Brian E. Christian, B2B CFO®

In working with my clients, I have solved several common issues with which they previously struggled. All of them are critically vital to profitable growth and sustainability. The good news is that with focus and accurate analysis they can be rectified. In no particular order, here are five that I see most often:

1. Lack of Timely, Accurate and Meaningful Financial Statements. All business decisions have financial implications. Without basic financial information, it may be a shot in the dark. Many times the financial statements are too old (not timely), the business owner doesn’t believe they contain correct information (not accurate) or the financial statements support the preparation of the company’s income tax return, and not necessarily the successful running of the business (not operationally meaningful). They usually only become important when the business owner needs to meet with the bank.

2. Lack of Cash Management tools and expertise. As we all know from operating a business, cash is king! It is the common denominator for all businesses, NO CASH = NO BUSINESS. Other than the current cash balance (most of the time determined by looking at the bank’s balance) most small businesses don’t manage their cash. Cash management includes understanding your business’ “operating cycle” (i.e. cash to cash cycle). To improve your “operating cycle” it is imperative you understand what it means, how to calculate it, and what influences it before you can improve it.

3. Poor Pricing Management. Setting the appropriate price of your products or services will drive revenues and just as importantly the “gross margin” for the business. Do you have an accurate assessment of the fixed and variable costs of producing your product? Can you accurately assess your profitability by sales region, customer, product line or service?

4. Lack of Systems & Processes. Processes, whether documented or not, exist in all businesses. It is the way you perform the work necessary to produce your products or services. In most small businesses, the underlying processes to accomplish the work are rarely documented or reviewed as a whole (i.e. system). Developing efficient and effective systems and processes generally reduce costs and/or improve productivity.

5. Too Much Minding and Grinding and Not Enough Finding.
Jerry Mills, founder and CEO of B2B CFO®, developed a simple organizational model for small businesses. He identified the three roles he found in closely held businesses as Finders, Minders and Grinders. Grinders represent the employees whose focus is about today. Minders live in the past; their work is in the administrative, accounting, customer service or warranty departments. True Finders live in the future. They are the visionaries, innovators, and relationship builders. They provide the passion and the drive for the business to grow and succeed and pull the entire company into the future with them.

If any of these challenges sound eerily familiar, I can help! I would thoroughly enjoy the opportunity to visit with you to share more about my background, our firm and the unparalleled value proposition that B2B CFO® can provide to you and your business. Part of our value proposition is a free Phase 1 analysis of your business performed at your convenience.

Recently I was visiting with a very good commercial lending officer. We were discussing the current economic climate and the trends we both have witnessed lately with respect to commercial and Industrial (C&I) lending.
He made an off-hand comment that I probably did not adequately appreciate at the time, but upon reflection it hit me like a brick!
He said: “I wish potential clients would perform a little due diligence, or at least a half hearted attempt to find out if we are a good fit for their company.” He went on: “The deepest questions I get are:
• “How much will you lend me?’ and,
• What will it cost me?”
Upon further thought, I had the following considerations:
A typical bookkeeper, office manager, accountant or controller will usually cost a company between $25,000 and $90,000 annually (plus taxes and benefits).
When hiring for these positions, business owners/CEOs and their managers will typically go through many, if not all, of the following steps in search of the “best fit” for their company:
1. Create a detailed job description.
2. Write and place a classified advertisement in a newspaper or post the position on an internet job board.
3. Spend hours sifting through resumes or job applications
4. Spend hours interviewing qualified candidates in multiple rounds of interviews.
5. Spend hours negotiating with multiple candidates.
The above are pretty routine, common place and acceptable steps that businesses take to ensure they hire the most qualified person and maintain their desired culture.
What isn’t routine and common place are similar considerations given to what kind of institution they will borrow money from. Considering that the interest incurred on a term loan or line of credit ranging in size of between $500,000 and $1,500,000 will fall roughly into the above annual expense range and last for several years, isn’t it appropriate for the business owners/CEOs and their managers to take more steps to determine if they are “hiring” the right lending institution?
It is entirely appropriate for a business owner/CEO to do some self examination first. A good start is to ask some or all of the following questions:
• What do I want out of my bank besides money?
o Can my internal controls be enhanced with cash management tools? such as:
 Positive pay.
 Dual control over electronic funds transfers and check signing.
 Investment sweeps of idle funds.
 Automated advances from and principal payments to our line of credit.
• How much time am I willing to spend educating a bank about my business?
• What am I financing today (in terms of assets) and how do I expect that to change over the forseeable future?
• What kind of growth can I reasonably sustain and how much growth am I comfortable with?
• From an outside perspective, what would someone (a banker) perceive as operational risks?
Almost without fail, I find that bankers are comforted to know that a business owner/CEO has gone through something resembling the above exercise, because it leads to a healthy discussion of the business and the bank’s ability to meet its needs. Below is good example:
• What kinds of cash management programs do you offer and how might they benefit my company and strengthen our internal controls over cash?
• What do I have to provide you with so that you are comfortable with, and confident in, our ability to profitably run our business?
• Currently today, we have a term loan on some of our equipment, and a line of credit that finances our accounts receivable and inventory. We currently lease our building, but have the right of first refusal to purchase it. Can your bank finance all of this for us or will this be a problem in the future?
• We have historically seen top line revenue growth of 10-15% annually with spikes of up to 20%. Does this present a financing issue for you over the next few years?
• We operate a fleet of trucks that transport petroleum products. As such there is some risk of environmental contamination both on and off-site. We do have internal policies and procedures vetted by our insurance underwriters that mitigate most of it. Do you see this as an issue in obtaining financing through your institution?

B2B CFO NAMED IN PRESTIGIOUS INC. 5000 LIST

184% Growth Earns B2B CFO Spot in the 2010 List of Fastest
Growing Companies in America

Phoenix, Ariz. August 24, 2010 – B2B CFO, nation’s largest
provider of CFO services to small businesses, has been named to the
prestigious Inc. 5000 list of fastest growing companies in America.



Now in its 29th year, Inc. Magazine’s annual ranking judges US-based
and privately held companies by their revenue growth. This year’s
list was ranked on the percentage in revenue increase from
2006-2009. B2B CFO’s growth earned 84th place in its industry.

“There are approximately 27 million small businesses in the U.S.
today,” said Jerry L. Mills, founder and chief executive officer of
B2B CFO, “It is a huge honor to be among the fastest growing and the
most successful businesses in the country. Our firm has experienced
tremendous growth over the past few years and we are on track to
continue expanding. I am especially grateful to all of the firm’s
dedicated Partners who continue to advocate our services around the
nation.”

In a personalized letter congratulating B2B CFO on this
accomplishment, Jane Berenston, editor-in-chief of Inc. Magazine’s
wrote “Congratulations: your company, B2B CFO, has made the 2010
list of the fastest growing private companies in America. This
achievement puts you in rarefied company, especially if you consider
that over 27 million businesses are registered in the USA. The elite
group you’ve now joined has, over the years, included companies such
as Microsoft, Timberland, Visa, Intuit, Jamba Juice, Oracle, and
Zappos.com. I look forward to congratulating you in person in
Washington, D.C.”

B2B CFO’s growth is reflected in numerous awards this year. The
company was also recently named in ACE Corporate Growth Awards,
which recognized the most successful and fastest growing companies
in Arizona.
In August 2010, B2B CFO has grown to 170 Partners across 39 states,
representing 5,000 years of cumulative experience. Each Partner is a
seasoned financial executive who serves as CFO to growing businesses
on as-needed basis. Approximately 80% of the Partners have a
background that includes senior executive positions at the Big Four,
and all of the Partners have held high level executive finance
positions in various industries in corporate America. Together, B2B
CFO Partners work with more than 500 businesses in the nation with
combined annual sales of more than $3 Billion.

Jerry L. Mills and many of the B2B CFO Partners regularly dedicate
time to educate business owners on financial matters. Mills is a
frequent speaker and contributor and has been featured on many
national media networks including FOX Business, Fortune Small
Business, Smart Money and many others. Mills is also the author of
The Danger Zone – Lost in the Growth Transition, and Avoiding The
Danger Zone – Business Illusions, both business non-fiction books
that help entrepreneurs understand and build a strong financial
strategy.

“We look forward to participating in the Inc. 500|5000 conference in
Washington, DC this fall,” added Mills. “Along with my colleagues, I
look forward to the October 2nd awards ceremony and to meeting the
entrepreneurs that created the other 5000 fastest growing companies
in America.”

About Inc. Magazine

Founded in 1979 and acquired in 2005 by Mansueto Ventures LLC, Inc.
is the only major business magazine dedicated exclusively to owners
and managers of growing private companies that delivers real
solutions for todays innovative company builders. Inc. provides
hands-on tools and market-tested strategies for managing people,
finances, sales, marketing, and technology.

Inc. Magazine’s 29th annual Inc. 5000 ranking of the fastest-growing
private companies in the country is available online at
www.inc.com/inc5000/list

About B2B CFO

Headquartered in Phoenix, Ariz., the firm was founded in 1987 by
Jerry L. Mills. B2B CFO is the nation’s largest CFO firm serving
entrepreneurial, growth and mid-market companies with revenue under
$75 million. The firm’s partners have an average of 25 years of
experience and each individual partner is a senior level executive
with a broad range of expertise. Please visit online at
http://www.b2bcfo.com/