Every business should have a Chief Financial Officer (CFO). By using a CFO, you have a skilled individual helping manage the health and stability of your business. This individual will help you plan and make obtain goals while telling you what’s not working financially and what has to be changed. Here is the secret. That person should be you!
You need to know your business inside and out. For example, if you own a restaurant, you need to be educated and able to perform every role including cook, hostess, and manager. Have a clear understanding of what goes on at the front end of your business and all that takes place in the back office. Always know your books. The business you’ve built is apart of you and you’ve worked hard to establish it. The worst thing you can do is give authority to another individual by having minimal awareness regarding your company’s finances.
For a startup, this may be an easy concept. At first, you naturally wear all the hats. However, it’s easy to become disconnected over time as your profits grow and you hire more and more staff. Even startups can manage better when a true CFO or accountant is present to help with the books and taxes. This does not mean that a business owner should ever stop being their own financial officer.
As a business owner, you will be more effective at leadership and maintaining the wellness of your business if you consistently know the weekly figures. Know where every penny of your money is going!
Learn from businesses in your local community that tanked pre-COVID-19, or from the endless list of celebrities who found themselves bankrupt and in tax trouble. After all, a seven-time Grammy Award winner, Tony Braxton, found herself bankrupted twice. At the first sight of trouble a good business owner plans for survival. Get a second opinion. Even with you and your official CFO, it doesn’t hurt to gather further information from a business counselor who is seasoned and has seen companies make it through all kinds of financial storms and shipwrecks. Just like you should have three to six months of emergency funds for your personal expenses, you should have three to six months of emergency funds for your business. This difficult to establish, but it is possible and should be the goal for all business owners from startup to corporation.
If you are looking to find an investor, this individual wants to know the numbers. Represent yourself and your brand boldly by understanding the cash flow of your business. Moreover, when you open a business account you will be asked how much you intend to make annually. Real figures matter greatly, and it’s nice that you have a “book” person, but you still need to be your own CFO!
Writer, Luxury Travel Advisor, Motivational Speaker
Speaking Topics: Breaking Free from Domestic Violence, Overcoming Adverse Childhood Experience, and Live, Learn Travel