Income Statement, are interconnected.
When you buy goods for resale, they go to the Balance Sheet, as an asset.
Once sold, they move to the Income Statement as an expense. If you have a real-time costing system that tracks when items are sold, then you will have few problems.
The system is tracking as goods are sold and moving them to your Income Statement, as a cost, or expense.
Inventory Hides a Lot of Dead Bodies
When you have manufactured goods, or grown plants in the case of a grower, you may not be counting inventory every month.
If your inventory is over-valued on the Balance Sheet, then your cost of goods sold (an expense) on the Income Statement is under-stated.
If cost of goods sold are understated, then Net Profit is over-stated.
You are happy at the high profits, and it is a fake high because a dead body is living on your Balance Sheet – inventory that does not exist because it has been sold.
When does that dead body get unburied? When you do an inventory count, often at year-end. By then it is too late. You have relied on 11 months of over-stated Net Profits. Your happy feeling comes crashing down.
Culprit Number Two – Bad Debts
The other big culprit hiding dead bodies on the Balance Sheet is Accounts Receivable.
Past sales that ended up as Revenue on your Income Statement, may now be living inside your accounts receivable, dead as a doornail. Uncollectable.
The fix?
Well, first, try hard to collect them, or even send them to a collection agency if you have to.
If they are dead, move them to the Income Statement as Bad Debt expense.
Most people wait until year-end to cleanup, giving false numbers on your monthly Income Statements.
Culprit Number Three – Deferred Costs
Often business owners will defer costs under the premise that there is future value in those costs.
In other words, current expenses get treated as assets.
But are they?
Is there value in those costs being capitalized on your Balance Sheet.
Unless you can sell those capitalized costs as an asset, write them off. Software development is something that could be considered an asset. Most deferred costs should be written off.
Culprit Number Four – Under-Performing Assets
Old, worn out and unused assets should be removed and written off as an expense to the Income Statement.
This is less common a problem and can be done once a year at year-end.
Culprit Number Five – Deferred Revenue
Some businesses report as sales what should go on the Balance Sheet as a liability.
When you receive cash for something not delivered yet, that is a deposit, and should be recorded on the Balance Sheet, as deferred revenue.
Only when you have performed the service or sold the goods should that be moved to the Income Statement as sales.
Culprit Number Six – Unrecorded Liabilities
It is important to ensure that all supplier bills are recorded as expenses in the month incurred. These bills are expenses and could overstate your Net Profit by under-stating your expenses.
Also, if expenses are recorded in the incorrect period, it makes your monthly Income Statements have wild swings. One month shows a big profit, the next month a loss.
Culprit Number Seven – Unreconciled Loans
Loans and mortgages that carry interest should be reconciled and recorded each month.
The interest expense needs to be recorded on the Income Statement.
The above seven culprits cover most of the dead bodies that might be buried on your Balance Sheet.
Thanks for reading…
by MHolland | Jul 4, 2025 | Business Tips, Cash Flow, Selling Tips, Systems
Yes, you read that right.
You cannot increase sales.
Not directly, anyway. That is because sales are a result, not an activity. You cannot manage sales, profits, just like you cannot manage even weight loss directly—those are outcomes. What you can manage are the activities that lead to those outcomes.
This might sound simple, but it is one of the most misunderstood ideas in business. Let us fix that.
Stop Managing Outcomes. Start Managing Activities.
Let us use weight loss as an example. You cannot just decide to lose 10 pounds. What you can do is manage your eating habits and increase your physical activity. Those are the drivers. The weight loss is a result.
Sales work the same way.
You cannot just declare, “We’re going to increase sales!” and expect it to happen. Instead, focus on the activities that create sales.
The 3 Building Blocks of Sales
There are only three ways to increase sales:
- Increase the number of customers (of the type you want)
- Increase how often they buy from you.
- Increase how much they spend each time.
That is it. Every sales strategy fits into one (or more) of those categories. Let us break them down.
Get More Customers (The Most Expensive Way)
When people say, “I’m going to grow my business,” they always mean getting new customers. And yes, it is important—but it is also the most expensive strategy.
Marketing, advertising, lead generation—they all cost time and money. Worse, new customers often require the most handholding.
So yes, keep attracting new clients. But do not stop there.
Increase Purchase Frequency (Often Overlooked)
Want a smarter way to boost revenue? Get your existing customers to come back more often.
They already trust you. They have already bought from you. This is low-hanging fruit.
Ideas to increase purchase frequency:
- Send a monthly or quarterly newsletter with promotions or insights.
- Offer loyalty cards or referral bonuses.
- Pick up the phone and check in with past clients.
- Host client appreciation events.
True Story:
An accountant blocked off every Friday morning just to call clients and ask how things were going. Nothing pushy—just open-ended business conversations. The result? His revenue doubled. Clients appreciated the proactive care and naturally brought him more business.
Increase the Average Sale (Mastered by McDonald’s)
You already know the question:
“Would you like fries with that?”
That simple upsell script has added billions to McDonald’s bottom line. What is your version of the fries question?
Ideas to increase average transaction value:
- Bundle products or services into higher value packages.
- Upsell or cross-sell relevant add-ons.
- Implement a small price increase (even 5% can have a major effect)
- Train your team to ask value-focused questions.
Real Example:
One client raised prices 5% after a little convincing. Guess how many customers they lost? Zero. Loyal customers did not blink, and the increase went straight to the bottom line.
Think Compound Impact
Here is where it gets fun: if you improve each of the three areas by just 5%, the result is a compound growth effect that can add 20–30% more profit to your bottom line. Without finding a single new customer.
Want to see it in action? Try this quick exercise:
Profit Improvement Plan (Fill-in-the-Blanks)
| Component |
Current Position |
5% Improvement |
New Position |
| Number of Customers |
___ |
x1.05 |
___ |
| Purchase Frequency |
___ |
x1.05 |
___ |
| Average Sale ($) |
___ |
x1.05 |
___ |
| Sales Revenue |
___ |
= |
___ |
| Gross Margin % |
___ |
(same or better) |
___ |
| Net Profit |
___ |
(should grow!) |
___ |
Now subtract your current net profit from your new projected one.
That is your Profit Improvement Potential—from managing the right activities, not chasing the result.
Final Word
Stop trying to “increase sales.”
Start doing the things that lead there.
- Get more of the right customers.
- Stay in touch and serve them often.
- Raise your average sale with simple strategies.
And most of all—track what matters. Because what gets measured gets managed.
Thanks for reading…
