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The business owner’s journey to maximizing the health, growth, and value of your business, allowing you to reach your goals Climb the Mountain
The business owner’s journey to maximizing the health, growth, and value of your business, allowing you to reach your goals
Climb the Mountain
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The truth about entrepreneurship is that the smallest company and the biggest company must be capable of doing three things beautifully:
The product or service you want to sell must be fantastic
You must have great marketing
You must have tremendous financial management
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“No one person can do all three and no one does it alone.”
Ernesto Sirolli Entrepreneurial Business Expert
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Important Question No. 1What do you do best?
• Can you make it?• Can you sell it?• Can you look after the money?
Important Question No. 2What is the most important role for you in your company, and where should you spend your time?
(One thing only)
Climb the Mountain
The Business Owner’s Journey
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Important Question No. 3What are your 1-, 3-, and 10-year goals?
1 Year
3 Years
10 Years
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The Journey Begins…
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3
2
1
Value
Growth
Health
Foundation
Continue to Run,
Succession, or Exit
Revenue and Strategy
Cash Flow, Fin
ance, and Operations
Internal Accounting and Administration
Climb the Mountain
The Business Owner’s Journey
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• Cleaned up internal accounting system• Internal processes that work• Timely monthly closing and strong internal
financial reports• Help with insurance policies, employee benefits• HR policies and contracts• Coordination with your banker and CPA
Foundation 1
Value
Growth
Health
Foundation
Continue to Run,
Succession, or Exit
Revenue and Strategy
Cash Flow, Fin
ance, and Operations
Internal Accounting and Administration
Internal Accounting and Administration
4
3
2
1
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What foundational level support do you need today?
How would this help your business?
Who are the key people you trust that can help in this area?
Climb the Mountain
The Business Owner’s Journey
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Health
• Ongoing operating forecasts and budgets• Understanding operating costs/profit margins• Meaningful weekly metrics and Key
Performance Indicators (KPIs)• Strong bank agreement and management
of your banking relationship• Forward-looking cash flow projections with
cash flow break-even analysis
2
Value
Growth
Health
Foundation
Continue to Run,
Succession, or Exit
Revenue and Strategy
Cash Flow, Fin
ance, and Operations
Internal Accounting and Administration
Cash Flow, Finance, and Operations
4
3
2
1
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What health level support do you need today?
How would this help your business?
Who are the key people you trust that can help in this area?
Climb the Mountain
The Business Owner’s Journey
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• Profitability by customer and product line• Healthy sales platform• Sales growth strategy and pipeline forecasting• Well-documented vision, mission, and values• Mid- to longer-term (3- to 5-year) cash
flow-based financial projections• Business goals, SWOT, and strategic plan
3 Growth
4
3
2
1
Value
Growth
Health
Foundation
Continue to Run,
Succession, or Exit
Revenue and Strategy
Cash Flow, Fin
ance, and Operations
Internal Accounting and Administration
Revenue and Strategy
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What growth level support do you need today?
How would this help your business?
Who are the key people you trust that can help in this area?
Climb the Mountain
The Business Owner’s Journey
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Value4
• Defined owner goals, options, and path forward• Healthy, growing company with real value• Strong internal management team and
great systems• Team of advisors to help with your goals• Higher business valuation/multiple• Business owner is in control
Continue to Run, Succession, or Exit
Value
Growth
Health
Foundation
Continue to Run,
Succession, or Exit
Revenue and Strategy
Cash Flow, Fin
ance, and Operations
Internal Accounting and Administration
4
3
2
1
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What value level support do you need today?
How would this help your business?
Who are the key people you trust that can help in this area?
Climb the Mountain
The Business Owner’s Journey
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No/bad information?
Poor/no decisions?
Production inefficiency?
Poor/no sales strategy?
Not having a cash flow strategy?
Your wasted time?
What is the cost of ...
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It is impossible to maximize the value of your business without a CFO who can match your numbers with your strategy.
Not a controller who does your numbers, but a true CFO who can understand your strategy and develop the numbers to match your strategy.
The Role of the CFO in Maximizing the Value of Your Business
Climb the Mountain
The Business Owner’s Journey
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Yesterday’s CFO?Characteristics/Qualities
• Quiet• Not involved on the
business side• Afraid of change• Afraid of risk• Set in their ways• Uninspiring
Key Roles• Bookkeeper• Controller• Accountant• Sits in their office• Keeps the rearview mirror clean• Prints yesterday’s news
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• Strategic• Forward-looking• Business partner• Essential• Leader• Communicator
Today’s CFO?Characteristics/Qualities
Key Roles• Operations/production• Strategy• Finance/banking• Budgets/forecast/analysis• Cash flow• Information/investors
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What Does a CFO Cost?
Option 2: Hire a full-time CFO
Salary: $125–$200k+/year
+ Benefits/taxes+ Bonus/equity+ Paid vacations, holidays, training, etc.
Option 3: Work with FocusCFO
Less than 1/3 the cost of a full-time CFONO costs for benefits/taxes
NO costs for bonus/equity
NO costs for vacations, holidays, training, etc.
Option 1: Hire controller and call them a CFO
Salary: $60–$100k+/year
+ Benefits/taxes+ Bonus/equity+ Paid vacations, holidays, training, etc.
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What Do You Get?
• What you have now or a little better• Single-person experience and dependency• Probably just a good accountant
• Experienced, but expensive• May be more of an investment than
you need at this time• You only get the expertise of one CFO
• Experienced and affordable• A dedicated CFO who is backed by an
entire team with decades of hands-on, CFO-level experience
• All the value of a full-time CFO at a fraction of the cost
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• Usually one day a week schedule
• Works at your office
• Flexible but recurring schedule
• Available to you on an agreed-upon basis
How FocusCFO Operates
What You Get• Your dedicated CFO works on
site and becomes part of your management team
• You and your CFO develop rolling 180-day plans with regular updates
• You pay only a fraction of the cost of a full-time CFO
• You always have regular access to your CFO
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• Usually one day a week schedule
• Works at your office
• Flexible but recurring schedule
• Available to you on an agreed-upon basis
How FocusCFO Operates The Key to Creating Value is a Strong COAR of Business Systems
At FocusCFO, we are experts at helping small and medium-sized businesses with internal financial and operational management.
Cash Flow Operations
Revenue Accounting
We drive internal cash flow by actively managing working capital and improving product and service line profitability.
We dive deeply into your operations and analyze profitability, providing regular operations reporting, focusing on key performance indicators and critical operating data.
We assist in developing tools to measure and manage revenue, pipeline, and backlog.
We work with your internal team to ensure that all internal accounting and management reporting is timely and accurate.
COAR ®
Climb the Mountain
The Business Owner’s Journey
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My advice to every entrepreneur is to hire people who are better, smarter and more experienced than yourself. Unfortunately, this advice is easier said than done.
Depending on the entrepreneur’s background, he or she will find different positions to be more challenging to fill than others. A product visionary has likely come from a product or engineering background with significant exposure to technology. This person may be more confident hiring a CTO than the domain expert.
The CEO who is a business-oriented domain expert knows business and is experienced in sales and marketing. This person is likely more comfortable finding a great VP of sales. Very few entrepreneurs, however, are comfortable hiring their first CFO.
Two things make the CFO hire both unique and difficult. First, most first-time entrepreneurs have had limited exposure to CFOs throughout their career. Second, the role of the CFO is rapidly changing, with very little being written about the “contemporary CFO.” A CFO is no longer a bean counter providing financial analysis and mitigating legal and financial risks. Today’s CFO is the CEO’s right hand executive, a strategic advisor and an operator.
Eighteen months ago I was faced with this exact dilemma. 3Pillar had rapidly grown to the point of requiring a CFO. Contemplating our first institutional financing, I was uncertain
How CFOs Have Evolved From Bookkeeping Into Corporate LeadersDavid DeWolf, President and CEO
how to describe the CFO I needed. As I spoke to my advisors, it became obvious that there is a wide range of alternatives—accountants, financiers and operators— all very qualified CFOs, each bringing a wildly different perspective to the position.
Over the course of six months, I spoke to 24 candidates. The top nine candidates I spoke to multiple times, and the top three candidates I spoke to on several occasions. Through this process I gained a profound respect for the CFO role and came to understand how the role has rapidly evolved in the past several years. By understanding this evolution and the value it could bring my organization and myself, I was able to identify and recruit a premier executive.
CEO’s right-hand executive. Today’s CFO is the CEO’s confidant and enthusiastic champion. He or she is a sounding board and collaborator on everything from financial performance to strategy. The individual must be trustworthy and someone with whom the CEO is comfortable sharing everything from strategic ideas to personal-professional struggles. While the contemporary CFO shares certain values and ideals with the CEO, he or she must think differently enough to provide an alternative perspective.
Additionally, the contemporary CFO lives, breathes and puts into action the CEO’s corporate vision. The individual understands the importance of culture, brand and
Article originally published in Entrepreneur, August 20, 2014. Reprinted with permission.
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David DeWolf is the Founder and CEO of 3Pillar Global, one of the Mid-Atlantic’s fastest growing technology companies.
strategy, and works actively with the team to justify investments. Having an EQ (emotional intelligence) as strong as their IQ, the contemporary CFO is in tune with the culture of the organization. He or she understands the importance of momentum for the organization to reach its full potential.
Strategic advisor. The contemporary CFO is the senior executive team’s on-staff advisor. The person understands, in depth, the market opportunity, strategy and business model of the organization and provides a unique perspective that looks across all departments.
Besides the CEO, the contemporary CFO is the only person with a clear view of the big picture and limited bias toward one aspect of its performance. To play this advisory role well, the individual is a business executive first and a financial executive second. They need a strong grounding in accounting and finance but that is simply a given in business today.
Throughout my discussions with a myriad of CFOs, I found that the most qualified candidates in this regard began their career with a strong background in public accounting. Eventually, they moved into a business and quickly moved up through the finance department ranks. Those who have exposure to both the finance and accounting sides of the business, as well as strong leadership experience across a range of businesses, performed well in my assessment.
Disciplined operator. Today’s CFO provides data, information, insights and puts them into action. The contemporary CFO understands how to build scalable systems and processes. The individual develops KPIs and understands performance trends, but also develops and implements strategies to improve them.
To excel, the contemporary CFO must move away from the financial report card and embrace business insights. For the CFO,
historical performance has been overtaken by trend recognition, forecasting and key performance indicators, and business and operating plans of the future. To ensure success, today’s CFO must speak the language of business and understand that the key drivers of business are often significantly more than what shows up on the balance sheet.
Innovative technologist. I would be remiss not to mention that tomorrow’s CFO drives innovative technology solutions in support of the business. Tomorrow’s CFO embraces the “product mindset’’ that products need to be engaging, delightful to use, deliver the stated business outcome and continually evolve. They understand that the consumerization of software has dramatically raised the bar. To empower employees to excel, the technology itself must get out of the way.
An educated consumer of technology, tomorrow’s CFO pushes the envelope, demanding creative solutions that empower employees. They are dangerous enough to know what to ask for and educated enough to know what is possible.
Of course, there are legal, regulatory and financial items that are necessary for today’s CFO to understand, but the contemporary CFO is, above all, a leader. He or she knows how to manage the status quo while always pushing the organization forward. The contemporary CFO demonstrates this first and foremost in the evolution of his or her own role.
Your business can’t afford not to have a contemporary CFO. The days of tending the ship are over.
Climb the Mountain
The Business Owner’s Journey
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Let the Journey Begin ...Value
Continue to Run,
Succession, or Exit
Growth
Revenue and Strategy
Health
Cash Flow, Fin
ance, and Operations
Foundation
Internal Accounting and Administration
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![THE UNCONENTIONAL GUIDE TO MASTERING YOUR MONEY Your Own CFO [preview].pdfAnd I believe that your most important work is as CFO of You, Inc. Becoming CFO of Your Life This guide is](https://static.documents.pub/doc/80x56/5f05dbf77e708231d41511e0/the-unconentional-guide-to-mastering-your-your-own-cfo-previewpdf-and-i-believe.jpg)
