Much more than “just” a “numbers person,” a CFO is a business person with many skills – including the ability to analyze your numbers and help you make informed decisions based on this data. If your business is growing, you don’t have to wait until you need a full-time CFO to start reaping the benefits of a CFO’s expertise. You can bring in a part-time CFO like me right now!
Even working on just a part-time basis, there’s a lot that a CFO can do that will have a significant impact on your business’ success, including:
1. Develop a strategic plan to achieve your goals – What
are your goals for the next 12 months? Does your management team have a
workable plan to make them happen, or is everyone just showing up and
hoping for the best?
2. Understand if you’re adding value to your company –
Are your financial ratios improving? If so, you may be able to get
better interest rates, larger credit limits on your trade payables, and
more money when you sell the company.
3. Analyze and strengthen your customer base – As I discussed in a previous article
, some customers bring a lot more to your bottom line than others. Take
a close look at your margins by customer, especially your largest
volume customers. Take steps to up-sell higher-margin products to your
lower-margin customers. Reduce customer-caused fire drills overall. And
consider firing your least profitable customers.
4. Ensure you’re getting the best prices – Are you getting the best prices from all of your vendors? When was the last time you got competitive quotes on your top 10 spending line items aside from labor? And speaking of labor, do you participate in industry wage studies, such as those done by your trade association? Are you paying a competitive wage? Are you paying too much for your brother-in-law, or about to lose a great employee because you’re paying less than the going rate?
5. Identify and eliminate wasteful spending –
This often involves looking at the “miscellaneous” expense category,
which is usually either money that should not have been spent, or things
that only benefit the executives. Sometimes it’s the owner’s “slush
fund” – but the owner has no idea where the money is going.
The bottom Line is, an experienced CFO can make a significant difference for your bottom Line.