A smart and wise doctor will treat a patient’s persistent headaches with a holistic approach, starting with understanding your history and conducting a thorough physical examination before determining treatment.
Here are the steps a great doctor typically takes:
- In-depth Medical Interview (Anamnesis)
- Looking for “Danger Signals” (Red Flags)
- Physical and Neurological Examination
- Supportive Tests. If the doctor suspects a serious cause, he or she may recommend additional tests such as imaging: CT Scan or MRI of the head, blood tests, or lumbar puncture.
- Treatment Recommendations. In addition to prescribing pain relievers, the doctor may suggest lifestyle management and specialist referral.
Meanwhile, less experienced or junior doctors may take the easy route that requires less thought: prescribing analgesics.
While the pain may be reduced or even eliminated temporarily, if the primary cause of the headache is a brain tumor, for example, such a thoughtless action can result in a delay in mitigating the dangers.
This analogy in the medical world is also common in the business world.
When business performance (sales, profits, growth) continues to decline consistently, the easy, thoughtless solution adopted by business leaders or careless consultants is to implement a cost-cutting program. The logical assumption is: even if sales don’t increase or even continue to decline, if total costs are drastically reduced, profits will certainly improve or even increase. Logical and practical, right?
According to Johanes Lim, practical “Yes,” logical, “no.”
If all you can do is implement brutal cost-cutting (or, in the doctor’s analogy, simply administering painkillers), there’s no need for a leader—let alone a consultant—even an intern can do it.
NOW, how does a FINANCIAL DOCTOR address a consistent decline in business results (sales, profits, growth)—not just halting the decline, but also reversing it, increasing business results quickly, precisely, and consistently?!
As a “Financial Doctor and Double Your Results Coach,” I won’t immediately prescribe cost-cutting “medicine,” but rather conduct a holistic business analysis to identify the root cause.
Here are the concrete steps:
1. Analysis: I will analyze trends over the past 12–36 months. This period is important to distinguish seasonal factors from structural decline.
Data needed: Monthly Profit and Loss Statements, Cash Flow Statements, and Sales Data per SKU/Product.
2. Financial Post-Discovery
I will analyze three main areas (Primary Causes):
A. Contribution Margin Analysis (The Vital Signs)
Data needed: Selling price per unit vs. Variable Costs (COGS).
B. Fixed Cost Structure Analysis
Data needed: Rent, salaries, marketing, and utilities.
C. Productivity & Efficiency Analysis
Data needed: Sales conversion rate, employee productivity per capita, and inventory turnover.
3. Market and Competition Analysis
I will examine external factors:
Churn Rate Analysis.
Competitor Analysis.
4. Concrete Actions: The Essential “Healing” Recipe
Not amputation, but “rehabilitation and nutrition”:
Stop the Bleeding (Short Term)
Revenue Optimization (Fundamental)
Process Restructuring (Sustainable)
Diagnostic Conclusion
Declining profits are only a symptom. The underlying cause usually lies in the inability of the business model to adapt to changing costs or market behavior.
IF YOU ASK:
How can I do this quickly, accurately, and cost-effectively?
Johanes Lim, PhD, CPC, CHt (林泰義)
Financial Doctor and Turnaround Specialist for Family Businesses and The BOD Forum Across ASEAN
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