B2B CFO® Partners are asked this question often – and frequently by bankers and attorneys whom we partner with that have business owner clients who are at different stages of growth in their business. You may be considering the same question as you assess the strategic financial leadership within your business. Here are some of the common indicators suggesting that a B2B CFO® strategic advisor could add significant value to the business.
- High Stress: By nature, business owners have a hard time relinquishing “control” and letting others do things. They are so busy working in the minutia of running the business, they can’t focus on or find a minute of time to work “ON” the business. This is what we call burnout and it’s a real problem for the average owner who is running at a whirlwind pace. A B2B CFO® can provide guidance, expertise and strategic financial leadership so you can delegate some of these critical financial and business initiatives to a seasoned professional.
- Fast Growth: A good definition of fast growth is a company growing 25% to 50% year over year with the primary focus being growing revenue. Fast-growing companies can face liquidity challenges in a number of areas. As your company grows, you’ll need to delegate more tasks and responsibilities to those who are experts in financial, cash flow and financial statement management.
- Tight Cash Flow: If making payroll has become a concern and it seems like there isn’t enough cash to pay the bills—yet the business is growing—this is a problem. A strategic CFO can help prepare a cash flow forecast, document clear credit terms with customers (especially customers who routinely pay late and take discounts when they shouldn’t), as well as recommend cash flow reporting and forecasting technology solutions so you can see your cash on the move.
- Advice: The business owner is an entrepreneur who needs advice from an experienced business executive, someone to talk with and bounce ideas off and not just a bookkeeper providing numbers on a financial statement that likely does not tell the story about the business. B2B CFO® Partners provide a wealth of financial experience in various industries and in businesses of varying sizes and stages. Advice from those who have “been there”, including how to decipher the financial statements, can provide invaluable insight to your business.
- Financing: The business owner needs capital for an acquisition or to simply grow the business organically but does not know what type of financing is best suited for their situation. In today’s economy, many businesses have outgrown their current credit facilities. Obtaining financing is a complicated process, but the right CFO can help identify and execute to successfully help the company gain access to capital needed to finance the company’s growth and/or expansion.
- Bank Wants Out: A banker can break ties with a business at any time. If the banker doesn’t want to extend or even continue the existing line of credit—this can create major cash flow issues for the business… fast. So, what do the financial statements say to the banker creating this situation? A CFO can analyze the company’s financial performance and prepare projections to meet your banker’s requirements including a proforma look ahead to justify your borrowing needs. A B2B CFO® can assist with not only preparing your performance and projections package, but help you create the right relationships with the right bankers.
- No Exit Strategy: The business owner is typically “all in” their business, without a discernible way to cash out for retirement. B2B CFO® sees this frequently. A CFO can help you identify the value drivers in the business, make improvements that will enhance those drivers with the objective of increasing the company value of the business, and finally, guiding the business owner who is ready to exit in building a team to complete a successful and profitable exit.
- No Succession Plan: Some business owners think that they will wind up dying at their desk and never leave the business. The common belief is that it is unlikely you can find a number 2 leadership person to take over or continue the business in the owner’s absence. A CFO can assist management with succession planning before the ownership transfer event occurs. Doing so insulates the company from risk because successors—whether they’re insiders, third parties or family—have an idea about what to do to keep the company running and how to best do it. A CFO can help get the succession plan in place and keep moving the company in the right direction.
Why B2B CFO®?
Business owners choose B2B CFO® when they need strategic advice for two primary reasons: they can engage a professional advisor on their terms, on an hourly basis and when they need it, and, when they engage a B2B CFO® advisor, they engage B2B CFO® – a firm of more than 210 financial professionals serving over 1,000 business owners nationwide for over 30 years. Our partners have experience in almost every industry, which means that it is unlikely that a business owner will face an issue that we have not seen. We are connected nationally with multiple types of service providers, from bankers to M&A firms, attorneys and wealth managers. Our goal is to help the business owner focus on the core reason(s) the business was started and help them develop strategy to build the value of the business.
Is it time to delegate the critical financial management of your business to a B2B CFO®? Contact me today to learn more about our tools, talents and processes. AndrewTucker@B2BCFO.com