Seriously Speaking: Accentuate the Positive

Making Your Business Sing (Again?)

The other day I saw heading for a short post from Success Ventures about “accentuating the positive”. It reminded me of an old song that I first heard my dad or my mom sing. It was written in the 1940’s by Johnny Mercer (Winter Wonderland, Jingle Bells, and for you Disney fans, Zip-A-Dee-Doo-Dah). The song has been performed by such greats as Bing Crosby, Perry Como, Louis Armstrong, and one of my all-time favorite singers, Sam Cooke. If you are interested you can listen to the Sam Cooke version here.

The song, which was published in 1944 while WWII was still raging, provides some sound advice on taking control of your life. Most of you reading this post would not have been born at the time it was written (and probably for many years later) and may never have heard the song or seen the lyrics. For those of you who do not know me personally, I was not yet born either. Think about what was going on at the time. Husbands, sons, mothers, daughters engaged in the war efforts and some would never return to their previous lives. Pretty bold to put out a song talking about “Accentuating the Positive” at this time in our country’s history. But that IS what they did in those times. They found ways to lift each other up. Look at the lyrics, listen to the song. It was purposely upbeat, in that old big band style that makes you want to get up and move, put on those dancing shoes, and hit the dance floor. Imagine what would happen if you could apply this to your life. Maybe, if we are all lucky, you can lift someone up with your new found positivity.

Well, since this is a blog for business people, I suppose I should address why this old song is the basis of this blog. Well,  the song actually provides some pretty good advice that can be applied to your business as well. So, let’s get acquainted with the song.

The chorus of the song goes like this:

You’ve got to accentuate the positive
Eliminate the negative
Latch on to the affirmative
And don’t mess with Mr. In Between.

Over the next few weeks, we will take each line from above and show how following the advice from this song might help your business sing. During that process, we will talk about how we might identify some of the underlying dynamics that may be the root cause for the presence, or lack thereof, for any of the above situations in your business.

PART ONE

The basics

Before we get down to the nitty-gritty, so to speak, we need to talk about some basics involved in this process:

  • Dynamics – in this context they are the underlying forces that operate within your business. They can move you forward or backward. Obviously, we want to identify the ones that are moving you in the right direction. The dynamics of your business are what will provide the driving force on your business concepts. Examples of these dynamics that are providing “motion” to your business could be: Company Culture, Current Economic Condition, Vendor Relationships, Governmental Regulations, etc.  So, what are the dynamics that are impacting your business?
  • Concepts – for our purposes here, are those ideas that are being acted upon within the business. They may have been provided by management, they may have developed by stakeholders independent of management input, and they may or may not be in concert with the chosen, approved and expected direction the company wishes to move. Are your ideas and directions being carried out? Are someone else’s ideas being carried out? The answer to these questions don’t necessarily prove the existence of sinister forces at work. More often than not they reveal a disconnect between reality and perception. A disconnect that if left unchanged can have disastrous consequenses.
  • Action vs. Adaptation – some dynamics that are at work in your business, as well as those providing “force” from the outside are not changeable in the near term and will require adaptation. Others, are changeable and will require action in the near-term to effect meaningful change. It is important to know the difference. Actionable items are just that. They are dynamics within the business that can be acted upon within ninety days (90) that will have a measurable impact on your business.
  • Commitment – to make a change in your business requires your commitment. It can’t be a passive activity that you start, then you stop because it gets tough, or your not sure or, or, or. Change is not easy. Doing what is best for your business is not easy. This should NOT be like so many of those goals and objectives that come up at the managers meeting. Everyone agrees its a good idea, nothing happens, and we talk about it next time around. Like the shampoo bottle says: Lather, Rinse and repeat.
  • Examining your business, in my experience, is most successful when working with a guide. Even with my experience, it was difficult to dissect all the parts of a business with clarity while trying to carry on with the required day to day tasks. What I am going to do, within the pages of this blog, over the next few weeks will be just the bare minimum amount of guidance to get you started thinking about changing your dynamics. It will not be a complete roadmap for the entire process.

Next time… “Accentuating the Positive” in your business.

To be continued…

Seriously Speaking: Why should I hire a CFO, I am just a small business?

I am somewhat amused when someone tells me that they are “just” a small business. I guess that is because it is often said in the most apologetic of tones. They should be screaming: “I OWN A SMALL BUSINESS!!!”

Unfortunately, most people think of large businesses when someone is talking about the economy, or the government should do this or do that.  The risk takers, those brave souls who have the guts to start a business deserve more than just a cursory mention when it comes to discussing actions that are being taken to help “business”. So let’s do that now.

ALL HAIL TO THE SMALL BUSINESS OWNERS OUT THERE!

To be considered a small business you must have less than 500 employees. Here are some facts about small business:

  1. As of 2013, there were 28.2 million small businesses according to the Small Business Administration (SBA). 28.2 Million!!! Let that sink in for a minute. There were only 18,600 Large businesses. The people running small businesses, the owners and/or their managers will never make millions in salary for a year. Some may not make millions in their lifetimes. I will address that a little later on in this article.
  2. The small business provides 48% of all private sector jobs in the US. That’s right. On average nearly half of the jobs in your community are not provided by the “big guys”. For those of you who like numbers, that is just shy of 60 million jobs that are provided by the “I am just a small business”.
  3. • Do you know that 33.6% of the value that is exported is from firms that are considered a small business?  The value of those exports is estimated to be around $500 Billion. That’s billion with a capital B!!!

I could go on and on about the value of the small business in the economy but that will not answer the question at the start of this article. But, let’s agree that value that you provide as part of the small business group is just as responsible for the successes in the economy as well as much of what is good about the country overall.

So, Why hire a CFO?

I don’t want to scare you but: 20% of businesses fail in their first year. 50% are out of business before year five and only a 33% will make it ten years. If your business is older than that you have beaten the odds. But, what if one of these scenarios applies to you:

  • Maybe you survived but are just barely eeking out a living and you have become frustrated with your business and aren’t sure what to do to make it deliver on the promise it once had.
  • Or, and there are millions of you out there, you are the Baby-Boomer business owners whose business is pretty successful but your kids don’t want it and it is time to “dress her up and take her to the dance” known as selling your business.
  • Or maybe, and I hope you aren’t in this group, you are like the business owners that I have worked with that is having cash flow problems, the bank is on you to make changes or they will call your loan, your vendors are not being paid and your customers aren’t paying. If you ARE in this group you better check out my contact information below.
  • Or, maybe YOU ARE the CFO and you are buried. You don’t need someone full time but you need someone who understands your pain, who will have the knowledge to do the things that need to be done and in a timely manner. Someone who isn’t after your job! Someone who might be at a higher rate than that temp but brings significantly more value.
  • Or, and Lastly, you have a CFO or a controller but you would like some oversight or additional reporting that they can’t seem to get you, or you need someone on an interim basis until you can hire that CFO or Controller, or (you fill in the blank)

In short: You hire a CFO for the same reasons those big companies do: To get results that move you along toward your goals.  The only difference is you can’t afford to pay the same thing as those big guys pay for a full-time CFO. You don’t need to. You still deserve the service though. That’s where firms like Conceptualized Dynamics come in. By engaging the CFO on a part-time basis you can take advantage of their expertise at a fraction of the cost and at an amount that will fit within YOUR budget. Who knows, by working together you might just become one of those CEO’s that earn those seven figure salaries.  Some of these are: Increase profitability, improve cash flow, raise capital, Establish benchmarks (KPI’s), Manage Banking Relationships, Facilitate Reporting to the Board/Owners, help manage growth (including Merger and Acquisition activity)

What should I expect from my CFO?

  1. Honesty, integrity, and respect. No one, and certainly no CFO, has all of the answers. On day one they should be listening to you about your goals, your objectives, and your business. They should ask questions about your business that will help them craft a plan for doing what needs to be done, what kind of help you need and how they are going to bring value in excess of the amount on the invoice that they will hand you on a regular basis.
  2. Your CFO needs to understand your business. Whether you are a restaurant, a manufacturer of widgets, fidgets or gadgets, there are aspects of your business that will be unique. Some of these things may be your culture, your style of dealing with the customer, vendors, etc. Your CFO can’t and shouldn’t be giving advice until they understand YOUR business.
  3. Your CFO should be able to have an impact on the following areas of your business:
    • Your CFO will monitor cash, make cashflow forecasts, and work with your lenders and your banks to ensure that you have adequate funds to operate and grow your business.
    • Systems and processes – your CFO should be able to make suggestions for improvement
    • Financial Statements and Data Presentation – your CFO should be able to discuss financial statements in a manner that makes them understandable and the data should be presented in a manner that makes it actionable. What is the point of presenting data if you can’t or won’t do anything with it?
    • Your CFO should understand the relevant measurements of your business. They may be referred to as KPI’s, Industry Benchmarks, etc. They should be able to develop them if none exist. These will provide a baseline for measuring performance going forward.
    • They must be able to provide actionable guidance on managing the balance sheet of the business. This will likely include advice about decreasing the payment gap between receivables and payables, capital expenditure recommendation and/or justification, debt structuring that is cost-effective, etc.
    • Last and most importantly, the CFO will have an impact on profitability. This may come in the form of helping you avoid costly pitfalls, cost containment and negotiation of supply contracts, contract review, review of bid numbers to avoid costly calculation errors, etc.
  4. Your CFO will be able to, in conjunction with you, develop budgets, forecasts and a long-term growth strategy for your business.
  5.  Your CFO must be able to communicate with you in a no-nonsense and courageous manner even when delivering bad news

 

ABOUT THE AUTHOR 

Patrick Cowan has over thirty years experience in financial and business management, public accounting (licensed CPA in California – inactive). He has experience in multiple business types and industries including construction, manufacturing, retail, contracting, telecommunications, etc. He is the founder and owner of Conceptualized Dynamics, a CFO services firm offering affordable guidance to small to medium-sized businesses. Conceptualized Dynamics offers business owners in the Louisville, Kentucky area a free no-obligation assessment of their business and he may be reached at patrick@concepdyn.com or by phone at 502-664-0546. Patrick is available for engagement on a contract basis in other areas of the country if a cost-effective agreement can be reached between Conceptualized Dynamics and the Business Owner/ Manager. This usually equates to one or two full days a month on-site with much of the work being done remotely.