May 12, 2022 | IMPACT Insights
A Business Story
To help you evaluate whether we may be able to help you, please read the story below, which outlines the issues that a typical C-Suite IMPACT CFOs client has before working with us. The story resonates with a lot of our clients as so many of them share the same challenges.
We will call the client ‘Mike.’
Before I came across C-Suite IMPACT CFOs, we had a ‘good business’ but we knew we were barely scraping the surface in terms of potential …
My expertise is in growing businesses and the irony was that, despite best intentions, I was spending 90% of my time simply making sure that the business was functioning. The atmosphere in the business was one of frustration. We had the ideas, the creativity, and the desire to build a great business but lacked the underlying systems and strategy to allow the key members of our team to excel.
Although we had a business plan of sorts, it was not a document we referred to regularly (if at all). The big picture goals had been taken over by the daily demands of the business. The business seemed to be controlling the people (including myself) rather than the other way around.
When I look back, I realize I was spending most of my time worrying about cash flow. Even when we had plenty of cash, I would worry about a possible future time when it ran out. Above all though, I wanted to find a way to pass ‘all things financial’ onto somebody who could take all of it off my hands, who really knew what they were doing. I struggled to find time to think through how best to achieve that goal.
Taking on a full-time Chief Finance Officer was an expensive option. Spending more time with our accountant didn’t feel right (our accountant is great when instructed but that meant I had to do the instructing, which was exactly what I wanted to avoid). We had periods when we were generating lots of new business but our bank balance rarely seemed to reflect this. I was becoming increasingly frustrated with my own inability to understand the numbers.
Even when we brought in some new reporting tools, we were coming up short in terms of interpreting the reports. And looking back, we were collecting information that was not necessarily the information we really needed.
The banks were not helpful, either. We had money and what I thought was a ‘sound business’ but the bank refused to lend to us. We didn’t have the in-house knowledge to know what to do to add weight to our case. We had a great product and a great future but our growth was being thwarted through our inability to see the big picture. What we needed was a roadmap to help us achieve our objectives as well as someone other than myself to hold us accountable for getting there.
My personal time and energy were being sucked out of me. I worried constantly about meeting payroll and often felt like I was the only person doing any of the work (in retrospect, the whole team was working, but mostly on the wrong things). Today, now that we have the focus back, the business is just a much more vibrant and exciting place.
I had a great team, but it was (and still is) a young team and to some extent lacking in experience. There was nobody with whom I could discuss the big decisions, and certainly nobody with the same vantage point as me (i.e., my interests as business owner were always going to differ from those of my team). I often felt I needed an ally – a business owner/mentor type – who I could run things past and who would give me objective advice. Looking back, that would have saved a huge amount of time, money and energy.
I remember chatting with an executive coach friend of mine who asked whether my business was an ‘income or equity’ model, and being embarrassed when I didn’t really know what to say. I wanted to make money in the short term AND sell the business somewhere along the way, but ironically was making little money for myself in the present and had no idea how or when we were going to exit.
I had a couple of opportunities to acquire some smaller local businesses a number of years back. I was out of my depth in terms of knowing how to structure the right deal, spent several weeks in discussions and negotiations and finally ended up backing out because my own business was suffering from lack of focus.
Life outside of work was almost non-existent. I convinced myself that I was putting the work in now to enjoy the rewards later, but the years kept ticking past and I was barely moving forward. Tax bills were always a big shock. They shouldn’t have been, but they always were. I often wanted to take cash out of the business for various reasons but didn’t really understand what my options were and how to go about it.
My senior team often pressed me to discuss share options. I wanted them to share in the success of the business but lacked a well thought-through plan that would enable me to deal with the issue both fairly and in a way which was ultimately going to be advantageous to the company (i.e., by incentivizing my team). I always put the discussions off because I was ill-prepared, NOT because I was selfish (although I’m sure my senior team might have looked at it differently).
These were just some of my problems. Looking back, I think that above all else, I wanted someone to take charge. Not take charge of my domain (growing the business), but take charge of the planning and the rebuilding of the infrastructure and the systems (essentially the finance function), which would create the platform for me to do what I do best.
This is what I loved about C-Suite IMPACT CFOs approach. As they conducted their in-depth review of our current finances, I could feel the burden lifting. Going through each of the ‘12 Boxes’ that comprise our company finance department gave me confidence that every area was going to be addressed. Some areas we were doing ‘ok’ (although they needed improvement), and other areas were a disaster zone.
We now have a really strong foundation. Each of the big areas of concern in the business was addressed at the outset of the relationship with C-Suite IMPACT CFOs. We achieved our funding requirements, fixed all of our compliance, tax and planning issues, have a fantastic reporting system in place, I no longer wake up in cold sweats worrying about cash flow, we have greatly enhanced our profitability by switching focus and have a clear roadmap in place as we head toward an exit. From my own perspective, I have fallen back in love with my business and can now concentrate on growing the company knowing that the finance function is truly in safe hands.
My Chief Financial Officer is a CFO, CEO, and sounding board all rolled into one. He has given me the space to run my business in the way I always wanted to run it and I no longer have to worry about my finance department, as I know it is in the safest of hands.