Archives#virtualcfo Archives — C. Lynn Northrup, CPA, CPIM

Starting a New Business

February 17th, 2016

One of my students asked me to share advice and information on starting a business. After thinking about his request, I recalled a recent article posted on the Business Owners Zone. It is a must read for any person considering a new business venture and was posted by John Benson who successfully started a business and lived through the process.

I thought the most critical question in the article was “do you have a business plan?” A business plan will help to answer the question of whether you have enough money to start and grow the business. The article also touched on the psychological and emotions issues that should be addressed before launching a new venture.

Business coaches weren’t mentioned in Benson’s article but I think having one is a good idea. In a previous blog post I pointed out that business and life can be a lonely journey. Having an experienced coach can be the difference maker between success and failure.

Starting a new business requires serious research and analysis. Here are some questions to consider:

  • Am I qualified to do this work?
  • What is the cost to start this business?
  • What resources do I have to commit to the business?
  • What is the competition?
  • How successful is the competition?
  • Will I need help to run the business and can I get the help I need?
  • Can I run the business from my home?
  • Who can I talk to about starting this business?
  • Do I need a business coach or advisor?

These are just a few areas you need to evaluate. Many other questions will emerge as you prepare to start your journey.

One of my other blog posts dealt with the flower exercise to help you understand your skill set to get a better handle on how well equipped you are to start and run a business. The self-examination process should be part of your homework before making a leap of faith into something that’s not a good fit.

If you make the decision to move forward and follow your dream you will need an expert financial advisor. I strongly recommend engaging a CFO advisor to help you set up a cloud based accounting system. This will provide the necessary financial tools to help manage your new business. Having a good accounting system and being linked to your own virtual CFO is an essential ingredient to success.

Your business coach together with a virtual CFO will help you craft a strategy and develop a business plan. These steps combined with a solid accounting system will give you the tools to measure and monitor your business results. Measurement is critical. If you can’t measure it, you can’t control it. If you can’t control it, you can’t manage it and improve it.

The Experienced CFO

February 3rd, 2016

Good CFOs are hard to find. Being a CFO is more than presenting some dashboards and talking about a few financial ratios. They need specialized skills and experience to assist business owners in a variety of different ways. I understand these challenges based on over 30 years of experience as a controller and CFO.

Probably the most critical area is guiding development of strategic plans and structuring action plans to support the strategy. Another challenge is managing cash and ensuring that the business is properly financed. This means establishing an effective capital structure together with financing plans that fit objectives and business growth.

Driving business performance and the ability to use the tools required to support growth are also essential. These skills include understanding sales, marketing and the underlying cost structure to support growth. Business analysis, performance measurement and cost accounting are just a few additional skills that are essential.

Prioritizing capital investments and helping guide business owners to make the right decisions on the right projects is another area where CFOs can help business owners. Risk management is a key factor in allocating capital and applying enterprise risk management steps is essential to success.

Other high priority areas include buying and selling companies and succession planning. I can help you in these areas based on my experience with a top consulting firm who specializes in these areas. I can help you gain a competitive advantage in today’s complicated business world.

Good CFOs are hard to find. Most talented CFOs are already employed by larger companies. Small business owners should look for talented advisors capable of using cloud technology and tools allowing easier access to this hard to find skill set. It also reduces the cost of services provided. I am certified in the use of cloud accounting systems and am available to help in these areas and wrote the book on profit focused accounting.

Not all CPAs using cloud accounting and cloud technology have the training and experience to offer CFO support. These CPAs should consider collaborating with an experienced CFO advisor to work with their clients to create win/win situations.

Utilizing a skilled CFO will give businesses a competitive advantage. Business owners can’t know everything and it makes sense to access skilled experience advisors to fill in the gaps. If you are looking for a virtual CPA with extensive CFO experience or need help in this area please contact me.