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Monthly Archives: October 2018

An Analytical Approach to Scaling Growth

An Analytical Approach to Scaling Growth

When you scale you need to have a more analytical approach of targeting and segmentation, but in the beginning, it’s more much qualitative. (Pavel Malos 6/11/18, uxdesign.cc)

Chief Executive Officers, Board Members, and Investors have a fiscal responsibility to ensure an organization can handle planned growth.  For-profit business leaders must back up the strategy with the right level of working capital and financial infrastructure.  Nonprofit leaders must make certain they have the right financial and fundraising data to analyze and plan effectively.

 

QuickBooks and other simple financial programs have elevated the confidence of professionals, not trained in accounting, past their competence.  These systems allow you to process the basic information easily; however, the non-accountant may not have applied the required strategic thought process to the design of the infrastructure that a trained and experienced financial strategist would apply. Some entities can be run effectively in QuickBooks, and the financial data can be analyzed if the infrastructure is set up properly in the beginning.

 

All organizations need to have financial information, in proper segments in the General Ledger and make sure there are proper period end procedures.  Lack of proper information can lead to performing services or selling product at a loss, non-compliant reporting and a lack of proper cash flow.  All of these issues can lead to an untimely end to any organization, for-profit or nonprofit.  We have all heard of employees showing up for work one day to find the doors locked and an abrupt end to their job and paycheck.  Sometimes these employees learn their employers have not remitted federal income taxes, deducted from their paychecks, to the IRS and they have to pay the taxes again.  Leaders of organizations should listen to their financial leaders when they request upgraded systems and more people to account properly for the organization’s financial data.

 

Leaders who make it a priority to set up, manage and monitor metrics have thought through configuring their reporting infrastructure. Leaders without such foresight run through their day-to-day life worrying about how to make payroll and pay bills, with little to no awareness about which decisions are working and which are not working to scale growth to new levels.

 

Barker Associates has the unique ability to work with all sizes of organizations and building infrastructure that matters.  Contact us today!
Mindy Barker, Founder & CPA | Jacksonville, FL 32256
(904) 394-2913 or (904) 728-2920 | CFO@MindyBarkerAssociates.com

Look at Your Business – Like an Investor

Most founders and CEOs are certain their business is a good investment and that others should see it that way. Unfortunately, that is not the case in a high number of instances when we dive deeper into the aspects of a company.

We each have a unique set of characteristics that drives us and puts us in situations where we are comfortable. Every time we make a choice to put ourselves in a situation and stay in it, something about that situation is working for us. Solid self-awareness and emotional intelligence help us make choices in life that work for all aspects of our lives and align with our relationship with money and our core values. A culture is developed around that. In business, the governance over this culture is ultimately driven by the purpose of the investors, shareholders, or founder(s). They determine the “Why” of the organization.

The culture and purpose of an organization can be several things.

It can be a hobby, and you are okay with not making any money. I know many business owners who have built a lifestyle company that provides enough cash to pay their bills; they may also run all personal expenses through the company. They are examples of “Lifers.” This practice is great if they happily accept the annual income they produce and do not have any desire to sell the company one day.

How to Look at Your Business Like an Investor

Entrepreneurs who are aware they need to build Enterprise Value will focus on establishing and monitoring metrics with the understanding they are building a business that can survive in the ecosystem of the investor world. They do not commingle their personal and business expenses. They listen to experts and focus on the important aspect of building a business. They may not take a salary from the business in the early years, opting instead to reinvest in the business and build a loyal customer base and revenue.

The problem arises when the Lifer wants to raise money from or sell the business to an investor – which really means they want the investor to fund their lifestyle.

Which Are You?

Before you get ready to pitch to investors, evaluate which type of business owner you are and if pitching to investors is the right thing for you. Do not waste your time and energy if it is not.

Read Chapter 2 in Pitching to Win: Strategies for Success to get more insight and a self-evaluation to find out which one you are.