Net Profits: How Much to Whom?

Chart listing example profits of business unitsAnd the 5 steps to take to get started.

By Domenick J. Esposito
8 Steps to Great

Let’s say your firm has five offices that handle audit/tax compliance services and two advisory and consulting lines of business (tax consulting and management consulting). Let’s refer to them as business units and let’s also say that net profits were generated as in the chart at right:

MORE ON STRATEGIC PLANNING: CPA Firm Partner Performance: Different Activities, Different Metrics | 6 Measures of Partner Performance | Is HR Ready for Your Partner Pipeline? | Is Your Pyramid Upside Down? | Seizing the $10 Trillion Opportunity | Learning to ‘Run with the Big Dogs’
GoProCPA.comExclusively for PRO Members. Log in here or upgrade to PRO today.

Let’s keep the example simple. Let’s assume that each of the seven business units is self-sustaining, and that certain high-performing business units do not have to “give” profits to others and that lower-performing business units do not have to “take” profit from others.