Why I built ProfitGuard
35 years as an entrepreneur and business consultant taught me one thing: a financial statement never explains why an order made a profit or a loss.
Richard Lammers
Co-Managing Director ProfitGuard · 35 years of calculation experience
A snapshot isn't enough
Over the past 35 years, I've worked as an entrepreneur and business consultant, digging deep into the numbers of many companies. One insight kept confirming itself: a financial statement, with its balance sheet and profit-and-loss account, only shows a snapshot of a company's assets, liabilities, and earning power – with far-reaching legal and tax consequences. Above all, it serves as the basis for financing the business.
What it doesn't show: why I, as an entrepreneur, made a profit. Or why I made a loss.
To understand the profitability of individual business areas, many entrepreneurs run expensive analyses – with their tax advisor, a business consultant, or their own controlling department. The downside: high costs, a lot of time, and a laborious job of pulling data and evaluations together. And in the end, it's still just a snapshot that only benefits a handful of people in the company – the insight never reaches the organization or translates into lasting profitability.
“We just need to charge 5% more!”
This sentence comes up often – and it acts like a watering can poured over the entire order book. On profitable, good orders, it can price you straight out of the negotiation.
On other orders, companies often grant further discounts instead – turning unprofitable orders into a genuine business risk.
To protect companies from risky projects, avoid unprofitable orders, and keep optimizing the profitable ones, I developed the ProfitGuard method.
A ProfitScore instead of gut feeling
ProfitGuard is based on your company's current planned figures, including your profit target. The key metric is the number of productive employee hours working directly on the order in production or on site. Built on a formula refined over ten years, entering just four numbers produces the ProfitScore.
4 numbers are enough
Material costs
Subcontractor costs
Machine costs
Productive hours
ProfitScore below 1
Neither costs nor the profit target are met: the order consumes more resources than it generates in contribution margin and gross profit, resulting in a loss.
77
3
59
26
88
14
42
65
9
33
71
18
ProfitScore just below 1
Costs are covered, but the profit share stays below the target value – you don't make a loss, but you also don't make sufficient profit on every order.
41
15
63
8
55
27
72
34
90
6
48
21
ProfitScore above 1
This order covers not only its costs but also the proportional profit that every order should deliver – you generate a sufficient profit share on every order.
23
87
45
91
12
76
38
82
19
68
54
99
For every company juggling many orders and many hands
The ProfitScore works for any company that deals with new orders and quotes every day, while deploying many employees across different orders in production or on site.
More profitability, every day
Wherever ProfitGuard is used effectively, it acts directly on every order and every quote – steadily building insight across many employees and, over time, driving more profitability. That's why I want to help companies become more successful through profitable order management.
Mission
We believe companies only achieve the best results once they always keep the best possible orders in focus.
#1
Profitability platform for small and medium-sized businesses
Do you still have questions or are you unsure?
Talk to our experts to find out how you can use ProfitGuard most effectively in your company.