Are Your Red or Black?

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November 12, 2015- ISSN# 1545-2646




Are You Red or Black?

If we are playing roulette then you would be betting on which color the ball will land. In business it might be the difference between profit and loss on your financial statements.

What I want to ask you is -  are you, in your role at the business, contributing to the expenses side of the business – RED or the revenue side of the business – BLACK?

In every business there are opportunities to generate revenue.  To do that there are certain given investments needed to to provide the product or service by which revenues are generated.  The key is to separate investments which return value and the expenses which take away value from the bottom line.

When you sell widgets you must purchase raw materials or parts.  You manufacture/assemble them into components which you in turn sell to your buyer/consumer.  Those purchases are investments which you plan on increasing their value by adding your expertise and delivering an end product to the customer.

In the course of the creation process you have investments in machinery, utilities, people.  The key is to have a proper balance in those items such that all of them are contributing to the value of the end product.  Too much raw material, too many parts, too much labor etc. all tie up cash and sit idle not adding value to the end product.

This week as you evaluate your business performance take a look at what is contributing value and what is wasting value.  Do the tools, parts, products and people all fit together into a seamless efficient work process?

Take a look at your leadership team.  Does each roll in some way add value or is it just another expense.  Look at each element and determine if it is red, black or blurry.  Focus then on the blurry ones and plan to move them into the black zone or value adding.  Try then to see how the reds can also move more into the black zone.

As organizations grow and additional resources are added it can sometimes put a tilt on the balance of investment resources and expense resources.  A common phrase which is too often over used and has drastic financial consequences is – “well that is just the cost of doing business.”  I challenge you to evaluate those “costs of doing business” and figure out ways to move some portion of the dollars from the red zone into the black zone.

Not sure what is Red or Black? Give us a call (313) 527-7945 at JKL Associates to help you find out.

Questions or comments – email us at or call our Office at (313) 527-7945

Copyright – JKL Associates 2015

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JKL Associates
18530 Mack Ave #242
Grosse Pointe Farms MI 48236

Main (313) 527-7945
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