Consultant In A Box

Entrepreneur, April, 1999 by Cassandra Cavanah

Smart programs answer your finance and marketing questions.

AS AN entrepreneur, you may consider a business consultant a luxury--something that would be great to have but about as likely as waking up to find a Rolls Royce in your drive-way. At a cost of anywhere from $100 to $500 per hour, business consultants aren't often found sitting around the kitchen table working with the typical entrepreneur to iron out why the cash flow every August is so dismal or analyzing the effectiveness of a direct-mail advertising piece as compared to its cost. There are a plethora of consultants who can help make your business successful--the problem is being able to afford them.

Now, with the help of some innovative software makers, there are a few new, affordable tools out there to help keep your business on track.

FINANCIAL FACTS

If your business is running in and out of the red, Business Analyst from RedFlag Inc. may help. This program was designed by a husband-and-wife team of business consultants who realized a software program would enable more business owners to take advantage of the type of services they offer.

Business Analyst's formulas are designed to examine your company's accounting data (and inventory, if applicable) and determine where you can make improvements to increase your company's bottom line. Comprehensive analyses of your financial status--including obligations, assets and liabilities--paint a clear picture of your company's financial health.

Two user-friendly manuals come with Business Analyst. The smaller of the two focuses on interpreting your company's data and is full of the kind of insights you'd pay a consultant to impart.

For example: "Days-Average Collection Period: This is the average number of days it takes to collect receivables. A rule of thumb here is to ensure no more than 10 percent of your annual net sales are outstanding at any point in time. The best position if you have a net 30 policy is for receivables to be at 30 days."

You can import financial data from most major accounting programs, such as Intuit's QuickBooks and Quicken, Peachtree Accounting, and Microsoft Money, or you can input the necessary information on your own. The import process is some-what tedious, but once the data is safely in Business Analyst, you're ready to begin. The manual takes you step by step through the reports as you view them.

Business Analyst offers several ways to view the data, giving you plenty of angles for assessing your company and allowing you to compare several years worth of information. Some of the reporting functions you'll find are income statement, balance sheet, break-down of break-even points and employee information. (This is a chart that covers how many employees you have, their rate of turnover and the cost to retrain new employees.)

Business Analyst ($89.95) runs only on Windows 3.1/95/98/NT 4.0. If you're interested in a demo, visit www.redflag.com.

If you're not ready to dive into such a complex program, Microsoft Office 97 Small Business Edition (www.microsoft.com/office) has some tools worth investigating. Financial Manager 98 lets you set up "what if" wizards to check out the financial impact of business decisions. For example, there's a break-even analysis tool that lets users manipulate prices, variable costs and fixed costs to find break-even and profit points for a product. This program has one drawback, however: it lacks the ability to view data from multiple years--something Business Analyst can do with ease.

BECOME A MARKETING MAVERICK

Another area in which small-business owners often need advice is marketing a product or service. Many entrepreneurs jump into the ring with a new product without doing extensive market research or analysis. Although sometimes such a strategy works by creating a buzz around a business that succeeds when all the experts thought it would fail, more often than not, this flying-by-the-seat-of-your-pants approach will hurt you. Instead of acting on sheer instinct, try using Business Resource Software's Business Insight. This program is designed to answer key feasibility questions such as, Can you compete in the marketplace on price and features? How much will you need to invest in marketing? What market segment is most likely to purchase what you have to offer?

Business Insight will ask you close to 500 questions about your product, the market you're in, your competition and so forth; analyze your answers; and then assist you on your strategy. A "Quick Start" feature limits the process to about two hours--one hour for input and one hour for initial feedback.

Getting to work with Business Insight is simple. Installation took me just a few moments, and the overview of the program was easy to follow. Within minutes, I was analyzing the potential success of a new service-based business I was planning. Just a note: Although the questions appear simple, they require significant knowledge about your personal and professional goals for your company.

The program includes knowledge culled from more than 100 experts in marketing, planning and strategy. There are more than 35 charts and graphs to help you visualize your strategy and links to over 100 Web sites that specialize in marketing and planning.