In my last blog, I talked about “Why do business owners call us?”
It differs a bit from the question “what do you do?” and it requires more than a one-word response.

We are frequently called in to assist businesses facing out of control growth, chaos with their finances, and people problems that affect their profitability.

The bottom line is, they need more management horsepower.
In the second part of the series, another case in point. A while back, we were contacted by a mid-sized professional firm’s owner who was struggling with getting coherent numbers from her controller and needed to work on her exit strategy and transition planning.

She wanted to retire in the next 3-5 years, but there was nothing in place to make that possible.
3-5 years goes by really quickly, and it takes a while to get a succession plan and transition plan in place to make sure you’re leaving your company in good hands and good financial shape.

And to get the highest value as you exit!
So, what did we find during the course of our work?

1. The Controller was living in the weeds. They were struggling with the tiny day-to-day details like vendors not submitting their invoices in a timely manner, so she couldn’t rise up to actually help the owner with the big-picture things the owner needed visibility into. The owner needed the controller to support her in making big-picture decisions, but she didn’t have any time to do so.

2. A lack of planning. When I say planning, I mean all types of planning including strategic, succession, exit, transition, and financial.

3. No analytical horsepower. The organization as a whole struggled to get financial performance answers for the owner on a regular basis. The numbers were reported with absolutely no analysis or answers on why numbers were up or down from the previous year.

The controller wasn’t responsive to the owner’s requests for ad-hoc projects and analyses, which was really frustrating to the owner and one of the things that led her to reach out to us.

So, what did we do?
We worked alongside the controller to review the numbers ahead of the formal review of the month’s results with the business owner. We asked questions about why things were recorded in a certain way and highlighted the owner’s concerns and probable questions.

This helped instill ownership thinking into the financial function and taught the controller how to find the answers to the owner’s questions before the owner even asked.

As for planning, we worked with the organization to make a budget and taught them how to review performance against it regularly. We think a little differently about the business when we build a budget — we deconstruct the business into what drives different areas.

What drives your sales, your expenses, your cost of doing business, your resulting profits?
That’s transformative work – in the organization’s thinking, processing and expectations.

When we do that, we’re able to start thinking about how to control those numbers and drive them in a way that increases sales and decreases the cost of doing business.

We can think about creative ways to execute changes so the business can become more profitable — but none of that can happen when you don’t understand your numbers!
The budget was just one plan we worked with them on.

We’re currently in the process of setting up a strategic plan for them that takes the owner’s exit goals and timing into account, leading into working with her on her succession plan.

Last but not least, we took on the analytical aspect of the business to handle analyzing data and recommending options for courses of action.

We prepared the owner for the transition by performing “what-if” sensitivity analyses of different options for onboarding her key talent – how much employee expenses would increase, offset by the new business she was expected to bring into the firm, among other analyses.

Sounds pretty good, right?
If you want what they got, just call us and let’s talk about how we can make it possible for you.

Your CPA Shouldn’t Be Your CFO!

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