Develop Financial Models to Help Evaluate your Business – Next Step CFO will develop business models using metrics from your business statistics to help you evaluate the performance of your employees, sales staff, inventory management, customer service and more.

Business and Cash Flow Forecasting– Through the use of proprietary forecasting models Next Step CFO will give you the tools to perform a number of “what if” scenarios which will allow you to see what your business and cash flow will look like next week, next month and next year.

Prepare and Analyze Financial Statements – Most business owners do not have the time to assess their financial performance.  Since Next Step CFO thinks like a business owner you can rest assured we will stay on top of all of your financial results and provide you with the most pertinent information. 

Evaluate Software and Operating Systems – If you suspect your operating software and reporting system isn’t really what you need, Next Step CFO will evaluate your current system and research what will be the right system for you.  We will also work to get the new system up and running.  In addition, Next Step CFO will prepare a cost benefit analysis and will assess what the payback is on your investment. 

Seeking Financing Alternatives and Obtain Financing – Next Step CFO will help you evaluate and obtain the type of financing that you need and want.  This can be in the form of bank financing, private financing, venture financing, angel financing, grants or even a small business public offering. 

Analyze Exit Strategies – Because Next Step CFO thinks like an owner, planning your exit strategy is just as important as planning your business.  Next Step CFO will provide you with many realistic alternatives for making this final step.

Trademark and Patent Analysis – Traditional CFO’s do not get into this area but we do.  Understanding what processes should be patented or trade marked is important in protecting your proprietary systems and names.  Next Step CFO will help you determine what in your business needs this protection.

Prepare Business Plans – Next Step CFO will prepare your business plan for when you choose a financing avenue that requires one.  In addition, you may need a business plan to serve as a blueprint to help you determine a mode of operation and to help you choose courses of action.

Perform Search Engine Optimization – In this high tech world we live in the internet is playing a larger and larger role in communicating your business and what you do.  Traditional CFO’s do not get into this but we do.  Next Step CFO can provide you with strategies that will help you get on the top of the major search engines in 6 to 12 months.  We can help you execute those strategies as well.

Research Additional Sales and Distribution Opportunities – Since we think like a business owner we have to think of everything.  Traditional CFO’s do not get into this area of expertise but we do.  Next Step CFO will research additional distribution and sales avenues in order to help you increase business.

Inventory Requirements Planning – If you have inventory in your business we will help you plan your requirements by SKU so that you do not over buy or over produce.

Understand and Reduce the Risks of Business Ownership– Since Next Step CFO thinks like an owner, we certainly understand business ownership and the risks associated with it.  In all of the services that we perform thinking like an owner and reducing your risk is at the top of our minds.  We will evaluate where your risks are and go to work to reduce those risks.

Articles

CFO's who understand the risks of business ownership

Give me a CFO who has owned a business before over anyone with a lot of practical experience and a lot of diplomas. The reason is the Chief Financial Officer who has owned businesses understands the business owners risk because they too have been there. Not only do they understand the risks and feel the risks, they can identify the risks more easily and quickly because they have an owners perspective.

Until you felt what it is like to have an unsuccessful sale in retail or to not be able to fill manufacturing orders because you did not have the right inventory or not having enough cash flow to make payroll, or the pressure of employees underperforming you don't really understand. These are just a few of the issues that only business owners worry about and stay up nights thinking about.

Employees and vendors do not worry about these issues nor do they have the owners perspective of these issues. A CFO who owned a business before not only has the financial and business acumen to be productive, but also has a mind set that only a business owner has and can perform like a business partner without owning stock. In short, it gives the business owner another set of business owner eyes and that is invaluable.

The CFO and Business Forecasting

As I see it Business Forecasting is finding the right number of what if scenarios in order to identify enough possibilities of what is going to happen. A lot of business owners think that forecasting is like being a soothsayer in that business forecasting identifies exactly what is going to happen. No one can predict the future and there are too many different things that could happen to a business that will throw off the most sophisticated of forecasts. As I see it the role of the Chief Financial Officer in forecasting is to identify the top 7 or so likely scenarios and do a what if analysis on those 7 scenarios. One of the 7 scenarios should be a best case and a worse case. The proper forecasting tool to use is one that has a Profit and Loss, a balance sheet, cash flow, inventory plan and sales forecast all in one. These schedules can be broken down by quarter, month or even by week. Of course it needs to be adaptable to retail, manufacturing, distribution or service depending on the type of business the CFO is forecasting. The model also needs to identify where the risks and opportunities are and incorporate the key metrics. The great thing about this model is that as one number changes anywhere in the model all the numbers adjust. Next Step CFO uses this tool in business forecasting as a part of its CFO Services. It shows the business owner all of the risks and opportunities associated with any scenario and it allows for more thorough decision making and a reduction of risk for the business owner.

Getting Rid of Stale Inventory

One area that my retail, manufacturing and distribution clients in my CFO practice need to do better and to understand better is getting rid of stale inventory as soon as possible. Business owners hate to admit when they make a mistake (i.e. when they buy or produce something that doesnt sell a dog). We all do it, I used to do it. It is a peril of the game. DONT TAKE IT PERSONALLY. However, fail forward fast. Which means once you know it will not sell get rid of it, allow yourself to use the cash from the sale to purchase more productive assets and more productive inventory. You know; the stuff that really sells. Dont worry about the margin hit!! Take the margin hit, otherwise it is almost a guarantee you will sell it for less somewhere down the line. By selling the slow movers as soon as possible you will get more inventory turns which will result in less inventory and more profit. It should be one of the CFO Duties to manage inventory turns and to impress upon the business owner the extreme benefits of admitting inventory mistakes as soon as possible, converting them to cash and buying more productive inventory assets.

Payback associated with the right operating system

One of the CFO Duties should be to research and identify the right operating system for the business owner. The way I look at operating systems for my CFO clients is I identify which modules are to be purchased for necessity and which modules where if purchased will produce a payback. For most manufacturing and distribution companies internet based systems allowing sales reps to enter orders from any internet connection including their laptops has a significant payback through saving administrative time and using commission only reps to enter the data and do more of the administrative work. Another module with significant payback offered in most operating systems are web based stores. Once again for manufacturing and distribution business owners web based stores can produce a payback through its communication tools. For example, in a web based store all of the manufacturer or distributors customers can purchase products on line. You can offer special pricing to individual customers, but more importantly you can make them aware of special pricing deals, new product introductions and closeouts. You can also put deadlines on when those special pricing deal offers will end and the system does that automatically. This has a tremendous payback as customers can place orders more conveniently and with more information at their finger tips. You can also put deadlines on when those special pricing deal offers will end. The CFO can really help the client business owner with a more profound understanding of the payback associated with operating systems.

Why CFO's who work part time are valuable

The most cost effective and productive way to use a CFO is on a part time basis. In other words a CFO Consultant. Back in the day, Chief Financial Officers were more commonly called controllers and controllers would pay a lot of attention to monthly closings, financial statement preparation and profit planning. With todays operating systems and more sophisticated accounting modules, CFOs can turn more of their attention to areas that are more productive to the business owner. For example CFOs can turn their attention to business forecasting, inventory planning and reduction of risk. These aforementioned productive CFO duties and CFO services do not take full time manpower. You can even add a number of other CFO services and it still will not require a full time CFO. When you hire CFOs on a part time basis they will not require benefits as most are of independent contractor status. These CFOs are also your CFO as long as you want to keep them. The Business Owner wont get a two week notice because they found another job. In closing CFOs who work on a part time basis are more valuable because they will tackle the most important issues in your business and with extreme cost effectiveness.

Should a CFO offer Business Plan Preparation as a CFO Service?

I believe it is a valuable service to my CFO clients to offer business plan preparation. One of the key attributes for a CFO to have in order to prepare business plans is prior business ownership experience. With prior business ownership experience a CFO will have a better handle on the operational and marketing components of the plan. This experience will give him the ability to ask the right questions to the business owner and staff. The CFO already possesses the skills to prepare the financial portion of the business plan. The main purpose of a business plan is to put a company on the right track. Lots of times business owners say they are headed in a certain direction but as CFO when you start to peel the layers away you find that the company is going in an entirely different direction to what the Business Owner thinks. The business plan will help put the business owner in the direction he wants to go. In addition, business plans are of vital importance when the company is seeking additional financing whether the financing is coming form a bank, an angel or a venture capitalist. Since it is imperative that CFOs offer finding financing as a CFO Service, it only follows through that the CFO should be able to prepare the business plan.

Should CFOs Track Patents and Trademarks?

I believe it is a valuable service when a CFO keeps track of the Patents and Trademarks for a company. Patents and Trademarks can get very complicated and therefore easy to lose track of especially if there are several. Understanding where each Patent and Trademark is in the process will be one less area for a business owner to worry about. Suggesting patents and trademark opportunities is another CFO Service that can be performed that would be helpful. If the company imports be aware that if a product has FDA approval that there can be some discounts on Duty and Tariffs on those imports. Also be aware that if a company is not registered with the FDA for certain products that shipments can be refused at customs. I learned about this when I was tracking a patent for a client. Another important factor in tracking Trademarks and Patents are understanding the costs. Legal fees can get way out of hand. Most recently I have used legalzoom.com and had a lot of success in filing a trademark at a quarter of the cost.