It’s a common story: a small business sees success, grows, makes changes and adjustments, then one day looks at the books and doesn’t see profits. Sales look strong and revenue may even grow, but the profits never emerge. What’s holding them back? Which of the growth moves proved to be unwise? Which hold promise? Are there changes they can make to help them achieve their goals?

The non-profit association SCORE (Senior Core of Retired Executives) aims to help entrepreneurs. Often SCORE’s volunteers get called in after a business applies for a loan from the Small Business Association to act as mentors, helping business owners better understand their own decisions.

Take the case of an 8-year-old retailer that started out online. The owner saw great success selling through a website, so eventually opened up a small retail storefront. Sales continued to come in through the two channels, but profits didn’t. The owner blamed the recession, but Mike Sargent saw something different.

Applying ‘Big Company’ Approaches

As a mentor working with SCORE, Sargent brings skills honed during his years as CFO of a defense contractor and at a technical school to the table. In addition to Sargent’s expertise in reading financial statements, he also brings a toolbox that includes Monarch Professional from Datawatch. He uses Monarch to pull key data points from a company’s books, then determines what changes need to be made to propel them forward.

“Too often small business owners think that if they have money coming in, the profits will come, but it doesn’t work that way,” says Sargent. “People need to look beyond profits and losses to see what is truly happening with their business. They need to find business insight amidst the numbers. They need to stop making decisions based on gut and instead base them on empirical data.”

This retailer had done a great job of tracking all aspects of the business in Quickbooks, but while Quickbooks creates great reports, those reports are mostly in PDF format, making it nearly impossible to glean intelligence. Sargent used Monarch to find the relevant data and started digging in.

He first extracted the data around sales, channel by channel, then looked at expenses for those same channels. Finally he put those into a single Excel spreadsheet, ran analyses and graphs, and then examined the results.

He discovered that the retailer needed to step back in order to step forward. Online sales were stronger than brick and mortar sales, but without the additional overhead. His advice: close the storefront, keep the website and focus on Internet sales. The results were greater profits with less expense.

As a mentor, Sargent does more than just offer some direction and walk away—he arms his mentees with Monarch and helps them build report models. He then trains them on how to use the information to make bottom line business decisions.

Said Sargent: “Most of the time our clients have the right data, they just don’t know how to get a handle on it and make it meaningful. Monarch Professional helps me create a system for them to follow to do just that. Applying Monarch to Quickbooks gives small businesses the same business insight benefits that large enterprises get from huge BI installations.”

SCORE’s work doesn’t stop with small, retail-oriented businesses. The mentors see quite a bit of growth from those in the Internet marketing and social media space, many with similar challenges to their traditional counterparts. Business owners need to better understand client profitability and customer trends to be successful.

Empowering Business Insights

That’s why Sargent also does training sessions on Monarch, helping people understand how to extract data from Quickbooks, put them into Excel tables, generate metrics and compare budgets to meet objectives.

It’s that kind of deep intelligence that will help small businesses grow to be large enterprises.

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