Lions Tigers Bears Oh My
Jul 18, 2009
You may recall the scene from the Wizard of Oz (1939), where Dorothy, the Tin Man and the Scarecrow enter the forest, not knowing what lies ahead. They start to repeat the memorable line over and over. Fast forward to today and business owners might be saying something similar. Only the line might go something like, "Accountant & Lawyers & Bankers - Oh My!"
Several years ago, a friend of mine related a story to me about when he was looking to expand his business. He talked to his attorney, tax accountant and banker. His attorney advised him to set up a new company. His accountant said to offer the new item as an expanded product line within his existing business. The banker said it didn't matter to him as my friend would still have to offer a personal guarantee on any monies borrowed (his insurance agent weighed in also, but that is a story for another day).
Needless to say he got extremely frustrated going back and forth between business advisors trying to understand their advice. Much of what was said to him was technical in nature. In addition, he was trying to reconcile their different points of view. Part of the problem was that he was trying to coordinate everything himself and still run the day-to-day operations of his business. He finally threw up his hands and said the heck with it. I asked him the background of his most senior accounting employee. He replied that she was a bookkeeper by training (a very capable one he added).
Many business owners feel that they cannot afford a CFO and must do everything themselves. Some aren't sure how a chief financial officer adds value. Among other things, a CFO is like a conductor of an orchestra. The conductor interprets the composer's music. The conductor needs to make sure that each section is playing the correct movement at any given time. He or she may not actually be playing the violin or trumpet, but they need to make sure that all of the musicians are working as one. This is like a CFO. They make sure that your business advisors and employees are on the same page and speaking the same language.