Privately held business with insufficient senior financial talent sometimes lack a deep understanding of the financial operations and metrics of their business. Consequently, when faced with challenges — poor results, insufficient working capital, or client challenges — can’t adequately address their issues. A high level financial resource can partner with management to address serious issues impairing the business.
Cash Flow Analysis
The need for working capital is often a huge issue for companies that are growing quickly and many companies don’t know how to forecast how much working capital they have or how much they might need in the future. And working capital is often the most important topic on your banker’s mind — and to compute you need to have a solid understanding of your companies cash flow generation, not just P&L performance — we can help.
Design a management reporting strategy so that top and middle management have important data at their fingertips make decisions regarding their business. Generation of such data allows management to more efficiently run their business, determine which clients or lines of business are profitable and which are drags on the business and which ones use significant amounts of working capital. Strategic decisions based on good financial data may allow you to run your company with smaller bank facilities and/or with less stress. There may even be the opportunity to increase the profitability from underperforming clients.
Owners often grow their businesses only to see profits stagnate or even decline. The trick is to maintain relative profitability (EBITDA, gross profit) while keeping absolute profit growing. This facet of a business needs constant attention and if you are growing quickly you need high level financial talent to help you optimize the financial performance of your business.
Profit Focus CFO has had success in helping clients design insurance programs (we are not an insurance broker and offer no products in this space) that result in lower net costs to their clients. One of our greatest successes was partnering with a client and a new insurance broker to facilitate the entry to a captive insurance program that resulted in net insurance (for workers compensation and general liability) that was about 33% less than a traditional insurance program — this resulted in savings to our client of several hundred thousand dollars per year.