Observations From A B2B CFO
Posted on March 30, 2020 by Brian Christian
What would INCREASED PROFITS and larger CASH balances mean to your business or that of someone you know? I can help you achieve these for you or someone you know!
As a Partner with B2B CFO, the USAs largest CFO services firm focusing on entrepreneurial, growth oriented and middle market companies, I support every facet of each of my clients operations, including sales management, production operations, human resources, finance and accounting.
In working with my clients, I have solved several common issues with which they previously struggled. All of them are critically vital to profitable growth and sustainability. The good news is that with focus and accurate analysis they can be rectified. In no particular order, here are five that I see most often:
- Lack of Timely, Accurate and Meaningful Financial Statements.
All business decisions have financial implications. Without basic financial information, it may be a shot in the dark. Many times the financial statements are too old (not timely), the business owner does not believe they contain correct information (not accurate) or the financial statements support the preparation of the company’s income tax return, and not necessarily the successful running of the business (not operationally meaningful). They usually only become important when the business owner needs to meet with the bank.
- Lack of Cash Management tools and expertise.
As we all know from operating a business, cash is king! It is the common denominator for all businesses, NO CASH = NO BUSINESS. Other than the current cash balance (most of the time determined by looking at the bank balance) most small businesses do not manage their cash. Cash management includes understanding your businesses operating cycle (i.e. cash to cash cycle). To improve your operating cycle it is imperative you understand what it means, how to calculate it, and what influences it before you can improve it.
- Poor Pricing Management.
Setting the appropriate price of your products or services will drive revenues and just as importantly the gross margin for the business. Do you have an accurate assessment of the fixed and variable costs of producing your product? Can you accurately assess your profitability by sales region, customer, product line or service?
- Lack of Systems & Processes.
Processes, whether documented or not, exist in all businesses. It is the way you perform the work necessary to produce your products or services. In most small businesses, the underlying processes to accomplish the work are rarely documented or reviewed as a whole (i.e. system). Developing efficient and effective systems and processes generally reduce costs and/or improve productivity.
- Too Much Minding and Grinding and Not Enough Finding.
Jerry Mills, founder and CEO of B2B CFO, developed a simple organizational model for small businesses. He identified the three roles he found in closely held businesses as Finders, Minders and Grinders. Grinders represent the employees whose focus is about today. Minders live in the past; their work is in the administrative, accounting, customer service or warranty departments. True Finders live in the future. They are the visionaries, innovators, and relationship builders. They provide the passion and the drive for the business to grow and succeed and pull the entire company into the future with them.
If any of these challenges sound eerily familiar, I can help!
I would thoroughly enjoy the opportunity to visit with you to share more about my background, our firm and the unparalleled value proposition that B2B CFO can provide to you and your business. Part of our value proposition is a free Phase 1 analysis of your business performed at your convenience.
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