How the Four Pillars of Financial Success Bring Peace

Pillars of peace

As a business leader, do you ever get stressed out over money? If so, you are not alone.

In previous posts, I discussed the four pillars of financial success. In this post, I want to make it more personal – to show you how knowing and practicing these pillars can reduce your stress as a leader. Let’s review the pillars and consider how they help you manage stress.

These pillars are:

1. Understanding: Knowing the basics about typical financial inputs and what the data reveals.

What it is: You need to understand basic financial inputs such as revenue (income generated from your sales), expenses (costs to run the business), profit (what is left after expenses), and cash flow (the movement of money in and out of your business.

How it brings peace: many business owners fly by the seat of their pants and don’t really know whether they are making money. Understanding what your expenses truly are will keep you from spending money you don’t have, and could keep you from incurring debt to keep things afloat.

2. Forecasting: predicting expected results and cash flow.

What it is: Forecasting is a core process to predict your company’s results and financial performance. It’s a view based on historical data, current market trends, and expected future events. It provides insights to make informed decisions.

How it brings peace: when you understand your company’s performance trends, you can plan better for slow and bumpy periods. You can help your team work together in the leaner times and celebrate in the more fruitful seasons. You won’t be going into each new week blind.

3 Analyzing: using a weekly dashboard to determine where you stand.

What it is: A weekly report provides a more immediate view of your business’s financial health, enabling quick adjustments, centralizing critical financial data, and offering a snapshot of performance and trends.

How it brings peace: Having access to your up-to-date numbers will help you decide whether you can afford that new piece of equipment right now, or must save up for a while. You’ll see if you can make payroll – a definite source of stress if you cannot.

4. Reporting and Reviewing: producing and reviewing monthly CFO reports to stay aligned with your mission and course correct as necessary.

What it is: Financial reporting is critical for businesses of all sizes, providing key insights into financial performance, health, and the decision-making process. Financial transparency is the key to operating a business with integrity.

How it brings peace: It’s important to know if the business is performing and progressing at the correct pace. Are the main financial numbers on track and pointing in the right direction? Knowing where you stand helps you determine if you are indeed on the mission of the business (or your own personal mission). You can sleep better at night knowing your day-to-day financial decisions coincide with those priorities.

I highly encourage you to have practices that align with these pillars. Your stress level doesn’t have to be high over elements of the business you don’t know or understand. I can help. Contact me for a conversation!

Keep Your Business Healthy: The Four Pillars of Sound Financial Practices

Four Pillars

There are 33.5 million small to mid-sized businesses in America with $12 trillion market value. But the failure rate of all businesses is incredibly high. 22% of business startups fail in the first year, and 50% of new businesses fail within the first five years – and 70% fail within ten years.* 

Operational savvy doesn’t always come easy, and a business owner sometimes, out of necessity, has to put on hats they aren’t equipped.  I often hear “But I’m not an accountant!” and I understand.  Still, if you are going to own a business, you have to take responsibility for the financial aspects of your business as well as other operations and product/service development and sales.  You just have to choose what direction to go to set yourself up for success – whether that means handling the financial practices yourself, hiring a fractional CFO, or hiring a financial specialist as an employee.

Whether you decide to have a separate CFO or decide to wear the hat yourself for a while, the first crucial step is to grasp the foundational principles of financial management.  I break this down into a 4-pillar process to take small businesses to the next level – helping business owners see obstacles coming and develop disciplines.

These pillars are:

1. Understanding: Knowing the basics about typical financial inputs and what the data reveals.

The fundamental inputs for most businesses include:

  • Revenue: The income generated from your products or services
  • Expenses: all costs involved in running your business
  • Profit: what is left after expenses are deducted from revenue – a healthy profit is your ultimate goal
  • Cash flow: the movement of money in and out of your business, determining your operational flexibility and financial stability. 

2. Forecasting and Budgeting: predicting expected results and cash flow and creating a budget.

Forecasting is a core process to predict your company’s results and financial performance. While it’s always inexact, it is a view of your company based on historical data, current market trends, and expected future events. It’s a critical component of strategic planning, providing the insights needed to make informed decisions.

Budgeting is the process of creating a financial plan for your business. It translates the insights gained from forecasting into detailed action plans, allocating resources to achieve strategic goals.

3. Analyzing: using a weekly dashboard to determine where you stand.

Weekly reporting provides an immediate view of your business’s financial health, enabling quick adjustments to operations and strategy. A weekly dashboard centralizes critical financial data, offering a snapshot of performance and trends at a glance.

Components of a Weekly Dashboard:

  • Cash and Inventory Position: This includes the current cash balance and any significant changes from the previous week (i.e. from costs) as well as your current inventory status, including any critical shortages or overstocks
  • Accounts Receivable: Overview of outstanding invoices, highlighting any past-due accounts
  • Accounts Payable: Summary of upcoming and overdue payments
  • Sales Figures: Weekly sales totals compared to projections and historical data.

4. Reporting and Reviewing: producing and going over monthly CFO reports to stay aligned with your mission.

Financial reporting is critical for businesses of all sizes, providing key insights into financial performance, health, and the decision-making process. Financial transparency is the key to operating a business with integrity.  Monthly CFO reports form the basis of communication with stakeholders, including investors, creditors, and regulatory bodies.

The key components of a monthly CFO report circle us back around to item 1.

  • Income Statement: Shows revenue, expenses, and profit over a specific period, highlighting the company’s operational efficiency
  • Balance Sheet: Provides a snapshot of the company’s assets, liabilities, and equity at a specific point in time, indicating financial stability
  • Cash Flow Statement: Details the inflows and outflows of cash, offering insights into the company’s liquidity and ability to generate cash.

Additional Analysis reports such as forecast-to-actual, historical-to-actual, KPI’s, asset and cash flow efficiency, and Continual Improvement reports can be very helpful for wise leadership decision-making.

There’s a lot more to running a business than creating a product or service and selling it. Be sure you handle your business financial operations with integrity, consistency, and open-mindedness.

I’m here to help! Contact me for a conversation about where you currently stand and how, together, we can strengthen your business using the four pillars.

* Statistics per: U.S. Small Business Administration (SBA) and the U.S. Bureau of Labor Statistics

How to Keep the End of a Quarter from Feeling Like the End of Your Business

Many business owners think their business is the only business with unpredictable income and cash flow. This makes me grin. Revenue for most businesses is never steady or easy to plan. If you are one of the fortunate ones with predictable revenue, it certainly makes things easier, but you are in the minority.

At the time of this writing, two of my clients had fallen short of quarterly goals. One missed by quite a bit. Their planned net income was now an actual loss. They missed their revenue target by 40%. Expenses were slightly higher due to some one-time expenditures. They had a hoped-for pipeline client deal that didn’t close (and as of this writing, it still hasn’t.) This happens – you think you have a deal nearly done and at the last minute it doesn’t close. Your whole quarter is now toast and you have brackets on your bottom line. They were facing a quarterly result that was much different than they’d hoped for.

Every 12 weeks or so, your business enters a new quarter. We often call them “Q1” “Q2” etc. and there’s a good chance that when you are reading this, you may be getting close to the end of a quarter, or far enough into a new one that you can take some time to reflect on the one before. While I hope your review is more positive than the scenario above, every business should ask themselves these questions every quarter:

How did our business do? Consider more than just the bottom line with this question. How is your culture? Is your staff productive and happy? Is your business still operating according to your core values? These all contribute to the financial results.

Did we hit our target numbers for the quarter?
Did we meet or exceed our targets? If so, how are we going to celebrate? What helped our success? If we didn’t meet our targets, why not? What hindered us? What can we do better next quarter? Are our targets realistic?

How healthy is our cash flow plan? If we have disappointing sales or news next quarter, do we have a strong foundation in place to make payroll and other expenses?

Is our pipeline strong? Are we relying too much on one promising client to close or for a big sale to happen? Do we have other streams of income, a wide bandwidth of customers, and efficient processes to help us weather disappointments?

Solid business growth is dependent on a firm foundation that doesn’t completely collapse when a promised sale or promising new client falls through. It depends on daily, weekly, and monthly practices and processes that contribute to informed leadership decisions. An honest quarterly review will help you stay on track and course-correct as needed before an unexpected event upends your business. And it will prepare you to be in an even better position to celebrate should sales and client development be in your favor.

I can help you have an efficient and healthy quarterly review. Contact me for more information!

What Does a Fractional CFO Do?

Fractional CFO

I had a conversation the other day with a small group of venture capitalists and seed fund investors. I love talking with these types of people – they are so passionate and have super creative business ideas. When I shared my Fractional CFO services framework and approach to helping smaller growing companies, I also was able to answer the question

What does a fractional CFO do?

We are a guide who provides strategic financial guidance and expertise to businesses on a part-time contractual basis, helping businesses manage cash flow, plan growth strategies, and make informed decisions without the cost of a full-time executive. This role is especially beneficial for startups and SMBs needing flexible, high-level financial advice tailored to their specific challenges and opportunities.

While every business is slightly different from the next and may require a slightly different approach, most businesses need the following data every month in addition to keeping up with the bookkeeping processes that lead to a strong monthly close:

Three basic financial statements: (income statement, balance sheet, statement of cash flow)
Monthly 12-month forecast
Weekly scorecard comparing weekly KPIs to expectations
13-week cash flow forecast
Monthly CFO reports
A regular, intentional meeting to discuss the results.

I generally start conversations with potential clients by ensuring they understand the three basic financial statements and why these are so important. These are:

Income statement.  Also known as the P&L (Profit & Loss) statement, shows revenue, expenses, and net profit over a certain period. Net income is zeroed out annually and moved to what is called “retained earnings” (which is a balance sheet account and means income that has stayed in the business since inception).  At the beginning of the new year, you start pushing the ball up the hill again.

Balance sheet. This shows your assets, liabilities, and net worth at a snapshot in time. It shows what you own and what you owe on a particular date. The assets and liabilities are listed in the ‘ease of liquidity’ order. Liquidity refers to how quickly you can turn those assets into cash.

Cash flow statement. This shows sources and uses of cash categorized by operating activities, investing activities, and financing activities. (In other words, cash flow from operations, from investing, and financing activities.)

Then we look at the other elements:

The monthly forecast/weekly scorecards generally take a few iterations to become useful for a company. We concentrate on the monthly, first. Once it is solid, then we can more easily parse down the numbers to a weekly forecast and develop the weekly scorecard.

Weekly Scorecard comparing KPIs: Every company’s KPIs are slightly different, and we may need to track a variety of specific things depending on quarterly goals. Business owners usually have questions like:
What sort of data should we be tracking? How many KPIs should we track? Generally, you should track revenue, drivers of revenue, gross margin, labor utilization, cost efficiency, asset velocity, and cash and cash flow – actual compared to expected results for the week.

I track all this in Excel. There are some awesome tools out there for dashboards that are fully automated and contain tons of great information and graphics. I love the look but I find the best scorecards are prepared manually and contain surprisingly little data. This allows everyone to focus on the highest-value data points. High-tech is great, but we still need high-touch.

The 13-week cash flow forecast contains cash receipts and cash disbursements by week for three months.   In a turnaround, the 13WCFF is updated daily, but for a typical business, I like to update it weekly so it’s always a rolling 3-month look forward.

CFO Reports (or Monthly Reporting Package, or Monthly Operating Report) are produced monthly. They vary by business but generally contain the three basic financial statements, the 12-month forecasted P&L and Balance Sheet, the current month’s P&L compared to forecast, trend graphs for sales, margin, asset velocity measures, and significant goal tracking, top 5 company goals and status, current 13-WCFF, top customers for the month and year to date.

Regardless of the format, this data should be prepared and discussed regularly. This is where an intentional meeting between CFO and business leaders comes in. Weekly is best but monthly can work. This way you’ll see if you are hitting the numbers or not, and helps you course-correct more easily if you aren’t. It also helps to avoid big surprises later in the year. It allows the CFO to become a vital ally – not just presenting numbers, but helping you understand “why” the numbers are a certain way. A discerning CFO will also have good suggestions for more success in reaching goals.

If your business doesn’t have a CFO, you should seriously consider one. If I can help your company with its fractional CFO needs, contact me!

If It Ain’t Broke …

Break glass

We’ve all heard the old saying, “If it ain’t broke, don’t fix it.”

There’s a lot of wisdom in that. When you’ve implemented an efficient plan (i.e. a quick month-end close, financial processes that keep good data in front of you, etc.) it’s a good idea not to mess with it – to a point. But it’s never good to permanently rest in a routine that isn’t reviewed regularly. It’s then that we fall into a rut, otherwise known as a casket without a top.

And forgive the pun, but if you are not growing, you are dying. Growing requires the willingness to change.

I am working with several new clients who are making changes in their business. Change isn’t easy, but it is necessary to improve. It’s been good to see some of the positive outcomes from this process.

As I mentioned in a previous post, assessing your business regularly and recognizing the need to change is step one. Even if things are going well, the waterline is rising, and things can always be better. We need to continuously deal with any leaks, including new ones that may spring up.

So how do we do this?

I suggest a shift of mindset, based on a fabulous book I read many years ago: If it Ain’t Broke…Break It!: And Other Unconventional Wisdom for a Changing Business World by Robert F. Kriegel and Louis Palter. Their advice shared in the early ’90s is timeless. We must have a mindset toward embracing change, innovation, and continuous improvement as keys to success in both personal and professional life.

Here are some key thoughts from the book, along with a question you can ask yourself in assessing how your business and team are doing when it comes to each theme:

1. Embrace Change: it’s important to be open to change rather than cling to established norms or practices. Change can lead to improvement and growth.

Question: What change in process did we recently implement or consider as a way to improve our productivity?

2. Innovation is Key: Innovation is significant in driving progress and success. When you encourage a culture of innovation, you’ll see breakthroughs and competitive advantages.

Question: Does my team feel comfortable bringing me new ideas?

3. Challenge Conventions: Rather than accept that “This is how it’s always been done,” encourage questioning and challenge conventional wisdom.

Question: What is something we have been doing for years that we should consider changing or eliminating from our processes or policies?

4. Risk-Taking: calculated risks are essential for growth and advancement. Rather than fearing failure, consider it a valuable learning experience.

Question: When did we take a risk in the last 3-12 months? If we haven’t been willing to take a calculated risk, why are we holding back?

5. Continuous Improvement: Individuals and organizations should always seek ways to evolve and enhance their processes and products.

Question: What are three key areas where we are working on improvements in the company? (i.e. personnel, environment, culture)

6. Adaptability: In today’s rapidly changing world, being adaptable is crucial. During the pandemic, we saw a critical need to pivot and adjust to new circumstances and challenges.

Question: While we are not in an active pandemic now, what other concerns threaten our success? How do we need to re-position ourselves to stay relevant?

7. Creativity and Experimentation: encouraging these can lead to new ideas and solutions not considered before.

Question: What is a problem we are experiencing that could use a creative solution? What ideas can we consider for a while without shooting them down immediately?

8. Leadership Role: leaders are the critical component in fostering a culture of innovation and change. They should lead by example, supporting initiatives that promote growth and innovation.

Question: How strong is our leadership team? Do we inspire growth and innovation, or are we stuck in our ways? What would our employees say if guaranteed anonymity?

Some of these questions may be uncomfortable, but I assure you they are important. Culture affects the bottom line. An unhappy, stressed out, unproductive team creates leaks that sink your business success and satisfaction. A team that has the freedom to bring up fresh ideas, evaluate processes objectively, and follow values modeled by their leaders will help create an organization that makes money and contributes positively to society.

Which would you rather have?

How Do You Run a Business Without Good Data? 5 Ways to Change That


As is my custom, I spent New Year’s weekend honing my 2024 plan and updating bookkeeping for my business as well as for several of my clients.

Yes, I was playing the role of bookkeeper for Verbeck Associates. When you have to do the work yourself, you realize again the value of a great bookkeeper. It’s great to have someone whose job it is to get all transactions in on a timely basis and ensure that accounts are all reconciled. I wish I could say I was always THAT someone for my own business! But as they say about the shoemaker’s son …

The further away from the transaction date, the more complicated it is to determine the essence of the transaction. In one case, I had to bring ten (yes 10!) months of a new client’s QuickBooks up to date. Their bookkeeper had completely dropped the ball. It was brutal, but we tenaciously got four bank accounts reconciled to 12/31.

After that, I sat with the business owner, asking “How did you run your business without good data?”

While it may seem surprising for someone to run a business without looking at numbers, it’s not all that unusual. And while some business owners LOOK at the numbers, they don’t study them in a way to benefit from the information.

Here are some reasons why owners don’t look carefully at the numbers.

The books and records are not in good shape.

This tends to happen when a finance team player (i.e. bookkeeper) isn’t kept accountable for entering transactions in a timely way and providing a quick month-end close. They may be overwhelmed with the minutia, or be in over their head. But all financial staff should be accountable to someone, even if the supervisor isn’t finance savvy. They can still ask the right questions to make sure monthly tasks are current.

They assume things.

Business owners have told me, “I’ve been in business for ten years. I know how we are doing.” They assume their books are in good shape. (Most of the time they aren’t.)

They are afraid to look stupid.

Many business owners launched businesses due to their passion and skills in a particular area. They may be great carpenters, restauranteurs, therapists or marketers so they hung a shingle and started a company or practice. That may not mean that they have the financial and administrative skillset to excel in the operational side of running a business. Deep down, they may know that they are not good at math, or an accountant. There’s no shame in that – unless they refuse to acknowledge that they need some help.

They don’t like the “report card” feel.

Many times, when owners finally look at numbers, it’s been prompted by something unpleasant. It could be tax time and they are meeting with their CPA. They may be collaborating with a lender and have to face hard facts. Bookkeeping, when done correctly, doesn’t lie. If the numbers don’t add up, they don’t. I know someone who was gently told that they were making under $5 an hour once their time was accounted for. Facing numbers and facts like this is scary. No one likes to feel like they are failing, especially when they are putting a lot of time and energy (and even their own money) into a venture. 

So what’s the answer? Here are five things you can do right away no matter what time of year it is:

  1. Face facts. The first step to change is knowing. Decide that starting NOW, you are going to make a more intentional effort to keep up with the financial overview of your company.
  2. Hold your financial employees accountable. You can do this in a way that feels collaborative. Set up a monthly or even more frequent meeting. Tell them you need their help in making more informed business decisions and you’ll need transactions entered and month-end figures in a timely way. Set a meeting early in the new month to review last month’s numbers.
  3. Educate yourself. I offer a variety of resources (and am working on more) that can help you “be your own CFO.” You don’t have to become a CPA to learn to understand basic information like financial statements, cash flow, cost of sales elements, and other standard reports.
  4. Think beyond the numbers. Once you know the numbers, figure out why they may feel out of alignment with your goals. I always look at a business’s performance from a numerical point of view, which is objective. But there’s also a good argument for looking more closely at employee satisfaction and customer service. These are harder to tangibly measure, but there are ways to see if your company is hitting the mark more often than not. Remember that dissatisfied employees and/or customers cause profit leaks.
  5. Consider hiring outside help. Whether it’s an additional employee or a contracted company that provides CFO and/or bookkeeping services (like mine) you may find that your numbers improve because you have people with a gift for that side of business playing that role.

    If I can help, contact me. At the very least, start looking at your numbers more closely, more often.

Unlocking Business Success with Simplified KPIs

In the vast sea of business complexities, the need for a reliable compass cannot be overstated. Enter Key Performance Indicators (KPIs) – the navigational tools that help business owners chart their course and make informed decisions. In this blog post, we’ll explore the art of simplifying KPIs and their pivotal role in guiding your business journey.

Embracing Simplicity in a Complex World

Complexity tends to sneak in as time marches on. And being a business owner is difficult. We often find ourselves facing challenging moments, as a contact of mine did when his sales pitches to a large company ended in rejection. This, however, is normal and part of the journey. Most sales calls receive the dreaded “no,” a harsh reality of the sales world. In the face of adversity, we must not lose heart; instead, we should expect challenges and remain steadfast in our vision.

Our North Star in this tumultuous sea is a clear and unwavering vision. Every business owner must ask themselves: “Where are we heading, and what is our vision?” A clear vision will serve as a guiding light through turbulent waters and should influence the type of information you track and reporting that you do.

Simplicity in Reporting and KPIs

Just as life’s complexities grow with age, so do the complexities in business operations and reporting. If you’ve been in business for a while, you’ve likely seen your processes and reports become increasingly intricate and complicated. It’s just the way it is. With more time, things get more complex.

The key, however, is to keep things simple. The allure of intricate dashboards with tons of data points and graphs is enticing, but often it becomes challenging to see what truly matters. To cut through the noise, it’s essential to maintain a straightforward approach.

Organize and Focus with KPIs

One effective way to streamline your business’s focus is by categorizing KPIs on your weekly Company Scorecard with categories such as marketing, sales, operations, and finance, and assign teams to brainstorm and track three to five key metrics in each category. This approach narrows the focus, ensuring that each KPI contributes to the overall value of your business. And each KPI has a person (or you) accountable for it.

The Power of the Weekly Review

Weekly reviews are the engine that keeps your business on course. This routine check-in allows for the timely identification of issues and the resolution of bottlenecks. It’s the glue that aligns everyone with the same KPIs and growth targets, fostering unity and clarity within the team.

Measuring Progress with KPIs

When it comes to KPIs, consider the following areas: Growth, Fulfillment, and Innovation. To measure your business’s performance, keep an eye on a range of metrics tied to these areas, such as:

  • Growth: Revenue growth, monthly recurring revenue, pipeline, customer acquisition cost, gross margin, net profit margin, monthly active users, activation rate
  • Fulfillment: Order fulfillment time, inventory turnover, on-time delivery rate, total support tickets, average response time, number of clients onboarded, renewal rate, net promoter score
  • Innovation: R&D ratio, new product launches, time to market for new products, milestone achievement, churn.

Additionally, analyze other vital KPIs, including unique visitors, cost per acquisition, return on ad spend, average customer value, new customers, sales, sales leads, qualification calls, close rate, booked revenue, average deal size, and pipeline.

A Deeper Dive into KPIs

If you’re looking to expand your KPI knowledge, consider delving into the following key metrics:

  • Days of inventory on hand is found by dividing the average Inventory by the ratio of cost of goods sold to the number of days in the period. It indicates the average number of days it takes for a company to sell its entire inventory, providing insights into inventory management efficiency.
  • Gross profit margin: Determined by subtracting cost of sales from total sales, then dividing the result by total sales.
  • Working capital ratio: Computed by dividing current assets by current liabilities.
  • Account payable turnover: Found by dividing net credit purchases by the average accounts payable. It measures how many times, on average, a company pays its accounts payable during a specific period, providing insights into the efficiency of the company’s payment process and its relationship with suppliers.
  • Days Sales Outstanding (DSO): found by multiplying the ratio of average accounts receivable to average daily credit sales by the number of days in the period. It represents the average number of days it takes for a company to collect payment after a sale has been made on credit.

KPIs are the lighthouse that guides your business towards success. Keep your compass simple, focus on your vision, and harness the power of weekly reviews to ensure everyone is on the same page. With the right KPIs in your arsenal, you’ll navigate the intricate waters of the business world with confidence and clarity.

Contact me for help establishing your KPIs and creating a helpful dashboard!

Four Things to Regularly Assess in Your Business


One of the skills an experienced big mountain backcountry skier practices is testing the snowpack for avalanche risk. “I think it looks good,” won’t cut it. We have to pull out the shovel and test the pack to ensure we can venture down in a safe way. Otherwise, we risk life-threatening conditions and danger. “Where’d he go?”

It’s similar when it comes to your business. You can glide along thinking “I think it looks good,” but without regular testing and evaluating of the conditions, you can end up in an avalanche of trouble. So I encourage my clients to take the time to regularly assess and evaluate their business. Natural times for this include quarter-end and year-end, but you can even do monthly evaluations to some degree.

At regular intervals, I like to pause, reflect, and delve into data to evaluate the progress of the businesses I serve. I like to look at goals that were set at the beginning of the year (such as sales growth and EBITDA margin growth) and the list of initiatives and projects we’d hoped to have well underway. We face the facts and compare our expectations with reality.

It’s easy to fall into the trap of self-assurance, saying, “I think it looks good! This is a great year so far! We’ve been busier than ever.” But we also need to honestly assess four crucial elements to support or adapt our hopes that we are indeed, in good shape.

Here are some questions to ask yourself when you assess your business.

Your Team

Just as they say in sports, “You are only as strong as your weakest player,” the same applies to business. Here are some questions we ask regularly:

  • Are there any individuals on the team holding our business back?
  • Are we as leaders unintentionally becoming a hindrance?
  • Which team members (including those in leadership) need coaching to improve their performance?
  • Are there any team members (including those in leadership) that need to be promoted, or conversely, helped into another career?
  • Do all team members possess the necessary skills, resources, and attitudes to help us achieve victory in our industry?

Your Strategies

  • Has the competitive landscape shifted, demanding adjustments and recalibrations on our part?
  • What strategies have worked for us?
  • Which strategies should be changed (or even eliminated?)

Your Financials

It is astonishing how often struggling companies and overwhelmed owners have financials that are in disarray. Transactions are delayed, balance sheet accounts lack accuracy, and cost-of-sales accounts fluctuate without any apparent reason. Inaccurate data produces unreliable results. These questions will help:

  • Are we consistently following a monthly close procedure?
  • Is our staff able to keep our transactions and records current?
  • Are our receivable days increasing?
  • Are inventory turns slowing down?
  • Did we gain or lose significant customers?
  • Are our cost of goods sold numbers slipping?
  • Is the average selling price (ASP) increasing?
  • Are we able to make decisions on accurate and up-to-date numbers?

By measuring these primary financial drivers, we gain valuable insights into our business’s performance.

Your Projections

  • Are we on track with our projections? If not, what do we need to change? (It might be uncomfortable to do this, but you are better off dealing with accurate results for goals set.)
  • What changes would help our current situation align better with our goals?

Embrace these moments of reflection, evaluation, and adjustment. By examining our team, our strategies, our financials, and our projections, we can set ourselves up for a stronger future.

At Verbeck Associates, we can help with these evaluations. For example, we produce CFO reports for our clients, providing them with a comprehensive financial story that aids in decision-making. Contact me if I can help you in this evaluation process!

Great, Good, So-So, or Bad Year?

Great good so-so bad

Great. Good. So-So. Bad. It’s been quite a year for all of us. As I look back on this year and think about my clients’ results – determining wins and losses with hard, comparable data on sales, margins, efficiency, and profitability – it is sometimes still hard to quantify a year as a great year, good year, so-so year, or bad year. Or perhaps a combination of all of these. Let’s look at a fictitious, but very possible scenario, for a business experiencing all four.

Great Year – We gained some new, big customers!

As you wrap up your 2023 planning, make sure you take the time to reflect to recognize and celebrate your wins. Did you land a major client? Solidify relationships with current clients? I talked about this before in my year-end planning post, but recognition and celebration of wins is one of the things high performers tend to forget to do. It’s so easy for us to magnify our failures, but not our wins.

Good Year – We kept steady customers.

Look at your historical data. What is your profitability by customer, segment, and revenue stream? You may find that while you have some significant accounts, you might also enjoy smaller but steady sales that feed profit every month. This is worth celebrating and cultivating too. You never know who your smaller accounts know, and if you treat them well and they speak highly of you, there could be some significant downstream sales coming your way.

So-So Year – We tried some new tools and got distracted.

Maybe this year you tried some different technology, and it wasn’t always a smooth ride. New technology like DataRails, Asana,, Loom,, and older technology like NetSuite, 3PL’s, LEAN, remote work and outsourcing can go long way to making your business more efficient. But you can also experience bleeding edge, always looking for the “latest and greatest,” and getting caught up in “shiny object syndrome.” I have done this several times with technology, never maximizing the expected improvements. The man who chases two rabbits, catches none. Don’t overthink (and overspend) on improvement tools and experience paralysis through analysis.  Look at the options, decide, and move forward – with efficient growth always the goal. Ask yourself “Will this tool help us improve the process to get to timely and excellent deliverables? Or will it take more time and energy from our staff and get us behind – and end up in the same place we started?”

Bad Year – We made mistakes. We lost some money. We had to let people go.

No business has a perfect year. Some have terrible years. Maybe you lost (or had to lay off) key personnel. Maybe you made a major mistake on a client deliverable and had to redo the work for free. Maybe you overspent in areas that you should have kept a better eye on.

EVERY business makes mistakes. The key is to learn from them, change processes or get help/training to avoid the same mistake again, and most importantly, learn to truly let go and MOVE ON. Failures can be expensive lessons but dwelling on them will only drain your mind and pockets even more. Put the past where it belongs – in the past.

Questions to ask at the end of the year:

As you try to evaluate whether your year was great, good, so-so, or bad, here are some questions to ask. These will also help you prepare for the future.

What technology served you well? Do you need to make a change? Add features?

What does your team and personnel plan look like?  What are their metrics? How are you measuring their contributions to workload, culture, and profits?

What is the work culture like? Are people enthused about working here?

Is the team improving its capabilities regularly? Are team members always learning and improving?

What business segments are most profitable? Which are not?

What is the volume for your top 10 customers? Do we expect the same or better next year?

How could you improve the sales process and customer onboarding?

What one process could you improve to at least double efficiency? What one process could you eliminate?

How can you improve the back-end processes in accounting, payroll, accounts payable, and accounts receivable? (Ask the people who do the daily work in these areas.)

What are our top three goals for next year?

I can help!

Whether you had a great, good, so-so, or bad year, I believe Verbeck Associates can help any business be better.   I’ve seen so much as a full-time fractional CFO for the last 16 years. Many businesses wish their net income was better. They are experiencing scarcity in the supply chain, more competition for qualified team members, and rising interest rates/inflation. You are probably feeling the effects too. But you still have choices and power to fix some leaks, institute better processes (like consistently going over a Weekly Scorecard), develop strategy, pick the right team and technology, and move forward. The choice is up to you, and I’d love to help. Contact me for a free conversation and a basic evaluation of what we can do together to make the end of 2023 reflection contain more of the “Great/Good” elements than the “So-So/Bad” ones.

Fourth and Final – Finishing Strong

Football four

It’s the fourth quarter and your team has the ball on the 10-yard line. The score is tied with two minutes to go. Football is particularly exciting (or nerve-wracking) as the game winds down and the score is close. What happens in that last quarter determines who wins the game.

The fourth quarter of your business is similar, and we are cruising fast to the end of the year.  In this fourth-and-final quarter, there are four things you should do to help your business win, stay strong, and enjoy success.

Get Your Team Energized to Finish the Year Strong and Be Ready for 2023

With most of my clients, I am wrapping up the quarterly meetings.  In these meetings, we are looking at the numbers to ensure that everyone is on the same page regarding key goals and approaches.  I generally find that the team is around 70% aligned. We use the opportunity to increase that percentage by having an in-depth discussion of the historical results and looking at the rest of this year and going into 2023 to align the teams’ vision and long-term strategies. Knowing exactly where you are can give you motivation and energy for what needs to happen next.

Ensure a Solid Q3 Close

If you’ve established effective processes and routines, your accounting staff should be keeping up with the necessary tasks to ensure you have accurate numbers and information for future decisions. If not, focus on getting these procedures polished (with assigned task checklists ) and getting your staff on board completing them efficiently and effectively EVERY month.

Get Your Short-term Targets in Focus

What are you hoping to see happen in your business during the fourth quarter? Write down these short-term goals and initiatives, narrowing them to be specific, measurable, and fitting for your team.

Start the Budget Process

2023 will be here soon so you’ll need to have your budget in place to ensure an effective transition. It may be a simple matter of copying and tweaking this year’s budget. Or, you may have to revamp if some areas of your growth or scaling did not match your expectations. What are the big initiatives and capital needs next year? Develop your planned organizational chart and get input from your staff for their needs to support their roles for the upcoming year. Start formulating your sales targets now so you can solidify them in November. Consider cost-cutting measures or redirection of funds to more effective endeavors such as product development or marketing for next year.

Bonus Task

I find it interesting the statistic that 98% of business owners don’t know how much their business is worth.  Their business is their most valuable asset, yet most have no idea of its value until they decide it’s time to sell.  I know a couple of owners who recently transitioned from their business and the offers they received were substantially less than they anticipated. In addition, knowing the current value of your business makes it easier to intentionally increase it over time with well-informed decisions.

I suggest all business owners do a business valuation every few years. If you haven’t done this in the last couple of years, arrange to do one this year. Our valuation process is inexpensive and efficient, and you’ll be amazed at how the information helps you as you head into 2023 and beyond.