This month marks the seventh anniversary for me of becoming a Consultant CFO. In my practice I try to help business owners and particularly enjoy long-term relationships because the client can accomplish so much.
Two of my clients have been with me steadily from almost the start of my practice; one for over six years and one for over five years. These two clients are in very different industries with very different business models but they have much in common.
Both clients were near breakeven operations when we started working together and revenue growth had stalled out. Now, years later, both are very profitable and sales have quadrupled (that’s four times) while we’ve worked together. Both businesses continue to grow while maintaining these strong profit margins.
I can’t take credit for these success stories although I have contributed. What are the keys to their success? Here are a number of things I have observed.
First, by working together for a long period of time, we can make big changes, the kind of changes that can only be made over years and with a strong commitment. We have an end goal in mind in both cases and we are about halfway to that goal with both businesses. This isn’t like a publicly-traded company with the need to worry about the next quarterly earnings report.
Second, both business owners have been able to develop a sound business model that scales. That means that the value proposition works and there are systems in place that enable the business to grow while profit margins are maintained or improved.
Third, both business owners have enjoyed quite a bit of success but remain unsatisfied and want to achieve more. That restlessness is a common trait, almost a prerequisite, of good entrepreneurs.
Fourth, they are both lifetime learners which means they will listen to advice from outside experts. Both have never owned and run a company this size before, so they need help and recognize and welcome that help.
Fifth, both owners are currently facing the challenge of growing their business to the next level which means drastic changes in what their role becomes day-to-day. It actually involves writing a whole new job description for the owner. It’s a little scary but they are willing to try.
Finally, in both cases we meet monthly and have a management meeting that starts with the financials from the prior month and year-to-date. From there we get into most every other relevant topic to the business. These monthly meetings provide a very important discipline for the business. I believe this no-nonsense rigor is important to any business. This monthly check-in helps keep the business owner focused on the long-term plan in spite of the everyday distractions of the business.
Besides the monthly meetings, I also get involved in special projects for these clients that include things such as Business Plans, Exit Strategies and such. But the monthly meeting is a key to success.
Both these business owners are likely to exit their businesses within the next decade. I hope to be around to help them both reap the rewards of their success.
No comments yet.