We have some new tools to help our clients make better business decisions in the coming year!

By Heather Gurewitz
Mendocino Women's Business Center Director

The holidays are a busy time for our clients. People seem to be putting their business plans on hold or working hard making those last end of the year sales. Which, I have to say is great, because it leaves me some time to investigate some of the resources that are "at our fingertips." I learned about a lot of great things at the Association of Small Business Development Centers' Conference back in September, but with all of the classes and training, I haven't had a chance to investigate further...until now!

By far the most exciting thing I have come across yet, is an online tool that was recently made available to California Small Business Development Centers (SBDC) called ProfitCents. Created by Sageworks, this is an online information system that provides industry specific financial information based on industry codes (NAICS).

In plain English, that means:

We can perform an industry specific business analysis for our clients by comparing their finances to other businesses in their industry across the nation. It also means that when someone is starting a business we can use up-to-date information to help them figure out if their projections are reasonable compared to other businesses.

Accessing data is only part of what we get from ProfitCents. The system has some very advanced financial analysis tools that allow us to look at the operating model of the business and determine how changes will affect profits and cash flow by creating a variety of different scenarios.

So, how does this all help the business owner?

Example: If a business owner feels that they are always low on cash and have high debt financing, we can take their information from their profit and loss statement and their balance sheet and compare them to other businesses in the industry to find out what areas might be potential for improved performance. Should they be reducing inventory turn days? Should they be collecting accounts receivable faster? Should they increase their pricing? Then we can create projections for the business where we can see the impacts of these actions.

I should note that we have always created projections for our clients and helped them to look at all these factors, but now, with ProfitCents we are able to offer a much more sophisticated system. Also, with the industry data, we can figure out if the assumptions are realistic. For example, if we determine that the business needs to increase their profit margin by 10%, we can look at the other businesses in the industry and compare the average profit margin.

The bottom line...

We have some REALLY cool new tools to help our clients make better business decisions in the coming year!

More information on the availability of ProfitCents will be available in late January, 2011.