Long Island Business News
Friday, September 8, 2006

Conquering the terror of the numbers monster
By Adina Genn

Quarterly financial reports typically contain critical information owners need to run a business. But such information wasn't enough for Maureen Borzacchiello to plan for growth.

"I knew I should delve further,"said Borzacchiello, owner of Lynbrook-based Creative Display Solutions, a provider of trade show displays and exhibit design services.

Borzacchiello spent much of 2006 delving further in her quest to break $1 million in sales. She is a winner of the 2005 Make Mine a Million Program, a joint collaboration of American Express and non-profit organization Count Me In, which together provide financing and business advisors to help women hit that $1 million sales mark. It was while working on her business through mentoring and coaching that Borzacchiello realized she needed to intimately know her numbers. Up until that point, Borzacchiello was in territory familiar to most owners. Though entrepreneurs are in business to make money, they often start a venture because they are passionate about delivering quality goods or services. Accounting skills are not necessarily one of their strong points.

But learning those skills can pay off. Once Borzacchiello became proactive, for instance, she learned to run weekly reports to determine when she could add staff and also catch errors in real time, rather than learn about them after the fact.

Reading profit and loss statements, balance sheets and cash flow reports on a weekly basis puts Borzacchiello at ease and enables her to forecast better. To Borzacchiello, quarterly reports are "historical data;"by the time an owner finds out about a crisis, "it could be too late,"she noted. That doesn't mean there won't still be urgencies, she said, but at least, "I see it coming."

Now, for instance, Borzacchiello catches open receivables and acts quickly on them, rather than being forced to dip into reserves, or tapping a line of credit, in order to pay vendors.

But many owners are caught unaware, said Aldonna R. Ambler, owner of The Growth Strategist, a New Jersey-based business consultant that lectures regionally on achieving growth while sustaining profitability.

"As much as the availability of simplified bookkeeping software has been helpful to small business owners, I think it has also done some damage,"Ambler said. "A big part of gaining control over one's business is to truly understand what is behind gross profit [gross revenue minus cost of sales]."

Otherwise, owners might mistakenly believe they're doing well, but then "can't figure out why they don't have enough money at the end of the month,"she added. Owners get a distorted view of gross profits when they fill out profit and loss statements incorrectly, for instance, by lumping furniture into operating costs, when it really is a fixed asset, Ambler said.

Diane Falvey, who in April opened Centereach-based Iris and Lily, a provider of handcrafted photo albums, seeks that kind of numbers mastery. She strives to more accurately factor her time into the product's price. "I'm good at creating the product and customer service,"she said. But "I'm a little afraid"when it comes to the numbers, she added.

Jay Rosensweig, who hosts events around Long Island through his companies, FacetoFaceNetworking.com and WeekendDating.com, studies his numbers weekly. While gauging his financials, he contemplates how many events to run and at what price point. He's also able to plan advertising budgets, discount promotions and charitable giving.

Still, he's considering several adult education courses on financial management to master the subject. "It can be very time consuming to learn,"Rosensweig said.

Borzacchiello, who picked up her skills by spending a few hours one-on-one with her accountant, is now planning a marketing campaign, feeling comfortable that she can afford it.