How Financial Intelligence Informs the Health of Your Business
Just as our healthcare providers encourage us to know and monitor our “numbers” to maintain optimal health, a business owner must know and be able to interpret their company’s numbers to run a financially healthy business. Understanding and managing your financial position consistently enables sound decision-making on a daily basis in order to reach your future growth objectives.
One of my clients, Jonathan Eubank, CEO and Founder of High Country Low Voltage, recently told our mastermind group, “A few years ago, I wasn’t paying attention to my financial reports in a way that helped me make decisions that impacted the company. After working with Rick, I now know which financials to review regularly and understand what indicates a red flag. This enables me to be proactive about addressing issues before they become serious and facilitates decision-making that supports reaching our company’s goals. We’ve grown exponentially since working with Rick.”
As evidenced by this CEO’s experience, there’s power in knowing your numbers. Additionally critical to your company’s health are the accounting and bookkeeping procedures and structure necessary to produce timely, accurate financial statements. Those key numbers are the framework for understanding your company’s current financial position. I work with business owners to develop their “Financial Intelligence” and teach them how to interpret and apply what their financial documents reveal, so that they can achieve higher levels of cash and profitability, clarify goals, and support growth.
Just as we need our doctors to explain which “numbers” are important to know, what they mean, and what we should do, based on that knowledge, business owners lean on me for the same advice about their financials in order to make solid, data-based decisions.
My role starts by pinpointing the current financial position of the business, working with the business owner to determine where it needs to be, and identifying the ideal financial structure to get it there. I review company books and assess bookkeeping and accounting practices and procedures. Through discussions with the owner, I learn which financial statements they receive, their level of understanding of and ability to interpret those documents, and what statements that could be helpful are missing.
Once there is an understanding of where the business stands and where it should be, a gap analysis is prepared to show what needs to happen financially, and in other areas, to get from here to there. I work with the business owner to develop, prioritize, and implement those actions.
Part of this process involves putting in place the finance and accounting structure necessary to generate timely and accurate financial statements in a format that facilitates making sound, strategic decisions as the business moves forward. Rather than having to learn all there is to know about that documentation, I’ll help the business owner develop the level of Financial Intelligence needed to know:
- Which financial statements to focus on
- What information he or she must be able to understand in order to keep a pulse on the health of the business
- How to interpret and apply that information to optimize cash flow and profitability, to fuel growth, achieve the financial goals of the business, and build personal wealth.
Wired to get to know people, relationships are a foundation of my business. I do my best work when I have healthy personal connections with my clients. I’ve learned that many owners and CEOs – especially of small businesses and in entrepreneurial situations – don’t have anyone with whom they can deeply discuss, one-on-one, the difficult issues they face. As a CFO, my expertise is built on Financial Intelligence which enables me to help a CEO get a better understanding of their financials and how to interpret them. Even though a company’s financial situation is my starting point, my work is not just about profitability and cash flow.
I come alongside business owners as a partner to focus on the business as a whole. While understanding the sensitivity associated with a client’s money, I care about and speak to issues beyond those that are financial. Having built my own $20 million company, and being a CEO with a partner, I can relate to issues clients face across the board and share insight into overcoming the challenges they encounter. My goal is always to build a relationship on a foundation of trust so that CEOs feel comfortable opening up about what they do or don’t understand about their financials or when they need a sounding board about any area of business.
I’d welcome the opportunity to help you establish a financial structure that encompasses the knowledge, data, and tools that will meet the unique needs of your business and help you develop the Financial Intelligence to keep you moving forward with confidence. Contact me for a complimentary consultation about your specific situation.