How many “hats” does the owner of a small to mid-sized company wear?  The old saying about “chief cook and bottle washer” is the norm.  They are the chief executive, operations manager, marketing director, bookkeeper and maintenance crew...and anything else that comes along.

Given the laundry list of tasks assumed by your typical entrepreneur, why is an “outsourced CFO” so important?

A key role of an “outsourced CFO” is to work with the owner(s) to interpret past results and develop a comprehensive financial/operational plan to take their business to the proverbial “next level”.  We refer to this process as "Business Improvement Services".

We find that in many small businesses, there is only one “Key Performance Indicator” – how much cash is in the bank account at the close of business today.  An experienced CFO will help identify the true profit drivers in a business, establish methods for tracking those drivers, and then assist the owner(s) with evaluating results and variances from plan (both positive variances and negative variances).

We begin this process by helping the business owner assess where he is and where he intends to take the business.  A key component to this assessment is a review of existing business processes and developing alternatives that focus on increasing profitability and business value.

The first “business process” we focus on are the financial records and the resulting financial reports utilized within the business.  The financial records are the foundation for developing plans, key performance indicators (KPIs), goals & strategies.  If these records are not solid – we end up with confusing results and shifting targets.

Once the financial records are solid, we begin to look at the 4 drivers of profitability:

1. Increase the number of customers of the type you want to have
2. Increase the number of times customers come back
3. Increase the average value of each sale
4. Increase the effectiveness of each process in the business

The key here is not to simply focus on one of these factors, but to address all of them to achieve exponential growth.  A simple goal of 1% improvement in each of these key areas has the potential of increasing Net Profits by up to 153%!

More specifically, commit to achieving the following goals during the next 90 days:

• Increase client acquisition by 1%
• Decrease client defection by 1%
• Increase your average sales volume by 1%
• Decrease your cost of sales by just 1%
• Decrease your operating costs by 1%

I assure you that the results far exceed the sum of these simple changes.

During the month of June, we are offering an initial Profit Improvement Potential evaluation (valued at $495) for an introductory charge of $99.  You will receive a proprietary questionnaire, a customized Profit Improvement Potential analysis, and 1 hour of our consulting services to review the results of the analysis.

Please contact Ron Ratliff, CPA at (512) 206-4228 or by e-mail at PIPReport@ronratliffcpa.com to schedule your review.