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Ready for your Mid-year Review?

Well, it’s that time of year for business owners to consider doing a Mid-Year review.

What is a Mid-year review? It’s stopping to catch your breath long enough and taking an objective look at your business – how the first half of the year was and how you expect the second of the year to be. A mini Strategic Planning session, if you will.

A Mid-year review involves looking at all aspects of your business including:

  • Financial results – How did they compare against budget? How are your ratios and KPI’s vs. expected results? Most importantly, how is you Cash Flow?
  • HR – When was the last employee survey taken? Are your employees working well together? Is turnover at an acceptable level?
  • Sales & marketing – Has revenue met your expectations? Have you identified why variances exist? Is your revenue mix in line with your goals or should you make some modifications to your marketing efforts to focus on higher ROI products/services?
  • Operations – Are your products/services being delivered timely? Have your margins changed/costs increased (i.e. service & installation costs)? Have quality or customer satisfaction changed?

Lisa Wood from New Sprout Media asked the quintessential question in her blog – Are you on track?

You have goals, right? How well are you doing relative to your goals? I can’t think of a better way to frame the reason to do a Mid-year review.

According to John McAdam in his article on this subject, a Mid-year review includes the following:

  • Evaluate performance
  • Reallocate resources to better achieve goals.
  • Make more money than you would have otherwise.
  • Take stronger corrective actions than you would have without a mid-year review.
  • Provide leadership for your team—too much silence taxes milestone goals.
  • Offer focus for your team.

John points out that taking time to do this is essential and, I would add, one of the most rewarding and enlightening strategic exercises you can do for your company.

Daniel Dreher points out in his article that you can achieve better focus and reap the following benefits:

  • Reviewing now provides more time to implement changes.
  • You can act while other businesses are procrastinating.
  • You probably have a good idea of how the year is going.
  • A review offers an opportunity to re-grip the reins.
  • Nothing good comes from waiting for more numbers.
  • Opportunities may exist now that will disappear later.
  • There’s no better time to re-energize employees.

Daniel adds that this exercise will help you focus and put your company in a better position going forward.

One critical item I’ll add is don’t forget the What, Who, Where, When, Why and How questions.

As with any exercise in planning, make sure you plan the discussion/meeting upfront and allow sufficient time and input to have a great result. Contact me, Andrew Tucker, for help with this process or other aspects of your business. I can be reached by e-mail at andrew@aetuckerconsulting.com or by phone at 704-651-2216.

Tags: CFO, business tips, Chief Financial Officer

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Does Your Business Need A CFO?

Entrepreneurs and small business owners can have excellent skills at managing their companies, including financial matters, but as the company grows and becomes more complex, most will reach a point when they realize it is time to step back and allow the financial matters to be handled by an experienced and qualified CFO. That important addition can make a tremendous difference in company operations and profitability.

When a business owner is feeling the pressures of too much to do or is overloaded and overwhelmed by the demands of financial planning, record keeping, financial reporting and managing financial operations, it is time to bring in an experienced and highly qualified CFO to share the load. Every company, regardless of its size, can benefit from the services of a CFO.

Common questions a small business owner might ask when considering hiring a CFO include the following:

1. How will I know I need a CFO? Here are some indications:

• Your company’s finances take more of your attention than ever.
• You are distracted from critical revenue generating activities to handle finance issues.
• Your business is spiraling down and you cannot determine why
• You are expanding and you need help to manage it.
• You are not getting financial reports on a timely basis that you trust and understand.
• You don’t understand some of the finance related correspondence you receive.

2. What can a CFO do for my business? 

A dedicated CFO will manage the financial aspects of your business, so you can concentrate on other administrative and revenue producing tasks to support company growth. The CFO can help create accurate and reliable financial reports for better management decision making, control company costs, assess new business opportunities, and help your business move forward. In brief, a CFO will help manage financial risk, planning, record keeping and reporting for your business.

3. What services does a CFO provide? 

A CFO provides leadership and expertise in a variety of financial areas including cash flow, budgeting & forecasting, strategic planning, banking, borrowing, insurance, accounting, financial reporting and exit planning.

4. How expensive is it to hire a CFO? 

It is costly to not hire a CFO. They can be a great addition to your company in terms of allowing growth in a fiscally responsible manner. They become part of your team and can truly enhance your company’s movement toward growth.

I provide complete CFO consulting to small and mid-sized privately held companies on a part-time (also called an outsourced or fractional CFO) and affordable basis.  If you think your company has reached a point where you need a part-time CFO, let’s talk.  Please contact me by e-mail at andrew@aetuckerconsulting.com or by phone at 704-651-2216 for a complimentary assessment of your company’s financial needs.

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What does a CFO do?

Financial professionals working in companies may have different job titles depending on the firm and the industry.  Regardless of what the position is called, proper management of the financial area is critical for any organization.

Anyone with access to the internet can look up a definition of what a Chief Financial Officer (CFO) is.  According to Investopedia.com, a CFO is:

The senior executive responsible for managing the financial actions of a company.  The CFO’s duties include tracking cash flow and financial planning as well as analyzing the company’s financial strengths and weaknesses and proposing corrective actions.  The CFO is similar to a treasurer or controller because he is responsible for managing the finance and accounting divisions and for ensuring that the company’s financial reports are accurate and completed in a timely manner.

According to Marina, Guzik in her book CFO Techniques, the mission of the CFO is to:

Utilize their best abilities and partner with other senior managers in facilitation of the company’s commercial survival, stability, and growth.

There is a long list of essential tasks and responsibilities that can and should be accomplished by a CFO to help make the company successful.  The list includes:

  • Strategic Planning – are plans in place to guide the company towards its mission? Are the plans reviewed and modified when and if necessary?
  • Cash Management – does the business generate enough cash to continue operations and make a reasonable profit (if a for profit business, of course)? Is the available cash used wisely?
  • Policies, Procedures & Controls – are tasks being done in a consistent fashion from day to day?  Are adequate controls in place to protect company assets both tangible (i.e. cash, inventory) and intangible (i.e. patents, company secrets)?
  • Capital Resources and Banking – does the company have adequate funding to satisfy its mission and for the owner to meet his/her goals?
  • Information Analysis and Reporting – what do the financial results tell you? How do you report the results in a way that others can understand and use the information to make quality decisions?
  • Accounting Management, Financial Statements and Audits – are procedures in place to process information (sales, inventory, collection of cash, etc.) quickly and accurately? Do the financial statements adequately reflect what the operations have done?
  • Risk Management and Compliance – are processes in place to help the company mitigate and maneuver through the potential pitfalls of being in business?
  • Administration & HR – is there a proper level of “back office support” to handle the administrative functions of the organization?

Having a CFO (or any other position) in place will not assure success.  It takes a team effort to make a company successful.

Without properly managed growth, companies can and will lose vision and focus on the company’s mission.  Little mistakes turn into big mistakes, customers and employees leave, internal fiefdoms develop, and teamwork stops which diminishes the energy, innovation and creative talents of key employees.  Without vision, foresight and proper planning, the company can perish.

So, what kind of company needs a CFO?  Just the ones that want to be successful.  You may likely need a full-time CFO if your company has more than $50 million in sales or more than 100 employees.  However, even small and medium sized businesses can team up with an affordable CFO on an as needed basis.  Whether full-time, part-time, permanent or temporary, the key is for the CFO to fully understand and support the role of unleashing the creativity and leadership of the business owner.

I provide complete CFO consulting to small and mid-sized privately held companies on a part-time (also called an outsourced or fractional CFO) and affordable basis.  If you think your company has reached a point where you need a part-time CFO, let’s talk.  Please contact me by e-mail at andrew@aetuckerconsulting.com or by phone at 704-651-2216 for a complimentary assessment of your company’s financial needs.

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