Business Operations

Measure What Matters


With technology at your fingertips you can measure almost anything. It’s what you do with that information that really matters.

If you are a service business, measuring and monitoring your Key Performance Indicators (KPIs) will help you determine if you will hit your business goals.  By tracking KPIs you know well ahead of time if you're on target. 

You may ask, why not just look at my Profit & Loss statement? Financials report historical information.  You can't go back and fix what went wrong.  By tracking KPIs you can make changes well before you would see the results on an outdated Profit & Loss. Think of it as your KPIs produce the results on the financials.

So what metrics really matter? We recommend viewing the below metrics on a weekly or monthly basis:

Utilization = Billable hours / Available work hours

Realization = Actual Billed hours / Billable hours

Collection = Actual Collected revenue / Actual Billed hours

Here’s what each of these KPIs can tell you.


Overview:  Number of hours marked as billable compared to the number of hours you were available to bill

How are you spending your workday?  Are you, or your staff, bogged down with administrative tasks?  You can tell based on your utilization rate. If you’re constantly getting to the end of each workday realizing you’ve gotten very little client work done, you have a utilization issue.

Constraint:  Time Management

How to Fix:  Look at your days and determine what you can automate, delegate, or outsource.  Automate your meaningless tasks that technology can handle, delegate what isn’t making you money, and outsource what needs a higher level of attention.

In our firm we automate the prospect phase.  When a prospect is interested in working with us they complete an online form. Based on the form responses, it generates an email with a link requesting the prospect book on our online calendar.  It also sends their info into our CRM and workflow system. ALL of that comes from the bots inside my computer!


Overview:  Billable hours worked that are actually billed to a client

When you are under billing there can be several causes.  Generally, you are spending too much time on a client matter.  Is this because you didn’t know the topic well, you have constant distractions (hello email), or there are other interruptions in your office?

Constraint:  Efficiency and Time Management

How to Fix:  Use time blocking in your day.  With time blocking you block time off on your calendar to work on specific tasks.  You don’t let others interrupt you and shut off all distractions (put your cell phone away!).  

Realization rates are usually higher in firms who have niched in a specific area.  Niching allows you to become the expert in the matter, which in turn means you can finish each client matter faster. You no longer have to allocate time to learn the specifics of different industries or areas.

Law firms that are niched in an area of law make more money and are seen as an expert over attorneys in general practice.


Overview:  Of what you actually billed on an invoice, what was actually collected

This is always the worst!  You’ve done the work, billed the client, and now crickets.  The wait is on.

Constraint:  Processes

How to Fix:  Look at your collection process.  Should you consider collecting a higher retainer?  Progress billing? Or is there a way you can require the client to pay when the service is delivered.  

If your firm has a low collection rate, consider reviewing your client selection process.  Not all clients are created equal! You would be better off with less clients than with lots of clients that don’t pay.

After understanding these KPIs you can see how you are leaving money on the table and how even a little improvement in each area could have a huge effect on your bottom line.  I’d recommend looking at these metrics over a rolling 12 months. See if you can pinpoint the missing link. It could be a process that needs to be implemented, better time management, new technology, or extra training for your staff.


Aligned CPA helps service professionals run better businesses. We’d love a chance to talk and see if we would be a good fit for your firm.  Contact us for a complimentary consultation today.

 Joy Lizotte, CPA

Joy Lizotte, CPA

About Joy

I help service based businesses GROW by providing accounting and growth planning services that will take their business to the next level.

I promise you, working with a CPA can be much more exciting than crunching numbers and reviewing last year’s taxes. I look at the day-to-day of your business and help you find ways to perform better, grow bigger and generate revenue with greater ease. 

When to Outsource Your Accounting


As a business owner your time is valuable.  You’re constantly pulled in multiple directions and so many things need your attention. Guess what gets pushed to the back? Accounting.

I see this a lot in business.  The owner thinks “I’ll get to that later”, but there always seems to be something more important.  Some immediate fire to put out. After a while it becomes a bigger project than you have time for so you continue to ignore it until it’s tax time or your banker needs a financial statement.

On the other hand, there are many businesses that have in-house bookkeepers.  This can be a great option if the business owner understands the accounting function.  They need to understand the information that is presented to them and be able to interpret the numbers.  Otherwise, you could be paying a bookkeeper who is doing a sloppy job. Unfortunately, that’s a common occurrence.

So whether you’re putting off doing your accounting, or if you have an in-house bookkeeper, it’s important to remember that you need to be able to measure your goals.  How do you do that without having financials to back it up? The answer… you don’t.

Another factor to keep in mind is your time.  As an owner, you need to focus on the best use of your time. That is not accounting!  You should focus on leading your team, prospecting, closing deals, and coming up with new ideas.  Those are the activities that are going to take your business to the next level.

So, when should you outsource your accounting to a CPA firm?

  • You don’t have qualified staff to handle it in-house

  • You can’t afford a full-time employee

  • You need to understand what your financials really mean

  • You’re always caught off guard when tax time rolls around

Outsourcing is a great option if you find yourself agreeing with the above statements.  You can have a high-quality result at the fraction of the cost of doing it yourself (Time is money!).

When using our firm for outsourced accounting, you get:

  • Financial information at your fingertips with a web-based system

  • Peace of mind that you have an expert supporting you and your goals

  • Reduced overhead and cost savings

  • Improved accounting processes

There really isn’t a bad time to think about outsourcing your accounting department. It’s a great option for start-ups, mid-size, and large businesses.

To learn more about how Aligned CPA can help your business, contact us for a complimentary consultation.  We’ll look at your current accounting processes and show you how we can streamline the process, save you money, and give you a better result.

 Joy Lizotte, CPA

Joy Lizotte, CPA

About Joy

I help service based businesses GROW by providing coaching and growth planning services that will take their business to the next level.

I promise you, working with a CPA can be much more exciting than crunching numbers and reviewing last year’s taxes. I look at the day-to-day of your business and help you find ways to perform better, grow bigger and generate revenue with greater ease. 

How to Grow a Business Worth Selling


Getting the most for your business starts now

Service-Based Business Strategies

Many small business owners see their business as a retirement plan. If that’s the case for you then you need to start thinking about how to get the most when selling your business.

These are ideas and strategies that need to be in place long before you’re ready to sell. A buyer will want to see at least the last 3 years of financials.

Here's a few metrics a buyer will pay attention to when buying a service business.

#1 Cash to Owners

A buyer will want to know the cash flow to owners. Does the business have the profits and cash to pay the owners on an ongoing basis? The higher the better. 

In a service business, the owner should see 50% of profits hit their bank account.

So if you've been hoarding cash, now is the time to start paying yourself more.

There are several tactics you can use to hit this target:

  • Raise Prices
  • Get Better at Pricing New Clients
  • Have Processes in Place for Efficiency
  • Hire and Manage Great Staff

#2 Owners Time Spent in the Business

Buyers typically are not looking to buy a job, they're looking for an investment. Time spent in the business shows whether the business can run without you or not. Each year you should try and reduce the time spent working in the business.

The key is having processes and systems in place so the business can run without you. Hello Vacations!

You'll want to have an Operations Manual that teaches staff exactly how to do their work, communicate with clients, and operate the way you want. (If you don't have this in place, we seriously need to talk!  Click here.)

#3 Quality of Staff

Buyers aren't looking to buy your business, fire your staff, and start all over. They want a turn-key operation. Having "A" team members can increase your sales price. 

Now is the time to invest in your staff. If they are lacking in areas spend the money on getting more technical training. If they need to be better leaders, spend time coaching them. Don't assume these things will happen on their own!

#4 A Winning Culture

Culture can be the driver of growth, but it can also be the driver of death.

Do you have high employee turnover?  If yes, there could be a couple of things going on. Either you're a crappy interviewer or you have a crappy culture. The good news is both are easy to fix!

To have a great culture you need to have Core Values in place that state what you, your business, and your team members believe in. If you all have the same values you're more likely to have a winning team and winning culture. These Values will not only help you hire team members, they'll also help you hire or fire clients. Use them as a guiding light.


It's Not Too Late

It's not too late to implement changes in your business. Now is the best time as any to start building your high-quality service business.

If you have no idea where to start I'd love to help you! Click here for a consultation. We'll discuss your present situation and how Aligned CPA can help you reach your goals.

 Joy Lizotte, CPA

Joy Lizotte, CPA

About Joy

I help service based businesses GROW by providing coaching and growth planning services that will take their business to the next level.

I promise you, working with a CPA can be much more exciting than crunching numbers and reviewing last year’s taxes. I look at the day-to-day of your business and help you find ways to perform better, grow bigger and generate revenue with greater ease. 

Focus On What Matters

Growth is enhanced by focus. Often business owners will focus on many things at a time and then feel as if they are accomplishing very little.  If you will focus on ONE issue at a time you will have more traction in your business, which will cause change and spur growth.

Here's how to immediately see progress:

  • Take 1-3 minutes and identify the biggest bottleneck in your business

  • Take 5-10 minutes and brainstorm solutions to this issue

  • Implement the solution

To take this a step farther, determine if this is a people issue or a systems issue? :: If you have great Systems, but your people aren't following them, it's a People issue :: If you have great People, but no written process to follow, it's a Systems issue :: If you have bad systems and bad people, it's a Management issue

Once that bottleneck is identified and solved, move on to the next biggest bottleneck.

Identifying and solving one issue at a time will allow you to see change immediately.  This change will create momentum and traction.


The One Thing That Can Make You More Profitable

There is one thing that separates your business model from a well-oiled machine. No, it’s not marketing, or branding, or a dynamite product, or even customer service.

It’s one simple thing. Processes. More importantly, written processes.

If you want to…. Hire Grow Add new locations Scale Add Investors Sell your business

You need written processes.

When you started your business you developed processes, even if you didn’t realize it or have them written. It worked for you. You were doing all of the work- handling customers, ordering supplies, making sales, etc. You didn’t see the need for writing down the steps you were taking. But what happens when you add employee Number 1? Number 2? At that point, each person is handling your business the way they think it should be handled, not the way you want it handled.

As you see, the problems start when you add employees. Employees need guidance and processes to follow. They need instructions on how you want them to communicate and represent your business. And since your processes are stored in your head, your employees will be lacking that guidance.

How will having processes make you more profitable? Reduces redundancies Makes hiring easier and faster Makes training easier and faster Employees can be proactive Creates culture Every team member has the right information Employees learn to problem solve without you Business can operate without you (helloooo vacation)

That list should be enough to get you writing!

Documenting and organizing processes can be tedious unless there’s a system in place. If you feel lost but know this is the next step for your business, reach out and we can help you turn your business into a well-oiled machine.

Strategies to Grow Your Business

Growth can come in many different forms (even in pruning… more on that another day). If you’re planning to grow your business this year you need to get very clear on the HOW. How are you going to grow? That can be the overwhelming part, so let’s simplify it! There are three easy growth areas to consider.

Volume - Increase the number of sales you make Volume is all about the quantity. You want to sell more of the thing you already do. This strategy usually involves acquiring new customers which can be costly because it requires more spending in marketing and getting new customers in the door. Be sure you are creating lasting customers and not one time customers.

Price - Increase the price of your service If you want to increase your prices you need to be sure that your value aligns with the price increase. The value you deliver should out weigh your price. This results in delighted customers! If you’re not comfortable with a direct price increase think about how you could add value, then increase the value and the price. Is there a way to enhance the customer experience (this is golden)?

Services - Increase the number of services you offer Adding new services is a great way to increase sales. Figuring out what to add can be simple, but many businesses don’t do it. What is this simple step? ASK. Simply ask your current customers what else you can help them with. What are their biggest frustrations? Now figure out how to solve their frustrations.

These three strategies can be used alone or together. But remember, Focus is key. Depending on your size, your team, and your goals, you should only focus on one to two things at a time. Focus is what gets work done!

What are you going to do to grow your business this year?

If you’d like to grow your business but you’re not real sure where to start, contact us for a free consultation, and we’ll see how we can help you reach your goals.

Growth Cost Money- Avoid the Unexpected

I was recently talking with a client who is at the end of year 1 of his 3 year growth plan. We were recapping with an After Action Review (a report of what worked and what didn’t), and I was surprised by some of his comments. Although, in the beginning of year one he created a written plan for growing his business, he never thought about the additional costs he would have to support that growth.

Fortunately for him, he had savings socked away so he didn’t have any hiccups in his plan. But without that savings his growth plan could have been a flop.

So what costs can increase when you’re growing your business...

If You're Adding New Services-  Many times a business will grow by adding new services. This requires an investment in education, new processes, and marketing for the new service. Learning will not only cost money but time as well. Be sure you have planned for both!

If You're Hiring-  Many times if you are increasing your business volume you will also need to hire. You’ll need to budget for the increased salary as well as payroll taxes, benefits, paid time-off, and workers comp insurance.

If You're Increasing Sales-  If your growth is coming from increased sales you will probably need to increase your marketing budget. This will involve time and money. Will you outsource this or do it in-house? Are you growing online or in a new region? Aligning your marketing needs with a marketing budget will help you plan accordingly.

If You're Increasing Production-  If you’re developing new products, or producing more products, you'll not only need to invest in more equipment but you'll also need more raw materials on hand. This could also lead to hiring, and increased marketing, which increases your upfront costs.

If You're Adding Locations-  If you are scaling your business by opening new locations you need to be aware of not only the upfront costs to open a location but also the ongoing costs. When adding locations you need to be focused on process development and improvement above all else. Clear and concise processes are the only way you can get your business to run without you there… and isn’t that the ultimate goal?

It's important to not only understand these costs but to also have them at the forefront of your growth plan. Failing to plan for these extra costs can be detrimental to your business if you don’t factor them in.

If you’d like to grow your business but you’re not real sure where to start, contact us for a free consultation, and we’ll see how we can help you reach your goals.

Growth Companies: 4 Numbers You Need to Know

Service-based business owners have no problem focusing on new customers and serving current customers. But many don’t know how to take their business to the next level. If you’re looking to grow your business, you must pay close attention to your financials and key metrics. Key metrics are financial numbers that you need to hit in order to reach your overall goals. When planning with clients I always tie a goal to a metric or target. How else will you know you achieved the goal?

Here is a list of 4 key metrics that are important to track in your service-based business.

Sales Close Ratio. You get this number by dividing the number of sales proposals made by the number of proposals you closed. This tells you the percentage of proposals you win. Obviously, you want this number to be high, but not too high. Chances are if you’re closing 90%-100% of proposals you make, you are walking away from money on the table.

Project Margin. This metric measures the profit you will make on each project you undertake. It is the percentage of project revenue - direct costs you will pay to complete the project. The higher the number the better!

Profit margin metrics will help you with making profitable proposals and driving overall profits. I recommend determining your lowest acceptable project margin. Then, when you are giving new proposals be sure to never go below your minimum.

Monthly Operating Expenses. Your operating expenses are the expenses you have every single month. Why should you know this number? Because this is what you will have to spend each month just to keep the doors open. You’ll spend this even if you have zero collections. I suggest taking your annual operating expenses and dividing by 12. This gives you a monthly average.

You can also use this number as a target for how much you should have in savings. In an ideal world having 3 to 5 months cash set aside would be sufficient. In reality, it takes dedication and time to get that built up.

Billable Utilization. This rate will help you track productivity. On an annual basis you’ll divide the employee’s total billable hours by 2,000 hours. This gives you each employee’s productivity. You should monitor this to determine if you have space to add more client work or if it’s time to add more employees.

However, I don’t think this number should be monitored by itself. An employee can have a low utilization rate but it’s out of their control. You must also look at overall profit, prospects in the pipeline, and marketing budgets.

Why are these numbers important for growth? Because growth cost money! Your business goals must be aligned with your resources (time, money, and energy) or you’re setting yourself up for failure.

If you’re struggling to monitor and track your financial information, contact us and we can schedule a free consultation to see if we can help get you on track.

3 Reasons Your Business is Not Growing

This was the year! The year you wanted to grow your business. However, you're just not seeing the results. You started the year out strong with high hopes but quickly got busy in the day to day activities. Being busy turns into exhaustion and before you know it you're burned out. Then the last thing you want to do is think about growing a business you're burned out in. Unfortunately, this is pretty common for business owners. Several (aka: a million) things went wrong in the business growth.

Here's the top 3 reasons I see for a business not growing:

  • No Clear Plan. When growing a business you should have a clear, concise, and communicated plan in place. And not just an annual plan. You need a plan that is broken down into quarters, then into months, and then into days. Yes, I said DAYS! You and your team should know what needs to be done each day to move you one step closer to the target.

  • Competing on Price. Unless you happen to be Wal-Mart, you should NOT be competing on price. Wanna know why? Because Wal-Mart will win on price every time. EVERY TIME. Competing on price is a race to the bottom. If you offer a low price this week, next week the guy down the street will go lower, then the following week you'll go lower, and so on. Before you know it you'll be wondering why you're not making a profit.

  • Shiny Object Syndrome. So you did happen to have a written plan for growing then... SQUIRREL! Letting yourself get distracted by the latest and greatest will stall growth. I know new technology is fun or a new business opportunity sounds terrific, but if you constantly get derailed and can't stick to a plan already in place, you won't be able to grow your business. Strategy is about what you need to say NO to.

So do any of the above reasons sound familiar? If so, don't beat yourself up over it. Recognize the issues, make a plan, and move forward. Make today the day you start growing!

How To UN-Complicate a Strategic Plan

According to the dictionary, strategic planning is "a systematic process of envisioning a desired future, and translating this vision into broadly defined goals or objectives and a sequence of steps to achieve them." So what does that really mean?

In basic terms, it is a written plan that will help you reach your goals. It is a simple way to make sure everyone on your team knows what they are working towards, what needs to happen, when it needs to happen, and who's going to do it. If the plan is followed (with potential tweaks, as needed) at the end of the time period your business will be where you want it.

I call this a Growth Plan (you can read more HERE). For example, if you said you wanted to grow your revenues by 30%, your growth plan would detail the strategies we are going to use to reach the goal of 30%.

When setting up a Growth Plan we:

  • Determine your current position in the market - How you compete in the market, your strengths and weaknesses, study your competition, understand your business model

  • Develop your strategic parts - Where do you want to be in 3-5 years, what about in 10 years, what do you stand for, what's your business purpose, and what strategies do you use to compete

  • Document the Growth Plan - Overall annual goal, quarterly goals, and outcomes that we want. Also, document the actions to be done to reach those goals, details on who will do what and when they will do it.

  • Implementation of the Plan - Communicating the goals and strategies with the entire team, as well as monitoring the progress

Not so complicated, right? It's really not but we humans tend to over-complicate things!

The golden nugget in a Growth Plan is in Phase 4- Implementation. You can make the best, biggest, and shiniest plan but unless you implement it it's worth nothing.

So I'd like to challenge you to write your own growth plan. Work through the above 4 steps and let me know how it goes!

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