A client recently said to me: “I want to grow our business and stop the cash burn – how do we do this? When is it the right time to invest and grow?”
What a tough question to answer. Each business is at a different stage.
We spent a day examining his business and determining what the growing pains were. He had started the business a few years ago and it grew from scratch to $750k turnover last financial year.
The impact of 2020 will stay with us for the rest of our lives. It marks a critical inflection point of before and after. It is a year that blindsided many small-business owners.
We’ve seen new businesses birthed with success and others thriving amid chaos. We’ve seen neighbourhood classics tragically lost, and others that struggle to survive day-to-day.
Critical points like these thrust every business owner from acting with strategic intention to reacting to curveballs.
Often, we get asked by friends, family and peers: What does a Chief Financial Officer (CFO) actually do? These are frequently people that have known us for years, that we dine with regularly, share holidays with, stand at the side of the footy pitch with! Yet, they don’t fully understand exactly how we have spent our working lives dedicated to helping business owners to transform and scale their businesses. So, if the term “part-time CFO” is as alien to you as “UFO”,
A rhetorical question for you – “Is the business working for me or am I working for the business?”
Before you answer, perhaps it may be opportune to really reflect on where things stand for you and your business, and what you would like to achieve this year for both.
The thought of taking some time out for reflection may sound like a “nice thing to do”, however it can be a very powerful exercise.
Have you ever wondered why your cash-flow fluctuates even when sales are strong? Or how your business is valued in the eyes of an external party? Then you need to know the seven (7) levers in your business.
With just a little additional focus on one or more of these 7 levers, you can directly improve the cash-flow, profitability and/or value of your business. There’s no smoke and mirrors, nor anything particularly difficult to undertake.
Many people think that risk management is only for large corporations. This is not the case! Risk management is a NECESSITY FOR EVERY BUSINESS. The hard part is to properly align risk management processes to each unique organisation.
The world is undeniably riskier. Change is ever more rapid, and this has been accelerated by COVID. Increasing digitisation of business processes will inevitably increase cyber-security risk. The world is still highly connected, and McKinsey estimate that supply chain shocks will reduce profits by 42% of annual EBITDA profits every 10 years.
THE 5 KEY THREATS TO AUSTRALIAN WINERIES – WHAT TO DO? (part 2)
To recap, threats were:
1.Demographic shift in consumer base
2.Reduced cellar door and restaurant sales
3.International trade tensions
4.Increased emphasis on e-commerce
5.Changing values of consumers
1.ONGOING DEMOGRAPHIC SHIFT OF CONSUMERS
Wineries must understand and deal with this.
One of the areas often overlooked by business owners in their planning is an exit plan. Whilst they may not be considering exiting the business in the near future, there will possibly come a time when you are considering it’s time to move on and you will want to ensure to the business is in good stead when you walk away which is why exit planning is so important.
There are any number of reasons the owner may wish to exit a business that they have invested (not just financially) so heavily into.
The below interview was conducted between Jonathan Englert, Founder of Andiron Group, and Nick Crawford – Regional Director at The CFO Centre.
THE EVOLVING ROLE OF THE CFO
Jonathan: Thanks a lot, Nick, for joining me to do a deep dive into what it is to be a CFO, what the life and the work entail.
So what’s a CFO?
Nick.
How much cash reserve cover should your business have?
Recently in discussions with clients the focus is still on effective reporting, strategy, banking relationships and the 4 levers that drive a business, but in these uncertain times a new question is being asked… how much cash cover should our business have? We currently have ($ x) based on an internal theory and are building with multiple bank accounts for key items etc.
Rate your company finance function in nine minutes
Take The F Score
Survive, Revive, Thrive – which one describes your business?
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