P R O F E S S I O N A L . . . C O N T R O L L E R S
The Business Foundation - A Tripod © 2001
by Adrian W. Hollander, C.P.A., CISA,
CIA, CBA, CFSA,
President of COMPLUS Inc. – Professional Controllers
Three legs provide support
for a stable platform. It will not
rock. On the other hand, if any leg
fails, the platform will fall over.
This is a proven model for a successful business organization. One leg is “sales;” another is “production;”
and the third is “administration.” Each
has a different purpose, and all are necessary.
The function of “sales” is to
make promises for a business. The
function of “production” is to keep those promises. The functions of “administration” are to enable the leaders of a
business to operate within the bounds of regulation and perform in an
economically sensible manner. A large
business with hundreds or even thousands of employees hires specialists for
each function. What does a small
business with fewer than 100 employees do?
The secret to success, I
think, is alliances with strategic partners.
It has long been a business axiom that professional services provided by
bankers, lawyers, accountants, insurance agents, etc. Even large businesses
usually don’t engage their most trusted advisors as employees. The model is well established and proven by
years centuries of practice.
Outsourcing is OK. By the way,
your business should realize that its customers are outsourcing the production
of goods or services you sell. It’s
hard to be completely self-sufficient.
Without someone else outsourcing, you don’t have a business.
The significant question is
what to outsource. Accountants call
this analysis, “buy or make.” The
issues are quality, reliability, cost and availability. Quality and reliability define the
characteristics and features that all suppliers must meet. The tie-breakers are cost and
availability. If it’s still a tie, I
choose my friends.
When there is enough work to
be done every day, an employee is a good choice. When requirements fluctuate or where special skills are needed
only occasionally, outsourcing is usually a better choice.
send e-mail to: AHollan700@aol.com