Consultancy that starts with your own numbers

Our numbers say we are profitable but the bank account says otherwise. Why?

Because profit and cash answer different questions, and Rationale Services starts by showing you where the gap actually sits in your business. It is usually some mix of money tied up in what customers owe you, money tied up in stock, money going out on debt or owner draws, and timing. We quantify each one from your records rather than guessing.

Once the gap is broken down by cause, it stops being mysterious and becomes a list of things with sizes. That is the point at which an owner can do something: chase one thing, change one term, hold less of something, time one payment differently. The frustration of this problem comes almost entirely from not knowing which part is responsible.

We are growing but not making more money. What is going on?

Rationale Services looks for where the growth is going. Typically revenue is rising in the parts of the business that earn least, costs that were fixed have quietly become variable, discounting has crept in, or the work that grew is the work that takes the most labour. We separate your revenue and your costs far enough to see which it is.

This is the most common reason owners call us, and it is almost never answered by the summary numbers. A profit figure that has gone flat while revenue has gone up is an average hiding two or three different stories. The work is pulling those apart: by product, by service line, by customer type, by job, whichever division actually explains your business.

Which of my products or customers are actually making money?

Rationale Services allocates your revenue and your costs down to the level that answers the question — product, service line, job, customer or site — and shows you the contribution each one makes. Most businesses find that a small part of what they sell carries the rest, and that at least one thing they are proud of loses money.

The analysis is only as good as the allocation, so we show you our assumptions and let you argue with them. Where a cost genuinely cannot be attributed, we say so rather than spreading it evenly and pretending the answer is precise.

How do you build a cash-flow forecast, and what is it actually for?

Rationale Services builds a forecast from your own history and your known commitments, then works it forward week by week or month by month, depending on how tight things are. What comes out is not a prediction. It is a tool for seeing how far ahead your current plan holds and what breaks it first. It sits alongside our wider financial services and forecasting support.

A forecast earns its keep in two ways. It tells you when you have room and when you do not, which changes how you negotiate, hire and buy. And it lets you test a decision before you commit to it: put the hire, the equipment, the new location or the loan repayment into the model and see what it does to the tightest week.

We also keep it alive. A forecast built once and filed is a document. One updated against what actually happened is an instrument, and the comparison between forecast and actual is where most of the learning is.

How do I know whether I am charging enough?

Rationale Services works out what each thing you sell actually costs you to deliver — including the costs that never get allocated — and sets your current prices against that. The output is a clear view of the margin on each line of work, where it is thin, where you are subsidising, and what a price change would do to the business.

The answer almost always surprises people in the detail rather than the direction. Owners usually sense which work is uncomfortable, but not by how much, and not which customers are carrying it. The costs that get missed tend to be the same ones each time: your own time, rework, delivery, the slow payers, and the jobs that eat capacity without eating budget.

What we hand over is the analysis and the model behind it. The pricing decision stays yours, and you will be able to see exactly what it rests on.

How do I work out what a decision will cost before I make it?

You model it, and Rationale Services builds the model with you. Whether it is a hire, a piece of equipment, a new location, a price change or taking on a large customer, we work out what it does to your cash, your margin and your capacity under a realistic case and a bad one, before you commit. Where the same decision also needs looking at alongside the year's planning, that runs through our year-round business tax work.

The value is not the forecast being right. It is finding out, cheaply, which assumption the decision actually depends on. Most decisions turn out to hinge on one number — how fast the new site fills, how long the hire takes to pay for themselves, what happens if the big customer pays slowly — and once you know which one, you know what to watch and what would tell you to stop.

We will tell you when a model says the decision is close. Close is useful information. A model that confidently endorses whatever the owner already wanted is not worth paying for.

We are going to a lender or an investor. Can you get our numbers ready?

Rationale Services prepares and explains your own figures so you can present them and answer questions about them with confidence. That means records that reconcile, a forecast you can defend, a clear account of how the business makes money, and a rehearsal of the questions you are going to be asked.

What we do not do is represent you in the conversation, value the business, or give any form of opinion on your financial statements. If what is wanted is a valuation or an opinion, that is work we refer out, and we will say so before you need it rather than after.

The part owners underestimate is the rehearsal. The figures usually hold up. What loses the room is an owner who cannot explain where a number came from.

I want to be out of this business in five years. Where do I start?

With the honest version of what the business is now, which is what Rationale Services builds first. That means records that stand up to an outsider's scrutiny, a clear picture of what the business earns and from what, and a hard look at how much of it depends on you personally — because that is usually the single biggest issue.

From there the work is a sequence of things to change while there is still time: cleaning up the records, separating the owner from the operations, stabilising the earnings, and documenting what is currently in somebody's head. Five years is enough time to change the answer. One is not.

This is advisory work on your numbers, not a valuation and not advice on the structure of a sale. Valuations and the legal and tax structuring of a transaction are referred out, and we coordinate with whoever handles them so everyone is working from the same figures.

What does consultancy cost?

It depends on the question and the state of the information needed to answer it, so Rationale Services scopes each engagement before it starts. The factors that move it are how many entities are involved, the condition of the records we are starting from, transaction volume, and how far the analysis has to be broken down. How an engagement is scoped and run explains how that is agreed.

What is this not?

It is not an open-ended advisory retainer, it is not a management substitute, and it is not a valuation, an audit, a review or an opinion on your financial statements — work of that kind is referred out. Rationale Services does not make the decision for you, and will not pretend an analysis is more certain than it is.

It also will not work if the numbers underneath it are not reliable. Where the records cannot support the analysis, we say so first and fix that before anything else, rather than building a careful model on figures that do not hold — which is what bookkeeping that keeps the records reliable month to month and accounting that produces figures an analysis can rest on are for.