The primary reason for businesses failing is not loss of customers nor even bad products, it’s lack of accurate, relevant, timely management information. Everyone knows the need to keep accounting records and submit the results to Companies House or the Charity Commission, but that is not sufficient to manage the business from one year end to another. Nor is a monthly version of the year end accounts. And while good business people have an intuitive feel for profit, the capacity to retain all the necessary numbers is exceeded once growth starts to take off and either contracts, or branches or layers of management are added more and more quickly.
Such success (“a nice problem to have”) can mask problems and in one instance a company was about to be sold before they were uncovered. We created systems to produce the right MI, reduced cost and enabled the sale, to the same prospective purchaser, a year later. On another occasion profitability was slipping and there were no accurate accounts to identify the problem until we stepped in.