The Olympics was “must see TV” for the past few weeks with tough competition, world record breaking swim and track times and the advent of new Olympic sports like break dancing. I take my hat off to a few Olympians whose stories and performances were memorable.
I saw the top athlete’s performances as metaphors for what it takes to be a good financial steward of your businesses.
Simone Biles and Katie Ledecky are considered G.O.A.Ts in the fields of gymnastics and swimming because of their discipline, consistency and deep confidence in themselves and abilities.
Growing a financially healthy business requires the same thing – discipline, consistency and deep confidence in your company’s abilities/worth. Here is what that looks like and the results of practicing discipline, consistency and confidence.
1) Discipline: Megan and Sharese are partners in an ice cream scoop shop. Sharese oversees the financials, while Megan oversaw the operations. Even though looking at numbers was not Megan’s favorite past time, she joined the monthly meeting with their fractional CFO, reviewed the financial statements and came prepared with questions.
2) Confidence: Every month for the past two years, Matthew’s fractional CFO reviews the business’ cash burn (how much cash used monthly) so Matthew knows how many months of cash, on average, he has in the bank in a given month.
3) Consistency: Maura runs an outsourced HR consulting company. Her employees track billable (client related) and non billable time so they know exactly how much time and cost goes into each client project. With this intel, they can ensure they’re pricing correctly.
Noah Lyles reminded us that past performance is not an indicator of future performance. He eked out a win in the Men’s 100-meter dash but by the end of the 200-meter race he was gasping for air. He won a bronze medal in that race.
But the point is just because business may be doing well now, unforeseen events can negatively impact performance. To avoid being down for the count, here are a few things you can do.
1) Build an emergency savings fund equal to 9-12 months of business expenses: That’s what Susana did. When the pandemic hit, she was able to keep her employees paid well and the lights on.
2) Product based companies diligently track inventory purchases and sales: Jimmy, Stan and Paul make 60% of their revenue during special holidays especially Christmas. Last year they underestimated their stock count for popular items and ended up losing customers because they didn’t have enough inventory.
3) Invest in disability insurance and some form of life insurance, even if you’re a sole proprietor, in case something happens to you as the business owner. This is what I did in the first few years in business before I had a team.
Finally, Leon Marchand, the new French swimmer on the blocks, taught us that if you want to win Olympic medals, find a great coach to guide you to the Gold.
Want to win financially in your business?
Have an accounting/financial team with experience that you can trust to keep your business competitive and financially strong. This includes:
1) A CPA that talks to you about different tax strategies to reduce tax payments
2) A bookkeeper that knows accounting well and takes care of the financial admin stuff (like paying bills, following up on client invoices, payroll admin, etc) so you don’t have to
3) A controller to set and reinforce policies and procedures so you’re not a risk of loss due to fraud or theft
4) A fractional CFO who can help with pricing, create projections, guide you through the process of raising capital from investors or lenders, help you make strategic decisions for growth, scale and exit
You might be thinking, ‘Do I need an outsourced CFO?”
Whether you’re at $500K, $1MM, or $5MM in revenue, you can’t afford NOT to have one! At FinCore, we are your financial coaches, cheerleaders and partners helping you move the business every day towards GOLD!
Let’s have a chat! Schedule a Financial Strategy Session
Tricia Taitt is the CEO and Chief Financial Choreographer of FinCore. She holds an M.B.A from The Fuqua School of Business of Duke University, and a BS in Economics with a Finance concentration from The Wharton School at the University of Pennsylvania. For over 20 years, she’s been a finance professional. Half of the time was spent working on Wall Street while the other half was spent in the trenches side by side with small business owners. As a result of working with FinCore, clients have been able to take control of their numbers and feel more confident in their ability to make decisions, while increasing profits by 10% and building a cash stash to invest in growth. Follow Tricia on LinkedIn and Instagram.
If you’re ready to see what our team of CFOs can do for your small business, Schedule a Financial Strategy Session.