Category Archives: business continuity

Business Challenges Signaling the Need for a CFO

Business Challenges Signaling the Need for a CFO 

Mindy Barker | Barker Associates

Businesses will inevitably face various challenges, particularly as they grow. At times, the owner or CEO struggles with even identifying the root cause of the challenge, let alone understanding what solutions are available. And more often than not, the causes of those challenges can be found in the financials, and the solutions, in the expertise of a CFO. In an effort to shed some light, here are three common challenges a business faces that signal it’s time to onboard or outsource a CFO. 

Challenge 1: Slow progress because the founder wears all the hats. 

When first starting a business, especially a small one, it’s typical to see the owner/founder(s) acting in every role and performing every task in an attempt to save money. They will try not only to do their own job, but every other job, including those relating to finances. Soon, they become overwhelmed and lose sight of what they should be doing – strategically guiding the company forward to meet its goals. While the mentality behind it is understandable, this is not a sustainable business practice. 

CFO Solution 

Generally speaking, the person who is charged with running the company does not also possess the background and knowledge needed to financially steer it toward success. It’s no wonder this person gets frustrated and overwhelmed—not only are they trying to do everything, but they simply cannot make data-driven decisions without the actual data. A CFO can help clear the way with real numbers and explanations of where those numbers come from and how they can be used to benefit the company overall. By utilizing financial forecasting and modeling, the CFO can help ensure that the CEO is making the best decisions for the future of the company. 

Challenge 2: No clear understanding of company goals. 

This isn’t to say that the owner or executive board does not understand the company’s direction. They likely know exactly where they want to go. However, what they often lack is an understanding of what must happen (and when) in order to get there. Guiding a business requires milestones and goals that must be met in succession along the way. It’s imperative that the leader of a company understand how to prioritize these goals to make a long-lasting positive impact.  

CFO Solution 

A CFO is responsible for knowing the company’s target revenue, industry trends, and projecting the short- and long-term revenue and expenses through viable milestones and goals. And these will likely be different from the owner’s short-term goals. For example, an owner may think that simply getting more clients to generate more revenue is the answer to every problem. However, this isn’t necessarily the first step. While gaining more clients and, by default, more sales, is an important factor in company growth, a business needs to take a few starting steps before reaching that point. Namely, understanding the target market and increased demands of the business. Gaining clients is only truly beneficial if those clients are the correct ones and if the business is equipped with the knowledge, resources, technology, and manpower to handle the increase in operations. Otherwise, any increase in revenue will be short lived.  

Challenge 3: A lack of financial organization. 

Founders become founders because they saw a need, had an idea, and came up with a solution. But having an idea (even a great idea) and having a profitable business are two entirely different things. So much attention is focused on perfecting a product or fine-tuning a service that the intricacies of the finances often get lost in the shuffle. This lack of organization results in missed opportunities and unfounded business decisions.

CFO Solution 

Keeping finances organized to help develop appropriate strategies is simply what a CFO does. Their primary objective is to help grow a company grow financially. With a steadfast eye on critical financial detail, a CFO will consistently work with projections and help increase the bottom line. But this can only be done when the finances are organized enough to tell the story they need to tell.  

Ultimately, a CFO, whether a full-time hire or outsourced, takes the guess work and frustration out of all of these challenges (and many more) for the CEO. With financial stability and accurate future outlooks, the CEO can focus on strategy and lead the company forward. 

Barker Associates provides strategic guidance and outsourced CFO services to companies of all sizes. We can provide the higher level of strategy your company needs to grow. If you need assistance, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100. 

Managing an Underperforming Team

Managing an Underperforming Team 

Mindy Barker | Barker Associates

It’s no surprise that a company will only ever be as strong as the people in it. Strong teams that collaborate, communicate and possess a strong drive and passion can help propel the company to new levels of growth and success. However, an underperforming team can have quite the opposite effect, not only decreasing productivity and profitability, but also the overall morale and company culture. And while leaders know this, it’s not as if they can just go clean house, especially today, when competition for talent in the market is fierce. So, what can they do? They can do what highly effective leaders always do—face the challenge head-on and learn how to manage it.  

Leading an underperforming team can be complicated, to say the least. Whether it’s a team you’ve been working with for a while or you’ve just been brought on as a new lead, the threat of failure lurks just beyond every individual mistake, instance of poor communication, or strained relationship. But don’t throw in the towel just yet (would we really ever do that?). Here are a few tips to help turn your lackluster team into something that shines.  Take a deep breath, walk in with a positive attitude, and commit to making clear-headed decisions, not reactive ones. 

1. Start Small 

The desire to get in there and make big changes will likely be compelling. However, rushing to judgment like this will only push team members further away—from you, from each other, and from the company. The more effective approach is to start small by listening, observing, and collecting as much information about what is going on with the team as possible. Get a better understanding of where the problems are, so that you can address them one at a time. 

2. Provide a Safe Place 

With all that we’ve been through, people are still struggling. And often, they are doing so silently. In fact, they may not even realize how much it is affecting their work. Provide your team members with a safe space to give feedback and voice their professional grievances or even personal issues (we all know they don’t stay outside the office door). Try to pick up patterns and pinpoint weaknesses, so that you can help redirect them on a more productive path. You can also promote a greater sense of unity and collective purpose by co-creating goals with your team that everyone can work toward together. 

3. Don’t Forget Other Leaders 

While weaknesses may be obvious among your entry- or mid-level team members, are they as clear with regard to your managers? Unfortunately, the answer is usually no. Take some time to explore how your management could be improved upon. If there was any criticism in your team’s feedback, take it seriously. Getting defensive does nothing but hurt the entire team. Think about what adjusting to their criticism would look like and what you are able to implement with your current management. You may also want to look into leadership training or coaching to help your managers understand their role more thoroughly and work better with the team.  

4. Know When to Make Tough Decisions 

A team could be underperforming for a wide variety of reasons. However, if performance does not improve after some time and effort, it may be time to consider going your separate ways. Sometimes, despite your best efforts, it just isn’t the right fit. And prolonging a bad relationship will only make it worse in the end. Be aware that terminating a team member can be a heavy blow to team morale in the here and now, but the long-term benefits will more than make up for it. 

There’s no doubt that an underperforming team can be frustrating, creating its own unique set of challenges. With these tips and remembering that you can handle this responsibility, your team will rise to the challenge with you. 

Barker Associates provides strategic guidance and outsourced CFO services to companies of all sizes. We can provide the higher level of strategy your company needs to grow. If you need assistance, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100.  

Recession Proofing Your Business

Recession Proofing Your Business 
Hoping for the Best, Preparing for the Worst 

Mindy Barker | Barker Associates

Recessions are a normal part of the economy. In fact, according to the National Bureau of Economic Research, they occur more than most people want to believe, averaging once every six years. And many are thinking that we are heading for one soon. 

As business owners and executives, there’s nothing we can do to stop it. But that doesn’t mean we should sit idly by and do nothing. Instead, we should be working diligently to recession proof our businesses—not after the stock market tanks, but when times are good. Recession proofing is about proactively preparing for the next economic downturn … whenever it heads our way, rather than waiting for it to hit and then gathering the troops to figure out what to do next. By then, it may be too late. This requires advanced planning, specifically with regard to revenue preservation and increased technology needs. 

As the C-Suite or Board of Directors begins to strategize with increased meetings (starting now), preplanning with respect to the following will assist in recession proofing your business: 

1. Operate within the Budget 

While this may seem like a given, not enough businesses actually take the steps necessary to do so. Make no mistake, this is a best practice regardless of the economic climate. Not only will it help when times are good, it may be the biggest factor in survival when they’re not. Operating within your means will put you in the strongest position possible when the economy starts to change.  

2. Reskill and Cross Train Employees 

There’s no doubt that you may lose resources during a recession, and clearly, not because you want to. As such, you need your team to be as flexible and resilient as possible, so that they can pivot when you need them to. However, too many employees only know one department or area, one set of tasks or activities because that’s what they’ve been trained for. Cross-training and reskilling so that they have the ability to work in various areas if needed are essential to preparing your business for the next recession.  

3. Track KPIs Continuously 

Whether it’s a marketing or sales or operational activity, if it is not achieving goals, it should not continue. This is about becoming the most efficient with time, resources, and funding, and that means eliminating waste wherever possible.  

4. Create an Emergency Fund 

Just as with personal finances, an emergency fund provides a cushion when times turn. This is especially important for small businesses that may not have access to extensive lines of credit or other financing options. By cutting unnecessary costs and relentlessly collecting all receivables, you can begin to create three to six months of a cash reserve to cover essential expenses like payroll and utilities if revenue drops.  

5. Assess Risk Tolerance 

Consider how much risk your business can withstand. This should be an honest assessment across the board—from leaders to staff to technology to systems. Ultimately, you want to know if they are adaptable enough to handle the stress of a recession. Can they withstand the pressure? And, if so, how much before they start to crack? Then, the biggest consideration—What can you do to strengthen them now? 

6. Diversify Revenue Streams 

Similar to operating within the budget, this is always a best practice. Consider how can you tap into a new market or revenue stream within your current parameters. This may be extending your geographical boundaries or offering more virtual options. It may also include assessing your current equipment to determine if it could be used for any other purpose. Simply, the more revenue streams you have, the less likely your business will be overwhelmed by the recession’s impacts. 

7. Cultivate Client Relationships 

This is yet another best practice, regardless of the economy, but crucial before a recession. When your clients and customers have to make tough decisions, just like you, regarding where they spend their dollars when they have less of them, they will choose the people and companies with whom they have the best relationships.  

Recession proofing is not about being negative or having a “the sky is falling” attitude. Instead, it’s about being proactive by planning for the worst, so that even through tough times, you can experience the best.  

Barker Associates provides strategic guidance and outsourced CFO services to companies of all sizes. We can provide the higher level of strategy your company needs to grow. If you need assistance, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100.  

A Shifting Economy Means Shifting Valuations

A Shifting Economy Means Shifting Valuations 

Mindy Barker | Barker Associates

The economy underwent a huge transformation as the country adjusted to a new way of life according to the unwritten rules of a worldwide pandemic. And just when we thought things might start to settle down, it is shifting again. For companies and investors, one of the most significant of those changes will be the disappearance of the revenue multiple.  

A revenue multiple measures the value of the equity of a business relative to the revenues that it generates. It’s the idea that companies can trade based on revenue and not on profit. Simply, it is a metric used often during times of excess money—times in which we recently experienced. The incredible amounts of money that went through the market over the past few years and the resulting high valuations created more strategies based on revenue growth only.  

In the first quarter of this year, companies with high revenue growth, unique technology or customer list have closed deals based on 5 to 6 times revenue. Most of these companies had minimal infrastructure and/or no earnings. This is how valuations and sales have been going. But times are changing  …  

Today, with all that is happening in the economy, a much-needed shift is occurring in trading. This shift is taking us from a prioritization of revenue to a prioritization of profit. The result? Creating a dramatic drop in value for thousands of companies throughout the country.  

Is the Past Repeating Itself? 

The current changes in the economy are not unlike the events of the Dotcom Boom that occurred in the late 1990s. During that time, the popularization of the internet led to a massive swell in the stock prices of technology companies. In 2000, the bubble burst (as it generally does) and certain technology companies saw stock prices plummet before their eyes, causing several to close their doors permanently.  

The Dotcom Boom had a variety of causes. One of them was obviously the popularization of the internet, but there were several other external factors that created the intense drop in capital. To begin, the years prior to the burst saw record-low interest rates, adding to the public’s ability to spend. Once the utility of the internet was realized, investors rushed to the stock market, eager to invest in the new technology.  

There was also a sense of extreme pride in helping these companies cultivate the future. And with low interest rates, investors invested millions in startups with no track record and, sometimes, not even a business plan. Right or wrong, these startups somehow made it to the stock market where the public was able to invest in them. And it made sense that what followed was the increased valuation of many tech companies. But when it all burst and those companies went under, thousands of people who believed in the future without worrying enough about the present lost everything.  

The Economy Today 

What we are experiencing today is eerily similar to the Dotcom Boom, but there are some key differences. Leading up to the pandemic, interest rates were also very low, and money was being poured into the economy in the form of stimulus checks and PPP. People were spending their days at home, and not spending their money on vacations or expensive dinners or concerts. And for those who were fortunate enough to keep their jobs during the pandemic, it was time to invest. Yet, other factors were brewing that would impact it all.  

We saw the Great Resignation, where millions of American workers voluntarily left their jobs in search of better pay and working conditions, creating a labor shortage we haven’t seen in decades. Now, thousands of companies across the country desperately in need of labor are paying more to get new employees in and to keep the ones they have. This trend is ongoing and is unlike anything the U.S. has ever seen. We have also seen supply chain issues like never before—delays and empty store shelves, leading to skyrocketing prices for what is available.  

With all types of companies feeling the pain of the labor shortage and the supply chain challenges, the economy has been affected at nearly every level. After all, less labor means less revenue and less revenue means less profit, putting many companies at risk in future valuations. Additionally, as interest rates inch upward in the government’s attempt to curb the record inflation, consumers are becoming more conservative with their money. 

Shifting to Earnings and Profit 

While this shift in the investment world will undoubtedly cause increased inflation as companies raise prices to make profit, it’s a shift that must occur. We must focus on earnings and profit rather than revenue. With decreased spending and no solution for the labor shortage in sight, CFOs are challenged with making the numbers add up and are finding it increasingly difficult to pay the bills. And if they do not have the books and records in order to know what the profit is, it will be incredibly difficult to manage through this valuation shift.  

Understanding what causes these fluctuations and shifts, and comparing them to instances of the past can be beneficial to navigating economic changes in the future. Thinking about how your company is able to address the issues at hand may be the key to avoiding going under as the market experiences yet another crucial shift.  

Barker Associates provides strategic guidance and outsourced CFO services to companies of all sizes. We can provide the higher level of strategy your company needs to grow, including advising on systems and process updates. If you need assistance, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100.  

Is it Time for a System Update?

Is it Time for a System Update? 
Advancing Technology is Requiring Business Owners to Consider Options 

Mindy Barker | Barker Associates

So much of business, and life, has changed. Much of that change has to do with reacting to the pandemic and its resulting disruption to normal business practices. Still other changes have been brought about by our own internal shifting needs and wants. And nearly all changes have some advancing technology component attached to them. In fact, technology’s growing role in businesses of all sizes is requiring us all to reconsider more advanced systems, software, and processes.  

The question is—How many businesses have truly kept up with this transformation? Are they ready for yet another change or are they using old processes with an equally old thought process—if it’s not broke, don’t fix it? If it’s the latter, I would argue that when those processes are truly aged-out, they are, in fact, broken.  

The Challenges of Using Outdated Systems 

It’s understandable—change makes most people uncomfortable, especially when it comes with a perceived hefty price tag attached. Yet, what they often don’t consider are the costs associated with doing nothing. In this case, the costs associated with continued reliance on outdated systems and processes.  

Challenges with the continued use of outdated systems are plentiful. A few of the most common pain points include lack of information accessibility, timeliness, quality, delayed reporting, noncompliance, and missing out on recruiting opportunities because the company appears outdated and behind the times. And the “band-aid” solution of getting a new system, while attempting to transfer old processes to it is also problematic. In those instances, the new system is not able to function as it should, resulting in even more costly inefficiencies. 

The Importance of Due Diligence 

Deciding when the “right time” is to update a system has always been challenging, but probably never quite as challenging as it is today. With so many technological advances thrown at us at once (and across nearly every department), it’s no wonder some are confused about which way to turn. But the decision starts, as all should, with proper due diligence.  

Due diligence helps us to avoid making a quick (and often costly) decision in a time of need. With careful consideration, we may find that we don’t need an entire new system after all, but just some adjustments to what we currently have. But we won’t know if we don’t take the time to do our homework first. Some improvements and enhancements can be done without any purchases whatsoever. It all depends on what is currently in place and the goals and objectives involved. Asking the following questions is a good start: 

  • Where can improvements be made?  
  • What else is out there?  
  • What are our competitors doing? 
  • Is there anything that can be done to improve our current systems and processes? 
  • What are the benefits of the new system?  
  • Are we able to devote the time and resources required to implement this new system properly? 

This last question is extremely important. As with any update, it’s not only about the system, but also the process to use that system. You can have the newest, most up-to-date technology, but if the team was not properly trained and a new standard operating procedure not created, the new system will not produce the results it was expected to. Additionally, the team may enter data incorrectly, resulting in error-prone reports and potentially costing the company even more money. For example, if it relates to a compliance issue, the company could incur penalties and interest as a result of these inaccuracies. It’s crucial that everything pertaining to that system be updated at the same time in order to reap the benefits. 

Currently, some of the most common considerations when deciding whether to update to a new system involve automation and cloud software. 

Automation 

Too many business leaders spend too much time completing mundane, everyday tasks that are repetitive and simple. Not only is this inefficient, but it is also not cost effective. Automation is the single best way to solve this problem. It allows employees to complete manual tasks at the click of a mouse, freeing up their time to work on more important matters. 

Cloud Software 

We saw firsthand during the pandemic how connectivity and access to information were keys to keeping our doors open. In most instances, this can only be achieved with cloud-based technology. With more people continuing to work remotely, at least some component of this may become more of a necessity than a luxury going forward. 

With all of the changes we’re experiencing, businesses should review their current processes or have a third party come in to get a professional, outside perspective prior to making any decisions regarding updates and/or purchasing new systems. The costs of keeping the current system should be compared to the costs of purchasing a new one, considering not just the monetary value, but other benefits, such as better security, increased efficiency, increased compatibility, more satisfied teams and customers, and reduced costs. If the decision is made to purchase a new system, a strategic plan for implementation should be created, including new processes and training, so that the business propels forward uninterrupted.  

Barker Associates provides strategic guidance and outsourced CFO services to companies of all sizes. We can provide the higher level of strategy your company needs to grow, including advising on systems and process updates. If you need assistance, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100.  

Is Your Idea Worth Investing In?

Mindy Barker | Barker Associates

Every year, entrepreneurs spend countless hours planning and preparing for the perfect investor pitch. They research, practice, and pick apart every piece of their idea and/or business to find success in the form of an investment to propel them to the next level. However, all of this time spent preparing and practicing can be futile if there is not a strong foundation first; namely, “Is the business built on an idea worth investing in?”  

This is not always an easy question to answer with so much personal time, attention, and energy focused on developing that idea. Saying there is a little bias may be a rather large understatement. That’s where gaining further perspective allows you to assess whether it is, in fact, a “good idea” or not. And even if it is a good idea, exactly how good is it?  

To decide, you have to consider not only if it is a “good idea,” but if it is a profitable one—two very different matters. Profitability depends on many internal and external factors, only one of which is how good the actual idea is in the first place. And it can only truly be evaluated by looking at it from different perspectives. Understanding these factors from various perspectives, and how they influence profitability, will give your idea a stronger leg to stand on when under the certain scrutiny you’ll face in that investor meeting.  

Seven Questions and Perspectives to Evaluate Your Idea … Before the Pitch 

  1. What do you think makes your idea unique? 

Think about you as your own customer, not as an inventor and/or entrepreneur who spent months or years perfecting a product or service. Consider what specifically makes your idea unique and interesting. Why would you choose what you offer? Once you’ve identified your value proposition, use that as a baseline when considering other perspectives.

  1. What do others think make your idea unique? 

Now that you have your baseline, start asking others the same questions—family members, friends, strangers, fellow entrepreneurs. Record their answers and analyze where they fall according to your baseline. Look for any patterns or weaknesses and think about how to address them. Take the time to consider the results of your research and how they affect your baseline. 

  1. What is your competition doing? 

Once you have a better understanding of your customer perspective, take a thorough look at your competition. What are they doing differently? What are they doing the same? Similarly, look at trends in the market and your specific industry. Where does your business fit in? What pain point does it solve that your competitors are missing? What are your differentiators?

  1. If you’re not already in the market, how will your competition react when you enter it? 

Getting your idea to market is one thing, but keeping it there is entirely another. Consider the impact your idea could have on the market and how competitors might respond. This is an extremely valuable perspective to have when preparing for a pitch.

  1. What will critics say? 

This is often overlooked. Why? Because it’s unpleasant! We don’t want to hear the bad feedback. It’s so much better to relish in the compliments. But this is crucial. Think about the perspective of those who have negative opinions of your idea or business. Is there any validity to them? If so, how can they be addressed? Taking in the thoughts of critics is incredibly important for ensuring you are not missing the mark. If you don’t address them, your investors will.

  1. Do the numbers make sense? 

Numbers don’t lie. There is no gray area. Either your business can be profitable or not. If the numbers aren’t there, there is no hiding it. Consider the following:  

  • Are there holes in your research?  
  • Was there an error in the data?  
  • Is there any way to lower costs without affecting quality? 
  • Is there any way to increase distribution? 

Numbers are a massive factor in any investment. Ensuring yours make sense will go a long way with investors.

  1. How much sentiment is attached to your idea? 

Now that you’ve examined the perspectives of others, it’s time to reexamine your own perspective again, especially its weaknesses. One of the biggest mistakes someone can make when pitching an idea is getting too sentimental. Don’t get me wrong—you want to tell your story. It makes the most impact. But emotions and sentiment will never take the place of profitability. And if you are too sentimental, it may appear that you are trying to cover something up. It’s crucial that you are able to separate your sentimentality to the project from your logical stance on the viability of it as a profitable enterprise.

Barker Associates provides strategic guidance and outsourced CFO services to companies of all sizes. We can provide the higher level of strategy your company needs to grow, including helping to prepare for that ever-important pitch. If you need assistance, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100.  

Beyond the Numbers – More Than Ever, CFOs Need a Strategic Mindset

Beyond the Numbers – More Than Ever, CFOs Need a Strategic Mindset 

Mindy Barker | Barker Associates

I don’t think anyone would doubt the importance of the CFO role (or at least I hope they wouldn’t!). But what many don’t understand is the magnitude of this role’s transformation over the past several years. It’s not just about financials. And it’s much more than tracking and compliance, as some may have thought. At the base of this transformation is an increased emphasis on having a strategic mindset.  

Organizations are facing unprecedented challenges in supply chains, labor supplies, and overall skills gaps that must be rectified, or at least minimized, at every level and in every department. CFOs are plagued with the continued uncertainty these challenges bring, as they attempt to align the organization’s current and projected finances with the organization’s growth goals and strategies. 

So, how can CFOs exceed expectations and sustain organizational growth? What separates the good ones from the great ones, especially in light of today’s challenges? What are the successful CFOs doing differently? Simply, they have the required financial acumen and leadership skills of most, but also a strong, developed strategic mindset. 

Strategic Mindsets Lead to Success 

CFOs look at the drivers of business growth to deliver both short-term financial gains and sustain long-term organizational growth. But to be successful at both requires a strategic mindset. In a recent Forbes article, a strategic mindset is listed as one of the top attributes of successful CFOs. “A strategic CFO understands that success tomorrow depends on creating the right financial structure today. The right person will work alongside the CEO to create a viable financial plan that will carry the business through future growth stages. This includes thinking several steps ahead to minimize risk.” 

With a strategic mindset, CFOs often consider these types of questions: 

  • How much cash do we need on hand at any given time? 
  • How much should we have in reserves? 
  • Where can we reduce costs? 
  • What actions should we take to increase revenue? Short-term? Long-term? 
  • Are our financial processes ready to scale? If not, what do we need to do so they are? 
  • At what point will we be able to position ourselves for a merger or acquisition? 

Seeing beyond the numbers to both the opportunities and risks that can only be found “in between the lines,” a successful CFO becomes a trusted strategic business advisor to the CEO. And a strong relationship between the two helps the financial and operational strategies stay aligned. “Strategic leadership from the CFO’s office in these scenarios can keep the company moving forward. When the chemistry between the CEO and CFO is right, their unique leadership traits will sharpen each other and work in tandem to get the best possible results for the company.” 

As with much else in life, this comes down to strong relationships. Without the ability to communicate and collaborate effectively with others, a strategic mindset alone will never move the needle. We are at a time where everything in business is seemingly connected. Leaders can no longer operate in silos—there is simply too much at stake. 

For example, the CFO should take that same strategic mindset to collaborate with the Chief Information Officer with respect to technological advances and data, with the Human Resources Director to manage the organization’s culture and employee experience, and the COO to decide where the most effective operational investments can be found. In this way, CFOs are about entirely more than the financials. In fact, they are the drivers of organizational transformation.  

Barker Associates provides strategic guidance and outsourced CFO services to companies of all sizes. We can provide the higher level of strategy your company needs to grow. If you need assistance, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100.  

How Remote Work is Influencing Financial Recruiting and Retention Strategies

Mindy Barker | Barker Associates

Over the past few years, we have learned that we are entirely more adaptable than we ever thought possible. We’ve learned that we can not only survive, but actually thrive in extreme disruption. And much of that adaptation and success is based on the ability to work remotely.  

Today, remote work has become a priority for most employees … in some respect. In fact, in the 2022 Salary Guide from Robert Half, 75% of workers said they wanted to work at least part of the time remotely, and 34% said they would quit a company that didn’t allow remote work.  And those who work in finance or accounting departments are no exception to these numbers. 

While our new remote or hybrid workforce has been around for two years now, it is no longer about logistical prowess to achieve social distancing in a global pandemic. Rather, it’s about the reprioritization among us all that includes increased flexibility and enhanced employee experiences. And while these are incredible benefits for candidates and employees, CFOs and other leaders aren’t lacking in advantages either – namely, a massive widening of the talent pool.  

In the same survey, 35% of finance and accounting leaders said they expanded their searches geographically to find the right candidates. Having employees across time zones also leads to the ancillary benefits of nearly automatically increasing the organization’s customer service, while helping with work-life balance at the same time. Consider an employee on the east coast who no longer has to solve a problem at 7:00 pm because they have a west-coast colleague who can easily take care of it within business hours.  

Realizing our remote world is not going anywhere, CFOs are now considering how to revamp their recruiting and retention strategies around it. It’s no secret that competition is fierce. To successfully recruit top talent and keep them, they need to have structured strategies that have been adjusted to our new realities.  

Recruiting 
When recruiting for finance or accounting positions, there are, of course, the “typical” qualifications and skills needed – certain degrees and designations, attention to detail, accuracy, confidentiality, ambition, embracing continuous learning, and problem-solving skills. That’s not changing. But now, more recruiting efforts are shifting to look not merely at the skills for the specific position or the necessary education and certifications, but the skills needed to work in a remote environment successfully.  

To work remotely, CFOs need to look for candidates who can exhibit discipline, initiative, and the following abilities to:  

  • stay focused,  
  • be a self-starter,  
  • work well without supervision, and  
  • work well under pressure.  

Additionally, by the very nature of remote work, they need to have more advanced technological skills or, at a minimum, be willing to learn them quickly.  

Retention 
So much of retention is based on organizational culture – whether we are in-office or remote. And the flip side of the flexibility advantage that remote work provides to employees is isolation, especially when some employees are in the office and others are not. Remote workers could feel less appreciated or valued, or think that they will be passed over for opportunities since they are not directly in front of their leaders. They can also start to feel detached from their work and those with whom they work. 

To ensure the organization has a people-first culture, these fears (real or perceived) must be minimized. Leaders should ensure remote workers are getting the time and attention needed – that they are acknowledged, promoted when justified, and provided equal opportunities to training, continuous learning, and resources, including access to the financial tools needed to do their jobs efficiently. Proactively sharing information, providing peer mentoring or coaching, and focusing on clear, timely communication, with opportunities for feedback are other helpful ways to keep them involved. Essentially, it comes down to the human connection, even when you aren’t physically together. Remember, technology is great, but alone, it will not build a culture your employees won’t want to leave.  

Barker Associates provides strategic guidance to companies of all sizes. We provide the higher level of strategy your company needs to grow, especially as it relates to using the right strategies to keep your company running efficiently. If you need assistance, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100.  

Inflation is About More than Higher Prices for CFOs

Inflation is About More than Higher Prices for CFOs 

Mindy Barker | Barker Associates

Go to any grocery store, restaurant, hotel, or gas station and it’s clear that 2022 is giving new meaning to the word inflation. In fact, inflation in the United States has soared to its highest point in 40 years. Between the supply chain disruptions, labor shortages, unprecedented government stimulus, and shifting consumer spending that have occurred around the world, and particularly in the United States, companies are feeling the crunch (and some may say, seeing the opportunity).  

In Deloitte’s recent survey, CFO Signals™ , inflation was listed as a top concern for three-quarters of CFOs. And a vast majority, 76%, indicated that raising prices would be at least part of their response to offset increases in costs. This seems logical, of course, but there’s much more to it, with ramifications that can extend far beyond this year.  

For CFOs, it’s not merely about paying more for products and services or raising prices in an attempt to counteract those increases, it’s about reprioritizing strategies in an incredibly volatile environment. Specifically, many will not only adjust prices, but also look for cost-saving opportunities and prioritize the sale of high profit margin products. While the uncertainty creates challenges, it can also create opportunities when the company is open to them. 

There are a variety of strategies that CFOs can utilize. According to an article in CFODive, “[i]n addition to raising prices, companies are adjusting to higher inflation by cutting costs, negotiating with suppliers, diversifying their supply chains and relying more heavily on advanced technology such as data analytics.” 

The strategy deployed will likely depend on the size of the business and how many products or services they offer, among other factors. For example, smaller and medium sized businesses haven’t been as willing to raise prices. They are more often on the forefront with their customers and, with regular interaction, are trying to keep prices the same for them. Yet, they are experiencing the drastic increase in their cost of goods sold, as well as their payroll to get top talent in this highly competitive market, just like everyone else. And if they don’t increase their prices, they may soon find themselves unable to keep up and out of business. 

Additionally, most businesses have different profit margins for different products. It only makes sense to try to sell the higher profit items sooner rather than later. This can be accomplished in a number of ways from merely suggesting the other product to the customer or explaining that the original product will be delayed, but they have an alternative for it. Companies do this all the time to get the high-profit product out the door faster and by extension, get more money into the accounts faster. 

Navigating the uncertainty around this extraordinary high inflation will be a priority for business planning in upcoming quarters. For CFOs, they must consider the following questions: 

  • How long will the supply chain disruptions last? 
  • How is consumer spending shifting? 
  • How much are wages increasing? 

After careful consideration of these questions, CFOs can analyze future scenarios (inflation levels out, continues to increase, or drops as drastically as it has risen) and develop strategies under each. They can then determine the impacts to operational strategy, human capital, supply chain, pricing, restructuring, real estate, and taxes for both the short and long term. 

Barker Associates provides strategic guidance to companies of all sizes. We provide the higher level of strategy your company needs to grow, especially as it relates to the issues affecting the bottom line, such as inflation and the strategies used to combat it to keep your company running. If you need assistance, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100.  

Credit Check – It’s National Credit Education Month

Credit Check – It’s National Credit Education Month 

Mindy Barker | Barker Associates

March is National Credit Education Month. If you’ve ever applied for a credit card or a car loan, you know the importance of having good credit. At its foundation, it demonstrates to a lender how likely it is that you will repay your debt on time. Having good credit benefits you in countless ways, while having bad credit can challenge you in just as many. 

This month serves as an important reminder for us all to check our credit scores and implement tools and tips to help improve it, if need be. Overall, it’s about increasing our knowledge around credit, including the amount of debt we carry, the age of our credit history, reports to collection agencies, the effect of late payments, high interest, and hard inquiries, and the number of accounts we have. 

While this monthly designation is focused on personal credit, both maintaining it and improving it, it also presents an ideal opportunity to look at the importance of business credit. Just as with personal, its significance lies in showing a lender your reliability in paying back debt on time. Simply, consistently monitoring the financial health of your business is a crucial part of running a successful business. 

What is a Business Credit Score? 

Similar to a personal credit score, a business credit score (also known as a commercial credit score) is the primary indicator of your business’s creditworthiness. It’s a number that indicates if a company is a good candidate for a loan or other extension of credit by vendors or partners. One difference from a personal credit score is the numbers themselves. Instead of the 300 to 850 on the personal side, a business credit score ranges from 0 to 100 and will be reported most often on Equifax, Experian, and Dun and Bradstreet. 

To determine if your business is financially risky or stable, consider the following factors: 

  • a company’s credit obligations;  
  • repayment histories with lenders and suppliers;  
  • any legal filings, such as tax liens, judgments, or bankruptcies;  
  • how long the company has operated;  
  • business type and size; and  
  • repayment performance compared to that of similar companies. 

Why is Business Credit so Important? 

If a company wants to take out a loan to purchase equipment, lease property, or obtain better terms on a supplier contract, the lender/supplier will consider its business credit score. The lender will also consider the company’s revenue, profits, assets, liabilities, and collateral value of the equipment or property, if applicable. Essentially, you will need your profit and loss statement and balance sheet ready for review. In some instances, particularly with small businesses, lenders often check both business and personal credit. 

Having good credit for your business will help you qualify for financing faster and easier to purchase an asset or help cash flow issues. It may also help you secure lower interest rates, saving you money over the life of the loan. Another benefit is the likelihood of getting better repayment terms with suppliers, helping your cash flow remain positive. Further, having a strong business credit score can help protect your personal credit score. Without business credit, lenders will have to rely on your personal credit. You should try to avoid this situation, if at all possible, as it increases your credit utilization ratio, and consequently, increases the likelihood of a negative impact on your personal credit. And if something happens with the business, it could take you years to fix it. 

Five Steps for Establishing and Improving Your Business Credit 

The following five steps can help establish and then improve your business credit score: 

  1. Open a business bank account 
  1. Open a business credit file (for example, on Dun & Bradstreet) 
  1. Get a business credit card 
  1. Establish a line of credit with your suppliers or vendors 
  1. Pay all of your bills on time 

Barker Associates provides strategic guidance to companies of all sizes. While we provide the higher level of strategy your company needs to grow, we also never minimize the basics, including the importance of business credit. If you need assistance, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100.