From reactive to proactive to strategic
Like many other entrepreneurs he was accumulating debt, not paying himself as CEO and felt the heavy emotional burden that goes with it.
As a CFO I believe that debt has only one one place in the business; used strategically to support real growth. But the lack of visibility into his long-term finances was making Ben reluctant to invest…
Ben: “When we started working with Admira we were only looking into the past, counting the money after the fact. But truly the need for a CFO came when we felt ready for the next stage of our growth. So we needed to be able to forecast, anticipate, plan and make decisions based on the numbers.”
Ben: “Cashflow is a bit like oxygen. If you run out of it you’re dead. And so I, like many other business owners I know, am constantly worried about money. Do we have enough? Can we pay our people?
With Admira knowing confidently what the money looks like brings me emotional freedom and peace of mind. In turn, I can dedicate my mind and my passion to work on all the things I can improve in the business.”
We started with cash flow management
The business was now becoming profitable and we made sure it was rewarding its owner so that Ben could have a sense of achievement and the motivation to keep going.
The result was to be able to answer 2 questions for him:
➤ At what point do I start cutting costs?
➤ At what point do I stop investing?
But because he needed a clear view of his run rate (for example: is the business operational for the next 6 months?), we created specific scenarios for him. Color-coded scenarios for best case, medium case, worst case that showed Ben the exact amount of money for each situation
Cash was still his main problem
We decided therefore to do things differently for this start-up:
The next step was addressing the fear of investment.
Ben: “In the past because of Covid and the recession, I was reluctant to invest the money we had in reserves because I thought “we might need this nest egg”.
With Admira’s help I felt more comfortable saying “let’s use some of this money to grow the business”. As a result we’ve hired 7 people in the last 2 months. While the tech sector in the US is facing massive layoffs, we’re hiring, taking advantage of a labor market that’s really turned.”
We set up goals and defined a long term vision, but Ben was not comfortable spending the money without visibility on projected ROI. With no KPIs in place he wasn't sure how to track it. So we created a system…
🔼 We set out goals and sought out industry benchmarks as initial metrics
🔼 We measured upward / downward trends versus the benchmarks
🔼 This gave us a better understanding of how to set accurate KPIs
We now have a list of things to invest in and a CEO that has peace of mind he’s making the right choices.
Getting comfortable to spend
For Ben, much like for any other business owner there are no guaranteed results. But knowing your numbers will give you great confidence.
Ultimately, we wanted to give him options. For Ben the best way to do so was through scenarios. We moved away from reading raw data to understanding the story behind the numbers.
Cash management, risk modeling or the recurring revenue model are not new concepts. But what we care about at KARE CFO is about how the models fit the business culture and how the owner can consume that information.
Because an overwhelmed entrepreneur takes no action.
The value of a CFO is far beyond financials
The secret to our work together…
I know I work best with business owners who are committed to the work and want to take control of their numbers.
That’s why I love my work with Ben; he wants maximum visibility and he loves the freedom of having options. There’s no one way that fits all, but he certainly puts in the work so that we can come up with the best solutions for his business.
Ben: “The key to our engagement is always collaboration. I like that Admira can challenge me and I can challenge her back. I think it’s important for people to understand that having a CFO is not just blindly following advice.”
Ben: “What’s truly special is that Admira also has a good bedside manner. It’s almost like a doctor that can be really smart medically and academically, but when the patient is super scared the lingo is useless… They need to manage the patient’s anxiety and concerns.
That’s what Admira is like. She’s also sweet and thoughtful and I know she cares about me and the business a lot.”
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