I have now been a consultant CFO for seven years. I enjoy my work very much because it is satisfying to help business owners achieve their dreams. Still, business associates sometime don’t know how I work with clients and what I really do. So the topic for this newsletter is How I Help Clients.
The Big 3
The most common reason I get referred to clients is to help with one or more of what I call The Big 3. These are poor information, poor cash flow and poor profitability. The poor information mostly takes the form of untimely, inaccurate and/or unreliable financial statements. Good information is important because it provides the basis for decision making; it is foundational. Poor cash flow is usually a symptom of poor profitability, so we usually tackle both together. Improve profit and, in time, cash flow will also improve.
Value Proposition
Another topic I help clients with is creating a business model that is profitable, scalable and sustainable. Usually this already exists or, at least, is close. Often with adjustments we’ve got something that works.
Planning
Once The Big 3 are handled and there is a Value Proposition that works, planning is important. Usually the first step is to do annual budgets if this has not been done before. From there, I like to help clients develop three-to-five year plans and sometimes even longer plans. Part of this is typically a Business Plan to write down the strategies that will be used to achieve the long-term plan. Any reader of this email knows that a business must change as it grows and perhaps the hardest part of that change is the job of the CEO.
I also get involved in Exit Strategies for my clients and Emergency Succession Plans. This is a natural extension of my other services.
Financing
I have a lot of experience with bankers and banking, so it is natural for me to help clients with financing. The most common financing needed is lines of credit, typically secured by accounts receivable. Financing of capital equipment is the second most common financial need. And financing of a building to house the operating company is a good wealth-building and tax strategy for most clients, so this is common too.
Taxes
While my clients have a tax adviser or preparer, I do get involved in the planning aspects, especially in entity choice and ideas for reducing taxes. Almost all entrepreneurial businesses are pass-through entities, so tax planning for the business is tax planning for the owner.
Coaching
Something that might not be obvious to readers is my role as coach. I coach my CEOs because most have never been a CEO before. It is lonely at the top and the CEO can’t talk about some challenges with their employees. I’m also finding myself called to help coach client accounting staffs, including controllers, accountants and bookkeepers. Coaching is very satisfying because it is helping people be the best they can be.
Staff Selection and Support
Often I’m asked to do the final interview for accounting staff for a client. Most CEOs don’t have an accounting background and are unable to judge the technical skills of accounting candidates. I can help with this (they can’t fool me) and after hire I provide technical support to inside accounting staff members.
Sale of Business
When it comes time to sell a business, I’m often very involved. This includes going to market, the offering package and picking a buyer. We’re in that part of the business cycle where there are a lot of deals being done. The due diligence process is something I typically help with because so much of it is financial in nature. I also help with the transaction itself including reviewing documents, strategy, logistics and planning the transition.
Do you know someone I can help?
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