B2B CFO^®    (877) 4-B2B CFO

 

B2B CFO^®, is a national CFO Services firm focused on emerging and mid market companies, that has grown from a handful of partners in 2004, to nearly 120 partners today.  During that time the partners have built their individual client bases, and today we have total client revenue of over $3 billion.  We have done all his through effective networking - and that is how you will land your next position. 

Whether you are looking for a job or looking for clients for a consulting business, there's really no question about the best approach:  Networking.  As Matt Bud has been known to say, "Networking is my life!"

LinkedIn is a "social media" site that was developed specifically to help professionals and business people make connections.  It has grown rapidly to have over 38 million members - mostly high income   professionals and business people.  Will it solve all of life's problems, bring you unsolicited job offers and improve your social life?  Maybe.  But it's just a tool..and you must learn how to use it to make things happen.  What can you use LinkedIn for?  Here's my ever growing list:

• Enhance and Expand your current networking
• Use it to establish and enhance credibility
• Catalog your testimonials and references
• Research potential employers, partners or clients
• Find a new job or new employee
• Be found - LinkedIn profiles get high Google ranks
• Share knowledge and expertise
• Introduce connections
• Cheaper marketing efforts
• Business Development through Alliances and Partnerships
• Develop your Thought Leadership Status
  

The nice thing is that it does not have to happen overnight.  LinkedIn is like a Wiki about YOU.  You can work it whenever you have some spare time, and it will continue to grow.  In the darkest night of self-doubt you can blow away the cob-webs and be pro-active about building contact lists, researching companies, finding resources.

So how do you use LinkedIn to find that next position?  One of the best pieces of career advice I ever received was, "Stop looking for a job. Start looking to meet people." 

• Leverage your new contacts. For each new person you meet, ask, "Can you please suggest at least two other people who could be helpful to me?" Help them to think by suggesting: employer, trusted advisor, friend etc. Because most people want to be helpful, they will almost always share at least one additional contact - and it's much easier for people to respond to a job search this way.  
  
• Bring Offline to Online Worlds.  Search for people on LinkedIn that you meet. Read about them, find them at conferences and seminars and try and set up LinkedIn contact.  Each new contact will bring a wealth of additional possibilities.
  
• Network using Groups.  Join groups, create groups and find out which groups your preferred contacts are in. Go offline and shake hands with real people.
  
• Build your Reputation: Use Questions and Answers and recommendations to establish yourself as an expert.  Really set yourself apart from the generic 50-something CFO resume. 
  
• Stay in touch. Invite offline contacts to join you on LinkedIn.  Explain the benefits to new users.  Post frequent updates on LinkedIn, including links to people you've met, companies you've discovered, or new products or services you find along the way. Your contacts will be able to see your updates and it gives them a reason to stay in touch. And of course, when you land a project or job, send out a big note of thanks and an update on your coordinates to the people who have been helpful to you.

In future articles we will discuss Profiles, Building your Reputation, Linkedin for Job Hunting, Using Groups and Searches, and the science of LinkedIn Domination. 

David Kirkup is a Partner with B2B CFO^®, and an active networker on LinkedIn.  He writes a weekly Blog on financial issues with a British humor slant. 

Small to mid-market professional services firms, such as engineers, IT consultants, architects and design shops, often have bookkeepers or accountants, but do not have the right kind of financial management expertise and tools needed to drive growth, and truly understand and improve their profitability and cash flow. Business owners should be asking themselves:

• How does your firm stack up to other peer firms?
• Do you know what's driving your profitability and cash flow?
• Do you fully understand the relationships between staff utilization, overhead rates, billable hours, and cash flow?

In my experience owners of professional services companies don't know the answers to these questions and, as a result, are often faced with some serious management issues:

• A feeling that profitability could be much stronger, and a concern that high staff salaries and pressure on billing rates are just making things worse.
• A need to grow revenue so the company can reach the next level, but concern about spending marketing dollars and lack of time for marketing.
• The knowledge that receivables are steadily growing with bank lines increasingly stretched, and seemingly no progress in improving long term cash flow and stability.
• Lacking a strategy to build corporate value and to find a way to ultimately exit profitability.

At B2B CFO® we have studied these issues for many years. Our partners, each with over 25 years of experience, are trained to provide professional services firms with the solutions they need to raise their financial performance to the top of their industry. B2B CFO® has designed decision making and profitability tools specifically for professional services firms, and have many ideas get moving in the right direction.

A deep understanding of the components of your business will help you stop running in place. As the business starts to grow, you can now focus on long term strategy and ultimately a profitable exit.

B2B CFO ® is a trusted business advisor, creating financial and goal clarity to increase cash, profitability, sales and successful exit strategies. Every professional services firm, regardless of its size, needs a Chief Financial Officer. You can now afford a CFO with B2B CFO®. Contact David Kirkup, B2B CFO®, for a discussion about how to begin taking control of your firm.

 

Doug Tatum, founder of an Atlanta based consulting firm that "specializes in helping growing companies with finance issues" recently told the NYT Times that small businesses in need of cash should "quit trying", because the credit markets were the worst he had ever seen.

As a B2B CFO®, we prepare our clients for growth and advise them on how to raise cash every day, and in the last 4 months alone I have funded about $2 million in bank loans for 5 of my clients: ranging in size from a $250K Line of credit, to a $2 million mortgage refinance.

B2B CFO® is the nation's largest CFO Services firm focused on emerging growth and mid size companies, and our motto is "Cash we help you get it." So why are we different, and why are we so successful with our clients?

1. We are highly experienced CFOs with over 3,000 years collective experience, and we form long-term relationships with our clients. So we really understand their businesses.
2. We have wide experience with arranging bank financing and other types of business investments, and can draw on our partners' collective expertise.
3. We have developed relationships with bankers of all types from national banks to community banks, we know what a banker needs and wants from a lending relationship, and we can match our clients with the banks most likely to work with them.
4. We work with our clients to build the financial infrastructure that ensures timely and accurate financial statements and cash flow projections, which lead to profitable growth and enduring value. These are the foundations of the most successful companies, and factors that banks will always be concerned about.
   Frankly, advising growing companies to "quit trying" is not a substitute to providing long term professional advice and unstinting effort that helps our client drive profitable and well-funded growth.

To discuss how to never, never, never, never stop trying contact David Kirkup, Partner with B2B CFO® at dkirkup@b2bcfo.com or 770 845 6897.

 

 

Breaking news for business owners looking for financing for their growing companies. 

A recent Economist article reports on a research study by Rice University suggests that a person's creditworthiness may be seen in their face.  For years physiognomy - the idea that a person's face is a reflection of their character - was sneered at.  Now, it appears, it is making a comeback.

The study focused on 6,800 loan applications on web loan site Prosper.com, which allows individuals and small businesses to raise money from many individual investors.  Pictures of loan applicants were rated for creditworthiness, and showed a strong correlation with borrowers' credit ratings.  People flagged as untrustworthy were also less likely to be offered a loan by Prosper investors.  The survey did not reveal which facial features label someone as untrustworthy, but rumor has it that Equifax is now funding a major research study.

Scary news unless you know the right way to approach business funding.

1. Learn the language – do you understand your balance sheet, know your ratios and growth rates, can you talk about gross and net profit and understand the contribution of your various products to profitability? Or do you at least have a senior advisor who can assist you?

2. Have a presentation prepared. Banks want to see if you are a clear thinker and good credit risk.

3. Timely and Accurate Financials - you must demonstrate the capability to produce meaningful numbers on time.

4. Show them the money. Have you and other investors already opened your wallet?

5. Have complete mastery over the numbers. You really must. You must be prepared to justify every single assumption.

6. Present a range of scenarios. You need to demonstrate that even in the worst case; the bank will get its money back.

7. Have a clear vision for the business which extends beyond the life of the loan or overdraft. Banks are more likely to lend to you if you can demonstrate you can have a good commercial relationship with them over a long period of time.

8. Make sure you are not asking them for equity funding. It must be debt funding. You must be able to provide them with a high level of comfort that they are not taking a risk.

9. If possible have an accountant or a competent finance person with you. A B2B CFO^® has over twenty five years experience and  they can help you plan and prepare for funding and make sure your financial house is in order.

10. Plastic Surgeon - if all else fails get a referral to a good facial plastic surgeon.

 For more information on face-saving ways to improve profitablity and the value of your business contact David Kirkup, Partner at B2B CFO, on 770 845 6897 or dkirkup@b2bcfo.com.

 

I get annoyed when politicians shut down public policy discussions about health care by grinding on about"Socialized Medicine", totally oblivious that they have been enjoying premium benefits at the public trough for many years. If you want to know what a politician really thinks about health care - follow their deductible.

Employee benefits are perenially cited as an employer's worst nightmare - can't live with 'em, can't live without 'em.   Costs are uncontrollable, employees are never happy, each year brings a round of plan surgery as the employer nibbles around the edges of the deductibles and co-pays, trying to keep benefit costs lower than their entire cost of goods sold.  But why is this such an intractable problem?  Are we faced with a continual escalation of costs that forces more and more employers to cry uncle and cease offering benefits? As a self-employed individual with an expensive policy, I know that employees typically place low value on their benefits, and frankly, don’t realize how lucky they are.   As a B2B CFO^®, I know that clients hate dealing with EB and are caught in the middle.

 I have a great deal of experience in the insurance/ PEO/ benefits field, so I follow the health care debate fairly closely.  The basic problem with employee benefits insurance as it is usually done is this: “Today’s paradigm – where one entity pays the cost and another derives the benefit – has fostered inflation, inefficiency, and dissatisfaction for both employers and employees.”  Here are some of the positive trends in small employer benefits that are starting to happen:

1. Defined Contribution: The employer sets a contribution based on affordability and competitive need.  It makes it easy to budget, it begins to remove the employer from the EB maze, and focuses on a simple annual financial decision.  It’s as different from traditional plans as the 401K is from the old IBM pension.  Defined Contribution vs Defined Benefit!
   
2. Large Group Underwriting: I don’t think this part of the model is perfected – partly due to insurance regulations – but employers need to become part of a much larger pool  at least in terms of group purchasing power.  This is the buying power that will ultimately reduce premiums significantly.  In a larger sense this is a philosophy that insurance has to be based on large numbers.  So I think this will continue to develop to the benefit of small employers.
   
3. Consumer Driven Healthcare: Provide the employee with more choices and allow them to spend their money the way they want to.  Statistics show that employees are much happier when they can customize their benefits plan to suit their particular needs.  It also focuses employees on the COSTS of their benefits and makes the health care market more transparent.
   
4. Employee Education: Employees should have a range of services to help and advise them to select plans, model spending outcomes, price comparative services etc.  These are the kind of services I have seen with large Fortune 1000 company plans, and they are now coming to this market.

Unfortunately, you won't hear about this type of plan unless you dig deeper.  It's a real departure from business as usual, with great potential for employers and their  employees.

For more information on Defined Contribution benefits plans and Consumer Driven Health Care, and how an affordable benefits plan can help improve profitability and build corporate value, contact David Kirkup, B2B CFO^® on 770 845 6897.

 

 

 

 

In a witty scene from one of the Austin Power's movies, the evil Dr. Evil goes back to the 1960s to hold the US government hostage to his death ray.   Dr. Evil demands as his ransom...One...billion...dollars!  The President and his cabinet fall about laughing, thus confusing Dr Evil.  The President explains that $1 billion is an impossibly large sum in 1968, and that it probably doesn't even exist in the whole USA.  After some fast-track negotiating they agree to a ransom of...$1 million dollars.

Fast forward 40 years, and things sure have changed.  As CNN's doom-mongers frantically research what comes after a trillion, it looks like we have seen some pretty impressive inflation.  Don’t be lulled by the current concern about deflationary appearances.  If the money pump in Washington DC remains open, then we all may look forward to taking our cash home in wheelbarrows.

So...how do you manage a business in inflationary times.  Drawing on lessons from Wiemar Germany, 70s Argentina, and Zimbabwe in the present day, several critical business priorities must take precedence:

• Managing to pass through costs in increased customer prices.
• Implementing additional cost reduction strategies to offset inflation
• Maintaining close control over cash flow and understanding the time value of money
• Focus on debt strategy and try to develop internal working capital
• Develop inflationary adjustment for capital replacement or watch the value of your capital base disappear.
• Downsize and focus on your core competency
• Hold off expansion plans. The cost of credit will rise and will be an added burden to you.

All these strategies, first of all, entail being aware of your cost structure and having timely financial information, as well as an experienced CFO to stay ahead of the curve.  This is when you cannot afford to rely on outdated and incomplete financial information.  It’s a scary thought that companies in inflationary Argentina routinely maintained four sets of accounting books: Old currency, New Currency, US$ and Units of Production.

The most sage advice from the countries that have experienced hyper-inflation is that it develops very slowly and then explodes, and that the USA is following a well trodden path in that direction.  As they say in South America: “Taking a cab is cheaper than taking a bus. You pay for the cab at the end of the ride, and by then the money is worth less!”

For unconventional thinking about how to manage and grow your business, call David Kirkup, Partner with B2B CFO^®  on 770 845 6897.

 

You may recall the story about Alexander Litvinenko, the Russian émigré and former KGB man who was poisoned in London.  In November 2006 Litvinenko suddenly fell ill and was hospitalised in what was established as a case of poisoning by radioactive polonium-210 and resulted in his death within days.  

The British investigation into his death and subsequent Russian stone-walling, contributed to the further cooling of Russia–United Kingdom relations.   You think, so what – an obvious case of the Russian hierarchy sending an unmistakable message to its émigré citizens.  But on deeper investigation: why would the Russians – obvious experts at assassinations (Source: Austin Powers, James Bond et al) have used such an unusual and highly visible method.  After all, Polonium is only manufactured in one secret Russian city, and virtually the entire supply is exported to the USA.  The Polonium left a trail of radio-activity from the London restaurant to hotels, airplanes and virtually to the Kremlin's front door.  Who would be most interested in damaging UK and European relations with Russia?  And why? Anti-Russian government provocateurs? The CIA?  The Iranians or Al Qaida?  Clearly, all is not as it seems…

Which is exactly the point that B2B CFO Founder, Jerry Mills, makes in his book - The Danger Zone .  Many business owners create companies that take off rapidly.  In the early stages a business has cash, sales are rising, employees and customers are happy.  But then things start to go wrong...and all is not as it seems.  The business owner starts to:

• Misjudge how well or how poorly the company is doing
• Make mistakes in reading financial and operational instruments provided by internal staff
• Feel their companies are climbing up in cash when cash is really taking a nose-dive
• Make poor choices based on faulty or misinterpreted external data

 In the early growth stages the business owner is building relationships with customers and vendors, running a lean operation with a finger on the pulse.  As growth continues, attitudes start to change and problems arise with employees, customers, cash, lenders and time management.  All these problems are symptoms of infrastructure outgrowth and the company has entered the Danger Zone.

 Fixing this infrastructure outgrowth requires the business owner to focus once more on Finding activities: new sales, customer relationships, product strategy and have someone else take over the Minding activities of the company: finding cash, interpreting and presenting information, training staff, dealing with lenders and assisting with strategy.  This is exactly what a B2B CFO^® does for you.

 To follow the trail and find out what is really going on in your business, contact David Kirkup, B2B CFO^® ,on 770 845 6897.

 

The President of Peanut Corporation of America recently appeared before a bankruptcy court in Vicksburg, VA to answer questions about his company's bankruptcy due to troubling safety and hygiene practices, and the resultant salmonella outbreak nationwide. His trusted advisor was also present - who happened to be his daughter, the company's book-keeper!  Asked at one point whether the company that had nearly $20 million in sales last year paid any dividends to its shareholders - namely, the President and his partners - she replied, "What's a dividend?"

So how much is not having a CFO costing you?

In a excellent recent article on the Chief Executive Blog, Terry Weaver explores how not recognizing the need for and value of a CFO can kill your company.  If you don't have timely financials you trust - how can you begin to manage your business?  It's not just that your financials may not tell you much.  Often they are telling you the wrong things.  "Not having rock-solid, timely financials is like flying with no altimeter, no compass and no artificial horizon. The FAA won't allow that, and for good reason. Those pilots crash."  Terry reminds us that "failure to fully understand the company's financials is one of the top 3 causes of small business failure."

And you should not think that this is your CPA's job.   As Terry says, "That's an unrealistic expectation for at least two reasons. First, although there are a lot of exceptions, most CPAs do not have CFO experience. They report the news, they don't forecast or shape the news. Secondly, it's generally not their job, as they perceive it. If you hire them to prepare monthly statements and do your taxes, they actually believe you're going to read (and understand) the monthly statements and that the data you gave them to prepare them was accurate. It's like wondering why the scorekeeper at a football game didn't call better plays."

B2B CFO^® offers seasoned, highly experienced part-time CFOs, so there's no excuse to run your company with blinders on.  In a sea of economic red ink, many of B2B CFO^®'s clients continue to add employees and grow sales, while having access to lines of credit, and developing company value.

Call David Kirkup, your B2B CFO^®,  for more information and a free 2 hour company evaluation on 770 845 6897.

I have a solid retirement plan...

Every time the Mega - Million Lottery prize exceeds $150 million, I buy a ticket.  Cynics may scoff at the odds and try and tell me that I am wasting my money.  But the vicarious thrill of imagining how I will spend my $235 million lasts the whole weekend, even with the inevitable Tuesday disappointment that yet another garbage worker in New Jersey has picked the winning ticket. 

Of course, I also have a Plan B.  I invest for retirement in whole life insurance that comes with a guaranteed minimum return and long term average rate of 7%, tax free distributions at retirement and no-hassle loan capabilities at any time, together with a substantial tax free estate at the end game.  Cynics again may scoff: "You should buy term, and invest the rest", but I say my nest egg is still growing.  And I'm not alone: 68% of the Fortune 1000 utilize company owned life insurance in their long term investments, and 99% of banks own large amounts of  life insurance. 

And yet conventional wisdom is 401K and Roth IRA - as the only game in town?  Well, the 401K contribution will max out at about $16,000 a year - which is too low for many successful business owners.  Other qualified plans - i.e. those following arcane tax rules to ensure tax deductibility of contributions - are not much better. Sure you can save tax free, but you have to take the money out at 70, and what do you think will happen to tax rates by then?

So..what can a successful, high income business owner do to invest for retirement and minimize taxes?   One promising option is the Executive Retirement Supplement Alternative.  This type of plan adopts many of the benefits of whole life insurance such as guarantees, solid returns, tax free distributions and an estate legacy, while providing  company tax deduction for contributions.  There are no practical limits on funding your plan and no requirements that you spread the wealth across all employees.  But it can also be used to reward valuable, highly compensated executives who you would like to engage with "golden handcuffs". 

Another promising area for larger companies is the captive insurance arrangement which allows a company to set up tax deferred insurance plans to dedicate funds for purchase of competitors, employee buyouts or family transitions.  More in a future blog.

For insight on ways to maximize the value of your exit plan, while reducing lack of control and volatility, call David Kirkup - your B2B CFO^®  - on 770 845 6897.

 

 

 

(Full Disclosure - this article from last year mentions AIG, so this is a shameless attempt to get even more exposure from the current Bonus Crisis. )

 Alright I admit it - the Financial Meltdown is all my fault. I could have prevented it, but I sat back and let it happen.

Let me explain.. In my life's journey from English childhood in Manchester, England to my present life as a B2B CFO partner in Atlanta I spent a number of years in Lower Manhattan.

While there, I became a member of the "Englishmen in New York" club - a very exclusive society that only met once a year to celebrate Christmas - typically in very boozy fashion. Most of the members were, of course, Brits, and in insurance, and many of them were from... AIG .

Perhaps if I had had more insight into the future, I could have nudged one or two of them in a different direction (under a car/ into academia?) - a la the Butterfly's Wing - and twenty five years later saved the world from Credit Default Swaps (or is it Credit Swap Defaults? - guess it doesn't really make a difference anymore).

So with hindsight what can we learn from the meltdown that seems upon us. An article on the Harvard Business Online site made for thoughtful reading, and I think has some pointers for companies at the lower end of the scale.

1. It doesn't work to let dealmakers make all their money up front. Whether it's lenders hawking mortgages, bankers pushing bonds, or salespeople closing contracts before the end of the quarter, dealmakers have to have responsibility for the health of those decisions years down the road. Where possible, the individuals who make the deals should also have their compensation depend on the long-term performance of those deals. And sales commissions should be based on collected cash not receivables.

2. Risks may correlate more than you think. In other words, a single problem can take you down if it's severe enough. In even other words, don't put all your eggs in one basket - and don't let one customer provide 80% of your revenue.

3. In a crisis, liquidity can disappear overnight. So make sure someone competent projects out cash flow, and maintain solid relationships with several banks.

4. It's incredibly dangerous to buy a business unless you understand it in excruciating detail. And just as dangerous to operate without adequate and timely financial information.

5. Whenever anyone says they've managed to do away with risk, head for the hills. Can never be said too much, along with free lunches, if it sounds too good to be true...

6. Perhaps the greatest lesson of all is that bad strategies can happen to great companies and smart people. Which means you have to plan for the worst, and find a sounding board to constantly reality-check your strategies.

The next generation of great leaders will be the ones who absorb these lessons. Everyone else is doomed to repeat the same mistakes. In other words...it will be deja-vu all over again.