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Welcome Bob Knabel

Welcome Bob Knabel

Welcome to the Team!

Bob has more than 25 years of executive leadership experience in operations, finance and accounting, strategic planning, team leadership, domestic and international operations under both corporate and family-owned governance. Industries include distribution, retail, insurance brokerage and manufacturing.

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Yes, You Can

Yes, You Can

By Michael Stier

Yes, You Can was a 2001 short film shown at the Royal Premiere of Moulin Rouge in Leicester Square. Its core message was about overcoming seemingly insurmountable challenges through a less than obvious solution. And in the case of this film, with a sprinkle of slapstick comedy.

Yes, you can …. afford a CFO, the topic of this post, presents a perhaps less than obvious solution for some of the challenges faced by entrepreneurs — the Fractional CFO model. It’s a quick read, in a Q&A style format.

Scaling a company comes with decisions that may feel beyond your scope of expertise, and for many entrepreneurs they are. You’re an expert at many things, but likely not all things.

Q: Why do business owners neglect to bring on such a critical addition to the team? 

Beyond simply not knowing that they need a CFO, they don’t want to spend the money. What many entrepreneurs don’t realize is that they’re already spending that money in lost profits and misspending. 

They’re not seeing the dynamics of the business from an educated financial point of view. You can’t always go with your gut in making financial decisions, which is what a lot of entrepreneurs try to do. 

Q: What does it cost a business when the owners avoid bringing on a CFO? 

The lack of a CFO’s direction leads to many lost opportunities to price your products and services properly, to manage your inventories better, and to separate good customers from bad customers. 

There are many hidden costs in doing business, such as the cost of maintaining a demanding client. Its margin on variable costs may be the same but because of the additional management time and hand holding it’s different. 

It’s hard to see without actually running the numbers, which many people don’t really know how to do. 

Q: Is there a revenue mark or headcount that determines when a business owner should look for a CFO? 

Consider bringing on a fractional CFO when you need to do critical forward planning–when your business is up and running with many spinning plates, but you’re not sure where to take it next. 

At this point you need someone to make sense of the financials. The only person who truly understands the economics of a business–what actually makes it work–is a chief financial officer. 

You have some data, you know who you’re serving and what they are buying, but your CFO will help you understand your business and the overall dynamics better than you ever thought you would. They will help turn the data you have into information and actionable insight. 

Q: What else will a CFO do for the company? 

He or she will peel back the onion, at which point you’ll most likely find that you’re not making money in one or more areas of your business. It’s not unusual for a company to be losing money and have no idea where it’s going. 

A CFO will take a magnifying glass to your numbers and look at staffing and other expenses vs. revenue. When they examine things like manufacturing costs and sales cycles for products, it gives you the information you need to calculate an accurate ROI. 

A CFO is also in charge of the financial future of a company while maintaining the past. The bills have to go out, invoices collected, cash managed, payroll paid, and new business ideas have to be vetted. A good CFO will analyze a new structure and how to model it. 

The accuracy of the model is key. Calculating the revenue alone won’t give you accurate information. You must know the exact costs of doing business so that when you take on new business categories, they can be designed make a profit. 

Q: Why can’t an accountant or bookkeeper do the job? 

Most firms start out with a tax return person. A classic accountant who is in charge of the rear-view mirror. The only period of time being examined by an accountant is the past year, which is a bit late for decision making, and only at the level of detail needed to satisfy the IRS. The accounting firm has only 

your tax return in mind and classically assigns expenses to categories that are only appropriate for your tax return and not for running a business. 

A regular bookkeeper records all transactions and perhaps even helps with sending invoices and collecting money. While the bookkeeper handles payroll and helps file tax findings, you’re not getting actionable, forward-looking information. 

Q: Aren’t most CFO’s overqualified for my business? How can I afford one? 

The opportunity with so many baby boomers who want to remain in the workforce is enormous and includes a large community of highly experienced chief financial officers. The fractional CFO model is a win-win relationship. Your business benefits from their extensive experience, at a fraction of a full-time CFO. Average engagement is 1 or 1/2 day per week. From the CFO’s perspective, they benefit from the intellectual challenge of working with several businesses simultaneously as well as having greater control over their work schedule. 

At FocusCFO, we are passionate about small business. If you’d like to learn more about how we can help, let’s have a conversation. 

Michael Stier is an Area President for FocusCFO based in Charlotte, NC. 

Founded in 2001, FocusCFO is the leading onsite fractional CFO services provider in the Midwest and Southeast. FocusCFO works closely with small to medium sized businesses helping business owners gain control over three key financial and operational areas: increasing cash flow, reducing business risk, and creating a platform for scalable growth. This allows business owners to then realize full financial control and increased value in their businesses. For more information, follow us on LinkedIn.

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There Are Two Kinds of Business Owners:

There Are Two Kinds of Business Owners:

those who PLAN to exit…and those who HAVE to exit.

By Michael Stier

Clint said essentially the same thing… “In this world there’s two kinds of people, my friend: Those with loaded guns and those who dig. You dig.” From the 1966 epic Spaghetti Western, ‘The Good, the Bad and the Ugly’.

In both cases, it’s far better to be of the first kind than the second!

Often in life, we wait until a change in circumstances to make a big decision. Exit planning is an example of something so many entrepreneurs put off. In business, our focus is firmly on the here and now decisions: marketing, HR, inventory, cash flow, etc. It doesn’t feel like there is the time or the impetus to create an exit strategy, especially if you don’t plan to sell soon.

But you can’t be complacent about exiting your business. The earlier you establish your exit strategy, the clearer the vision for you and your company becomes. If you don’t believe preparing is a priority for your business right now, allow me to share 10 reasons why your Exit Strategy should be as important as your Business Plan. 

10 Reasons Why Your Exit Strategy Matters

 

  1. It will change how you guide your company’s future 
  2. You will know how to handle unsolicited offers
  3. You will understand your company’s value
  4. You will know when you intend to sell
  5. Your business will become more appealing to buyers
  6. It will help you mentally prepare to exit
  7. You’ll be able to capitalize when there is an active market
  8. You’ll be prepared for the volumes of paperwork involved in exiting
  9. You’ll be prepared for potentially intensive negotiations
  10. It gives you control for life after this business

It’s Never Too Early to Plan Your Exit Strategy

An exit strategy sets the wheels in motion for the journey beyond your business. Planning early gives you greater insights into your company, a plan for the future, and a means to add value between now and the day you decide to depart. Because….there are two kinds of business owners:
Those who are value creators…and those who have a lifestyle business.

Again, it is far better to be in the former group than the latter. Value creators understand
that focusing on VALUE drives all positive outcomes!

Not convinced yet? Reflect on these alarming statistics1 in the context that 60-90% of owner wealth is tied up in their business.

  • 80% of businesses put on the market DO NOT SELL
  • 70% of family businesses DON’T SURVIVE into the 2nd generation
  • 50% of owner exits are INVOLUNTARY
  • 75% of owners who did exit were PROFOUNDLY UNHAPPY with the outcome 1 year later

Having an exit plan, perhaps most importantly, secures the future you envision for yourself, your family and your business.

In summary…. When it comes time to exit your business…. Do you want to be the one with the loaded guns, or the one who digs? 

Michael Stier is an Area President for FocusCFO based in Charlotte, NC. 

Founded in 2001, FocusCFO is the leading onsite fractional CFO services provider in the Midwest and Southeast. FocusCFO works closely with small to medium sized businesses helping business owners gain control over three key financial and operational areas: increasing cash flow, reducing business risk, and creating a platform for scalable growth. This allows business owners to then realize full financial control and increased value in their businesses. For more information follow us on LinkedIn. 

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