Friday, August 7, 2020

Cash is King – Practical tips to Improve Cash Flow

Cash Flow Management is a critical strategy for small business’ growth and survival. In these uncertain times, it is even more important. 

Join us with Soledad Tanner of STC Financial & Business Consulting as we identify proven tactics to help your business achieve goals in a controlled and managed plan
. • Manage Accounts Receivable, Predicting Accounts Payable and Inventory
 • Learn Concrete examples to improve your Cash Flow – 
• Strengthen your leverage with banks and suppliers 

Please references this webinar for a free 15-minute consultation! Schedule your free session! Contact or call 346-227-2895.

HOUSTON USHCC / Chambers in Houston and Georgia

Soledad Tanner, Founder & CEO- STC Consulting, representing Frances Castaneda Dyess - President of @houstoneastendchamber shares valuable insights to help small businesses through the challenges caused by COVID-19.

 What are the challenges and needs of entrepreneurs and what tools and resources are available at the Chamber? #supportlatinobiz, #smallbizBigStory, United States Hispanic Chamber of Commerce (USHCC), Houston East End Chamber of Commerce and Latin American Chamber of Commerce of Georgia. 

STC Consulting a Business & Financial Management Consulting firm that helps improve the profit & productivity of businesses. Solutions are CFO on demand, Financial speaking & workshops for Corporations, Financial Management, Business Consulting, Financial Modeling, Financial Training, and Bookkeeping Services for Business Owners and Startups.

Watching the money: Tips to thrive – Covid19 edition

Join Soledad Tanner, Founder & CEO of STC Consulting, a Business & Financial Management Consulting firm navigate the choppy financial waters of COVID19.

The webinar is targeted to small businesses and professionals interested in maximizing their PROFIT & PRODUCTIVITY. You will learn how to manage your cashflow, organize your business to be more efficient, and leverage your revenue to grow within the COVID-19 environment. 

Please references this webinar for a free 15-minute consultation! Schedule your free session! Contact or call 346-227-2895.

Food Industry Recovery Program - Baker Ripley & Hope Clinic/STC Consulting

Soledad Tanner – Founder & CEO - STC Consulting will be a financial expert guest speaker at Baker Ripley and HOPE Clinic – Food industry recovery program for small business owners. This is an online series mixed with one-on-one coaching and presented in Spanish. This program is aimed at owners or partners of small businesses related to the food industry. 

The objective of the "Food Industry Recovery Program" is to rebuild businesses that have been impacted by COVID-19. They will learn about sustainable financial business models in the food industry, the importance of building out a strategic plan for recovery, and improve focus and business mindset in order to pivot their business. 

STC Consulting is a Business & Financial Management Consulting firm that helps improve the profit & productivity of businesses. Services are CFO on demand for Corporations, Financial Management, Business Consulting and Financial Training for Business Owners and Startup Boost for Startups

Friday, July 31, 2020

CFOs: FP&A and accounting must speak the same language

Photo by CoWomen on Unsplash

Author:  Robert Freedman@RobertFreedman


Poor coordination between backward-looking and forward-looking finance functions eats up time and resources better spent elsewhere.
If accounting and FP&A teams don't work in concert, they will waste valuable time each month trying to reconcile numbers, finance leaders said in a CFO Live virtual conference this week.

Inconsistencies between the two teams typically start with where they focus their attention, said Nayab Siddiqi, CFO and head of strategy at travel technology company REZY360.

Accounting teams, which are responsible for controls, compliance and reporting — traditionally backwards-looking functions — tend to focus on the balance sheet, while financial planning and analysis (FP&A) teams, which are responsible for forward-looking budgeting and forecasts, tend to focus on the P&L. FP&A teams typically account for a transaction one way — as an investment, for example — while the accounting team accounts for it as an expense.

"Once FP&A classifies something in their forecast in a certain way, and the accounting team doesn't know the nature of that transaction, they might classify that [as something different on] the balance sheet," Siddiqi said. "So, when they're comparing these, they won't find those numbers on the P&L, even though the transaction has already happened. Now, it takes a lot of time to find out where the transaction has been reported."

Process organization is the key to team communication, but, ultimately, coordination falls to the CFO, said Mirek Purpura, head of finance for Central Europe and Israel at Baxter International.

Purpura resolved a coordination problem by having the FP&A team look at the books while the accounting team was still in the process of closing them, rather than waiting until they closed.

"If an issue is spotted, it's a two-way street," Purpura said. "They can inform accounting if something happened correctly or not, and accounting can course-correct immediately. It's the role of CFO to enforce that kind of behavior between the two."

Siddiqi created a position between the two teams to ensure FP&A didn't spring any surprises on accounting after the books were closed, and vice versa.

"That person's responsibility is to keep coordination between the two functions by picking up the phone, calling them, and telling them what was going on in each of their functions," he said. "So, when reporting time comes, there are no [unanswered] questions."

Coordination is less of an issue in small organizations, because the two teams typically sit side by side and can stay in constant communication. It's more of an issue in big organizations, particularly ones operating in multiple countries, which might have hundreds of people on each team scattered across the globe, Siddiqi said.

Focus on drivers

Another way to keep teams working together is to train them to look at numbers in terms of business drivers. FP&A specialists tend to be better-equipped to do this, because translating business activity into financial terms is their job. But accounting staff can benefit from it as well.

"If they don't understand the levers moving the business, it can be difficult for them to connect these to financial transactions," Siddiqi said. "If that's not connected, anything they create won't be accurate, or close to accurate."

Purpura uses drivers to help speed his budgeting and forecasting. Previously, his FP&A team used more of a zero-based budgeting process, essentially starting the budget from scratch each cycle, but now, he uses historical numbers from accounting to create a baseline, freeing up FP&A staff to look only at drivers to determine which line items need changing.

"For something like travel and expenses, we automatically set a baseline for the teams going forward," he said. "That way, we're not focusing on the minutiae of details of things that are relatively consistent year-over-year. We've even started looking at baselining sales projections, based on historical information, especially in countries where they’re historically consistent, or based on leading indicator KPIs we can rely on. So FP&A can focus on the one-offs."

Siddiqi's FP&A team also uses drivers in their budgeting and forecasting. "Previously, we did roll-forward forecasting but now ... we look at different drivers, how they operate, and look at the different levers. How do they impact our numbers on the revenue or the cost side? And we translate them into their impact on our numbers."

For both teams, by improving coordination and collaboration on drivers, staff can focus more on higher value analytical work, and devote less time to reconciling differences in approach.

Friday, July 17, 2020

Financial Documents: What To Save And What You Can Throw Away

Written by: Kevin Payne Contributor

If you’re like many of us, the amount of paper that enters your home is hard to handle at times. From mail to receipts to documents, it’s a challenge to keep it all organized. While many businesses are moving toward paperless systems, it doesn’t feel that way when you look at the piles of financial papers in your home.

As you make life and financial decisions, there’s usually a paper trail. The same is true when you buy, sell or insure something. And after tax time every year, there’s another stack of documents to add to your files. What should you save, and what’s okay to toss in this week’s trash collection—by which we mean, what needs to be shredded and disposed of properly?

The main reason for filing away financial documents is to be able to defend your annual tax returns if needed, but there are other reasons to save certain types of paperwork. Here’s a quick guide to what to do with your financial documents: how long you need to save the important ones, how to store the documents you do retain and how to safely dispose of the rest.

How Long Should You Keep Financial Documents?

Some financial documents should be kept for the long term. Here’s a breakdown of documents to save, based on the time they should be kept.

Seven Years or Longer

When it comes to taxes, it’s best to keep any tax records for at least seven years. The IRS statute of limitations for auditing is three years. However, there are circumstances where they can go back as far as six or seven years, for example, if you underreported income by 25% or more. State statutes of limitations can vary, so check with a tax professional on the limitations in your state.

Your best bet is to hang on to your tax returns as long as possible. If you ever face a tax audit, then you’ll have all the information you need. You also should consider saving documents that verify the information on your returns for at least seven years, like W-2 and 1099 forms, receipts and payments. If you have receipts related to assets, like receipts for home remodeling projects, keep these for as long as you are the owner.
One Year

Documents that fall into this category include non-tax-related bank and credit card statements, investment statements, pay stubs and receipts for large purchases. Keep these records on hand for a year if you need them to support your current-year tax preparation or as proof of income when making a large purchase.

The Federal Trade Commission suggests holding on to your paid medical bills for a year before tossing them—unless you have an unresolved insurance dispute, in which case you would retain the medical bills until the dispute is resolved. Medical bills are confusing, and having records on hand to dispute payments or errors is wise.

Many banks and credit card issuers offer electronic statements now, so you may not need to keep paper copies on hand, which will cut down on excess clutter. If keeping other documents around longer term makes you anxious, you can opt to scan them to create electronic copies and then dispose of the original paper documents.
Less Than a Year

Some documents don’t need to take up valuable space in your home for very long. For example, don’t worry about keeping receipts unless they pertain to:

  • Products under warranty
  • Your tax returns
  • Insurance claims

You can toss most monthly bills after you pay them, or after the payments have credited to your bank statement. If you end up needing to go back to verify anything, see if you can access past bills through online account access. Many companies keep past bills and invoices available online for the past few months or longer.

Banks typically don’t mail canceled checks back to you anymore, but if yours does, most canceled checks are okay to shred once you’ve verified your bank statement is correct. Some canceled checks should be saved, though, if they are related to tax returns, like any charitable giving.

What Financial Documents Should You Keep Forever?

We’ve looked at documents that are okay to throw away after a specific time, but there are plenty of documents you should hold on to indefinitely. Important papers to save forever include:
  • Birth certificates
  • Social Security cards
  • Marriage certificates
  • Adoption papers
  • Death certificates
  • Passports
  • Wills and living wills
  • Powers of attorney
  • Legal filings
  • Military records
  • Retirement and pension plans
  • Inheritance documents
  • Beneficiary forms

For anything you’ve bought or insured, you should save the related documents for at least as long as you own them or until the warranty ends. It won’t hurt to keep them around longer, though, just to be safe. This includes titles, deeds, insurance policies, warranty documentation and more.

Health insurance policies and related documents are important to keep long term, too. So long as your health insurance is active, you should keep these records. If your coverage ended or you’ve moved to another insurance company, go ahead and toss paperwork once you’re sure you won’t need it. The same is true if you receive disability or unemployment benefits. Keep the documentation until you know you no longer need it.

If you have financial records or documents you aren’t sure you’ll need, err on the side of caution. Keep any documents until you are positive you don’t need them.

How to Store Financial Documents

You can cut down on clutter by creating a reliable system for storing your financial documents. Keeping your documents safe is equally important. When storing your documents, you’ll want a storage solution that is:
  • Easily accessible
  • Protected from theft
  • Protected from the environment/weather/damage
  • Well organized

Whether you have paper documents or electronic versions, here are options for storing your financial documents safely long term.
Paper Storage

Many people choose to keep documents stored in a filing cabinet. Use file folders to organize paperwork by subject, year or another method of your choice. Bankers boxes are another storage option, but these are more susceptible to water damage.

For your most important documents, a standard filing cabinet might not be enough. The use of a home safe may be a better option. Look for a safe that is fireproof and waterproof for maximum protection. A home safe doesn’t have to be elaborate or expensive, like something you’ve probably seen in the movies (no need for hidden wall safes behind artwork). A simple lockbox you can grab and go is perfect for storing documents in the event of a home fire or flood.

Safe deposit boxes used to be a popular method for storing valuables, including essential documents. Not all bank branches offer safe deposit boxes today, but it can be an option if you prefer keeping these documents offsite. Keep in mind that you are at the mercy of the financial institution as to when you can access your safe deposit box.
Electronic Storage

If you’d like to move toward less paper, there are plenty of digital storage options.

Many financial institutions and businesses now let you opt for electronic billing and statements, either through email or online account access. Some banks charge a fee for paper statements now, as electronic paperwork becomes more readily available.

For other documents, you can use a scanner to scan them into your computer, or you can take photos using your cell phone.

Keeping all of your documents on your computer isn’t very efficient and can bog down your system. Other digital storage options include external hard drives, like HDDs and SDDs, which are compact solutions for storing massive amounts of electronic data. An even more compact solution is storing electronic paperwork on a flash drive, although flash drives also are easier to misplace or damage.

If you go the digital route, it may be a good idea to create multiple backup copies in case one of them is damaged or fails. Digital backups take up much less space than having multiple paper copies of your important documents.

Another option is to go with cloud-based storage for essential paperwork. The past several years have seen an explosion of cloud-based solutions, including:
  • Dropbox
  • Google Drive
  • Microsoft OneDrive
  • iCloud
  • Amazon Cloud Drive
  • Box
  • NextCloud
  • iDrive
  • Carbonite

Using cloud-based storage not only saves on space, but also can be great for organizing and keeping your documents secure, since most services guarantee protection through encrypted networks. Many cloud-based solutions allow access through mobile devices, making your documents accessible almost anywhere in the world.

If you do end up choosing a digital storage solution, make sure you don’t need a physical copy or original document in the future. The last thing you want to do is shred something to save space, only to need it five years later.

How to Dispose of Old Financial Documents

Clearing your home of piles of old, useless paperwork is a wonderful feeling, but don’t scrap it with your weekly garbage collection. Most of these documents contain personal information you don’t want to have exposed.

According to a Federal Trade Commission (FTC) report, over 3.2 million consumer reports were filed with the Consumer Sentinel Network in 2019, and 20% of them involved identity theft. Throwing away documents with your trash exposes your information to anyone willing to do a little dirty work to steal your identity. You might not realize how much information is present on your old bills, statements, voided and canceled checks and other financial documents.

Here’s what could be present on the documents you want to throw away:
  • Full names
  • Physical addresses
  • Phone numbers
  • Account numbers
  • Routing numbers
  • Driver’s license numbers
  • Policy numbers
  • Usernames
  • Passwords
  • Membership information
  • Medical records
  • Signatures

Your best option is to shred any documents that contain sensitive information before tossing them. Either invest in a shredder for your home or utilize a professional shredding service. You will likely pay a fee for this service, but it’s a small price to keep your personal information safe.

Here are some retail stores that offer shredding services:
  • Office Depot
  • Office Max
  • Staples
  • The UPS Store
  • FedEx Office Print & Ship Centers

Many cities also hold free paper shredding days for residents. Check your city’s website for information regarding events like this.

A financial life necessarily involves a significant amount of documentation—from monthly bank statements to insurance documents to the various materials required to file your taxes. By learning what needs to stay and what’s free to go, you can minimize the amount of materials you accumulate over time.

Friday, July 10, 2020

University of St. Thomas “Faith and Entrepreneurship” STC Consulting

The University of St. Thomas Alumni Relations, & the McNair Institute for Entrepreneurism and Free Enterprise invited me to be a guest speaker at the “Seekers & Sages” Speaker series: “Faith and Entrepreneurship”

Is faith an indispensable tool for entrepreneurship? The Entrepreneurship journey requires faith and conviction that things will work out. Some of the common questions are:

1. Do I have the faith to start and grow my business?
2. Can I do it even though I have never done it in the past?
3. Should I do it even though I might not have all the answers in front of me?

You need strength that comes from your conviction that if you do to help the community, abundance will find you. You can help the community grow, be confident, be powerful, be faithful and you will achieve financial success. 3 key points:

1. Mission & purpose: You are an instrument of service. You were given the skills and the talent to help the community and to solve a problem.
2. The power of miracles: In the face of the impossible, unexpected things happen. You need to do the work.
3. Integrity: Work smart, be grateful, and never (NEVER) give up: Things will work out. Have the confidence to pursue your dreams. Did I mention NEVER give up?

Wednesday, July 1, 2020

7 Resources for 1099 Contractors During the Coronavirus Pandemic

Written by: Matthew D'Angelo, Contributor

These resources, from SBA loans to industry-specific grants, are available to freelancers, self-employed workers or independent contractors who are struggling financially.

From expanded unemployment benefits to industry-specific relief funds, there are options available for 1099 workers looking for financial relief during the COVID-19 pandemic. — Getty Images/hobo_018

COVID-19 is having an impact on all areas of the economy. From large businesses to smaller restaurants, everyone is having to adjust to a new normal in business activity. Freelancers and other 1099 contractors are no different. With several foundations, corporate relief funds and other financial programs emerging from a variety of industries, it’s not clear how freelance workers are being supported during this time.

Here is a list of seven resources for freelancers struggling through the COVID-19 pandemic, including a list of industry-specific grants and funds worth applying for as a freelancer, self-employed worker or independent contractor.

Expanded unemployment benefits

Due to COVID-19, independent contractors can qualify for unemployment payments from the government. In the past, this service was not available to freelancers and 1099 contractors. By following the steps specific to your state, you can qualify for relief and potentially a $600 weekly increase during this time. While this may be a long process to apply, it can help greatly once you’re approved. Be sure to stay up to date with your application and have an understanding of how your state’s unemployment relief is changing due to the virus.

The Small Business Administration

The SBA has announced extensive programs to help struggling small businesses during the coronavirus pandemic. While freelancers and other 1099 workers work on a contract basis, if you’ve established a business entity in your name, you may be able to qualify for a loan. In New York City alone, for example, loans with no interest are being offered to all businesses with less than 100 employees. Look into disaster relief loans and other financial assistance available in your state.

SBA debt relief
If you already have a loan through the SBA 7(a), Community Advantage, 504, and microloan programs, you can qualify for payment relief for up to six months. Again, while this isn’t a program specifically designed for freelancers, it can benefit those that have created business entities and are in debt with SBA.

Paycheck Protection Program

While initially only available for small businesses with 500 or more employees, the PPP program is being extended to independent contractors and other self-employed individuals. As of April 10, independent contractors and self-employed individuals can apply for a loan up to $100,000. Your actual loan will likely vary based on your specific situation. You can read more about the program here.

Industry-specific grants and relief funds

Depending on the industry you work within, there may be a grant or relief fund you can apply for. Below is a list of options you want to consider based on your industry. The industries include comedy, writing, contemporary arts and other creative freelance industries.


This is a curation website that gathers different grants and relief opportunities for small businesses and freelancers. GrantSpace is updated as new opportunities emerge. This service does not provide grants and relief funds for businesses, but instead curates them for easy access.


FreshBooks collects resources for small businesses and freelancers alike. It provides a comprehensive list specifically for freelancers that includes things like job opportunities, job board websites and other work options. This can be a good resource for freelance writers who’ve lost contracts due to coronavirus.

Tuesday, June 9, 2020

These days, adaptability is a must-have trait. Here’s how to spot it — and increase it

Written by: Kara Cutruzzula

This post is part of TED’s “How to Be a Better Human” series, each of which contains a piece of helpful advice from people in the TED community; browse through all the posts here.

How do you deal with immense change?

Be honest with yourself: Are you someone who embraces it and evolves with it? Or, do you find tend to retreat and stick with what you know?

In our tumultuous times, adaptability — defined as “how well a person reacts to the inevitability of change,” according to venture investor and writer Natalie Fratto in a TED Talk — is a must-have trait. Organizations want team members who can take on new responsibilities and acquire new skills as needed in an uncertain world. Not only is it a quality that you should learn to spot so you can hire and retain the right people, but it’s also one that you should build so you can remain indispensable and employable.

In a typical year, Fratto meets with hundreds of start-up founders and she must determine in the course of a brief conversation whether she wants to invest in them and their company. Adaptability is a characteristic that distinguishes many of those who go on to succeed, according to Fratto.

Adaptability is not just useful in the tech world, but for everyone else, too. “Each of us, as individuals, groups, corporations and even governments are being forced to grapple with more change than ever before in human history,” she points out. And there’s good news ahead: “Adaptability is not fixed,” she adds, noting that everyone has the capacity to measure, test, and improve their ability to adapt to new circumstances.

Here’s her advice on how to assess adaptability in others — and how you can boost it in yourself.
When interviewing people, try asking “what if” questions

Fratto says these force a person to picture multiple possible versions of the future and make their decisions accordingly. Some examples of these questions might be “What if your main revenue stream were to dry up overnight?” or “What if a heat wave prevented customers from visiting your store?” Fratto gets a sense of a candidate’s adaptability based on how many scenarios they’re able to come up with and how strong their vision is.

“People often ask too many questions in an interview,” says Fratto in an interview with TED, “but it’s better to ask four questions and then go deeper” with follow-up questions. One example of a question could be “Describe a difficult change that you’ve recently undergone at work” and a natural follow-up might be: “What would have happened if [different change X] had occurred instead?” This forces the interviewee to consider an alternative past and future.

“Tell me about a time when you were wrong” is another interview question that can yield insights. You can follow it up with “What is the most compelling argument of those who disagreed with you?” Fratto says you can often tell if people are willing to change their minds — and therefore are more adaptable — by asking them to honestly share a time when they believed they were wrong, not when others perceived they were wrong.

Instead of learning, look for signs of “unlearning”

“Unlearning” is another important sign of adaptability, according to Fratto. “Active unlearners seek to challenge what they presume to already know and instead override that data with new information,” she says.

One physical example of unlearning can be found on the ski slopes, where beginner downhill skiers are taught the “pizza” method. When you’re at the top of a hill, you point your skis toward one another — like the tip of a slice of pizza — and holding that shape will stop you from sliding down. But as you grow more comfortable, you can’t become a great skier with the pizza method; you must unlearn it. It’s necessary only to use for a short time until you get comfortable enough to take risks.

While it’s difficult to unlearn certain skills that have been drilled into our brains, it is possible to do so — and embrace change, too. “A person can also unlearn by taking a new vantage point or shifting to another perspective,” says Fratto. Layering on additional learnings can also show a person’s adaptability. “Playing at the intersection of areas where you’re not an expert can together build a new set of skills as a building block,” she adds.

This mindset is especially useful for people who are looking for a new job. If you’re seeking to switch industries, you can embrace unlearning or adjacent learning to find a new position in a different field. By looking at the individual components and pieces of your job — instead of the overall title or position — you can see where your skills might be applied in a different environment. Then, ask yourself, “In which industry is this one skill being underutilized?” and you can move forward, bringing your individual pieces of expertise with you.
Look for signs of exploration

An exploratory mindset can yield clear benefits. As an example, Fratto says after she moved to a new neighborhood, she needed to find a grocery store. She walked out of her apartment, arbitrarily turned left, and found a store a few blocks away which she began to frequent. A few months later, she turned right and stumbled into a grocery store not much further away with a better produce section. In an effort to be efficient, she had stuck with the same-old — and had missed out on something better.

How often do you do that in your own life?

“The path becomes so much more interesting when you wander,” says Fratto. “It’s better to explore and find ways to break habits that you already have, whether that’s trying to watch a movie in a different language, cooking a different cuisine, or walking an alternate route,” she says. These seemingly minor changes allow for crucial vantage point shifts and create the ability for unlearning to happen.
A person’s adaptability isn’t fixed — you can always improve it

“I believe all of us have a strong inherent capability to react to change differently,” says Fratto. “However, adaptability has to be proactive, not reactive. We have to seek it out, exercise it and flex it like a muscle.”

So how can we become more adaptable?

First, play at the intersections. Let’s say you’re an expert at marketing, for instance. If you can also make yourself knowledgeable about podcasts, you can become the translator between these teams. Seek out opportunities to bridge existing gaps at your organization.

Second, occasionally take a devil’s-advocate role at work. In some situations — stay away from high-stakes ones — you might adopt the position of respectful dissenter. This will allow you, your boss and your teammates see things from the other side. This strategy can also help you from getting too attached to your personal ideas and views.

Fratto says in the tech world, there’s an oft-repeated motto “I like leaders who have strong opinions, weakly held.” An important component of adaptability is having the ability to form a strong opinion but release it when new information becomes available and makes it obsolete.

Third, keep a failure resume or log. “It’s helpful to write down the times where you were wrong, changed your mind, or made mistakes,” says Fratto. While many of us view these things with shame or embarrassment, you can start to see them in a positive light — as steps you’ve taken on your professional journey — and learn from them instead.

Watch her TED Talk now:

Wednesday, May 20, 2020

Is a Pandemic the Right Time to Start a Business? It Just Might Be

Written by:  Amy Haimerl

Ngoc Huynh, who is planning to open a Vietnamese food stall at Salt City Market, said its entrepreneurs were helping one another.Credit...Mustafa Hussain for The New York Times

Previous financial crises gave rise to high-profile American companies. The spread of the coronavirus challenges entrepreneurs to meet new needs.
Previous financial crises gave rise to high-profile American companies. The spread of the coronavirus challenges entrepreneurs to meet new needs.

Past downturns produced some high-profile American companies: Airbnb, Disney, General Motors, Hewlett-Packard, Microsoft, Slack, Uber and Venmo, to name a few.

“Downturns or challenging times are seen as good times to start a business for two reasons,” said Rashmi Menon, entrepreneur in residence at the University of Michigan’s Zell Lurie Institute for Entrepreneurial Studies. “One is, there is less competition for resources. The second reason is that whatever changes we face, positive or negative, bring up new customer needs. And customer needs are at the core of any business.”

In March, as small businesses across the country were shutting down amid the spreading coronavirus pandemic, Shanel Fields was about to open one up.

For Ms. Fields, the timing couldn’t have been better. Her company, MD Ally, allows 911 dispatchers and other responders to route nonemergency calls and patients to virtual doctors, to help local governments improve their emergency response systems.

“Something that a lot of people don’t know is that more than half of calls that go to 911 are nonemergency,” said Ms. Fields, whose father’s experiences as a volunteer emergency medical worker sparked the idea. “Those nonemergency calls overcrowd E.R.s and delay ambulances.”

But she also recognizes how crazy it sounds to start a business during an economic collapse. She knows that while she’s hiring, many small businesses are worrying about whether they’ll ever reopen.

She’s not alone: New businesses are forming despite the pandemic, though at a significantly slower rate than before.

There have been more than 500,000 applications for an employer identification number since mid-March, according to the Census Bureau, although that is down nearly 20 percent from a year ago. Between mid-March and mid-April, the Small Business Administration issued nearly 300 start-up loans worth about $153 million, a 36 percent drop from year earlier. Stripe, the credit card processing firm, said it had handled more than $1 billion in sales for businesses that started on the platform during that time.

For Ms. Fields, opening now meant greater access to top talent. She hired her fourth employee and said more than 200 qualified applicants had submitted résumés. And being in the health care sector during a pandemic has raised her profile with funders and governments: MD Ally, which is based in Philadelphia, recently signed its first customer and closed its first round of investment worth $1 million.

For others, the timing can mean low interest rates for borrowing start-up capital, cheaper equipment as businesses sell off inventory or lower lease rates as landlords scramble to fill empty spaces.

“I’m already seeing a huge uptick in requests for kitchen leases and subleases to be used for carryout kitchens or production spaces,” said Jenn Smith, a commercial real estate agent in Detroit.

In the best of times, 20 percent of new businesses don’t survive their first year, according to federal statistics; economic headwinds present greater challenges. A restaurant or bookstore opening on Main Street, however, faces very different risks from those of a new tech firm whose employees can work from home and whose customers don’t need to gather.

“There are going to be industries that are winners, and others that are going to be losers,” said David Brown, who co-founded the start-up accelerator Techstars during the 2008 recession. “I probably wouldn’t want to be in a business right now that caters to business travelers, but I’d love to be in a business that helps enable telemedicine.”

Determining what customers need now, rather than before the pandemic, is crucial. Ms. Menon and Mr. Brown see opportunity in offering solutions to the challenges that people now face: educating their children, working from home, managing supply chains, getting a haircut or the house cleaned, seeing doctors and therapists, entertaining themselves. Even new restaurants might be successful if they consider the future of customer service rather than recreate old systems.

“If you can find innovative ways for people to feed themselves right now, that might make sense,” Ms. Menon said. “You just have to address a need.”

Figuring out how to open the food hall of the future is the task facing Maarten Jacobs, the director of community prosperity at the Allyn Family Foundation, a regional philanthropic organization in Syracuse, N.Y.

That’s not a role Mr. Jacobs expected, considering his background is in community and economic development. He is overseeing the foundation’s investment in a new four-story, 80,000-square-foot building designed to be a community gathering space and incubator for the city’s small food entrepreneurs. A mix of apartments and nonprofit offices is planned for the upper floors, but the heart of the project is Salt City Market, which will feature food stalls run by women and entrepreneurs of color, a coffee shop and a cooperative grocery store.

The project is scheduled to open in November, so Mr. Jacobs is focused on finding the safest way to open a 24,000-square-foot market even as the world is questioning when — and how — people will want to gather again.

“It keeps me up at night, that’s for sure,” Mr. Jacobs said.

He’s looking at global trends on how restaurants are opening and the safety precautions being put in place to see what he might do in Syracuse this fall. He’s considering foot-operated doors, mobile sanitation stations and a new furniture concept.

“In the past, we just wanted to make sure furniture looked cool; now it has to look cool and be built like a tank and stand up to robust cleaning,” he said.

But his biggest worry is the entrepreneurs. He doesn’t want to set them up for failure.

The foundation supported Salt City Market as a way to foster entrepreneurs who might not have the resources to open their own restaurant. It hosted a community competition to identify eight small food businesses for the market. The winners received months of technical training on everything from marketing to inventory management, as well as the promise of a commercial kitchen stall with all the equipment they need. Chefs are responsible for their own signage and small goods, like plates and napkins, as well as a start-up investment of $30,000.

“We wanted a loan that if everything goes sideways, they aren’t crippled,” Mr. Jacobs said.

But everything has gone sideways. So Mr. Jacobs wants to open in a way that ensures they can succeed. “We don’t want to jeopardize them,” he said.

So far, all eight chefs plan to move forward. But several face the hard choice of leaving their day jobs to pursue their dreams, which may have seemed romantic in normal times but is terrifying in a severe downturn.

Chef Ngoc Huynh said she was scared but still excited to open her Vietnamese kitchen in the market.
“I like to be optimistic and hope for the best,” Ms. Huynh said.

She knows the challenges of restaurant life from watching her mother and aunt run a small food and catering business while working other full-time jobs. But Ms. Huynh is reassured by the fact that she’s not doing this alone. She and the other chefs are receiving technical support from the foundation and collaborating on ways to open a restaurant in a socially distant world. The group is considering new menus and hiring delivery drivers to serve all the stalls.

“We’re thinking about this together,” Ms. Huynh said. “That’s the beauty of it. We’re all competitors, but there is a network of support.”

  • You want to start a business now? Ms. Menon suggests you ask yourself these five questions first.
  • Have I identified a new need that customers have as a result of the current crisis?
  • Can I serve this need in a way that is substantially better than the current alternatives?
  • Am I qualified to solve this customer problem?
  • If I don’t have the experience, can I hire others or find a co-founder to help me?
  • Do I have access to funding that can tide me over until my business is profitable?

Tuesday, May 5, 2020

5 keys to building a scalable businessWhat is scalability in business? 5 keys for success + 3 business organization tools


Written by: Jeanette LeBlanc

Tips on scaling a business:
  1. build a solid foundation
  2. focus on scalable business solutions
  3. embrace strategic planning
  4. focus on your core strengths
  5. be patient
If you are like most small business owners, you started really, really small. Probably just you, your laptop, and an idea.

Now growth is on your mind. Maybe you’re impatient and chomping at the bit to get to the next step, or maybe you’re scared and holding back. Either way, most small business owners have dreams that are bigger than their current reality.

The problem is, when the day to day of small business ownership can be so overwhelming, it’s tough to know what you should be doing now to ready your business for a successful future. What is scalability in business and what are your limitations? An understanding is fundamental to your success.

“We all feel some level of impatience that our businesses are not growing fast enough. Every time I look at the latest iteration of my DIY website or the stack of big ideas still in the to-do bin, I think ‘man, I’m so not where I want to be yet!’ But the beautiful thing about being in business for yourself is that you get to direct your own evolution. And allowing that evolution, however organic or stunted it may feel in the moment, is a stellar strategy in itself. Like a conductor with a symphony, you learn the rhythms and movements over time. You’ve got to grow at your own pace and feel out the bumps along the way.”
Amy Birks, The Strategy Ninja

So, how do you build a scalable business? Follow these five keys for business scalability success:

5 keys to building a scalable business

True scalability in business allows for expansion and revenue growth while minimizing increases in operational costs. Even if you’re not ready to grow right now, there are things you can do to set yourself up for scalable growth and success.

1. Build a solid foundation

Right now—while your business is small—is the perfect time to invest your time and energy in foundational systems that will allow your small business to grow into a much larger entity. These systems and processes can help you avoid the painful (and expensive) growing pains that can hit when you’re not prepared.

Having robust systems—such as a solid CRM or powerful e-commerce software—can help you untangle the web of time-consuming details and free you to focus on the parts of your business that will drive growth and expansion. Automation is the small business owner’s friend.

Review your business to see what aspects are repetitive or monotonous and make it your ultimate goal to automate them as much possible so that your attention remains focused on growth-related activities.

2. Focus on a scalable business model

In the early days it can be tempting to go with the quick (or cheap) fix. Money, time, and expertise can be in short supply, and investing in basic solutions that don’t require a huge financial investment or learning curve can seem like the wisest solution. Resist the temptation to slap together a myriad of inexpensive and inadequate options and think ahead to what will serve your business best in the future. A forward-thinking mindset can help you avoid a common small business trap: a patchwork maze of systems that just aren’t getting the job done.

Think as the owner of a business 10 times larger than your current reality. Choose solutions that will serve what is AND what may come: quality over quantity.

Simran Thadani, the executive director of Letterform Archive, a nonprofit organization that has a library of typography and design elements, has a few tools up her sleeve that helped her achieve scalable growth:

  1. Trello: Imagine digitizing your wall of sticky note to-do lists. That’s basically what you get with Trello. Using the app, you can create note cards that you can put on lists and then move them around by clicking and dragging them. Trello gives you a flexible, interactive, collaborative tool with which you can chart out anything from team roles on a specific project to your company's 18-month road map. You can also use it to simply to track your to-do list.
  2. Gusto (formerly Zen Payroll): This app allows companies to manage payroll and benefits in one solution. Plus, when employees receive their first paychecks, the app says, "Hey, you've just been paid. Isn't today a beautiful day?" with a picture of butterflies and flowers.
  3. Google Ventures Design Sprint: A word of advice from Thadani: “Slow down to scale up.” The sprint begins with quiet time to brainstorm. Employees are told there are no bad ideas, then asked to write everything they think of down on a sticky note and stick it up on a wall
    This helps to eliminate one voice dominating, or dead silence from all.

    People then use stars or tallies to vote on their favorite ideas. Generally, you’ll find that it’s not just one person with all the good ideas. Typically, all parts of the company will be represented, and all employees have ideas worth contributing.

    Next, you talk about validating the idea, asking the team: Why did you choose this idea? Why did this idea have three stars and the next had five? What's the best way to pursue the idea? From there, you can prototype the idea. The exercise brings tremendous validation—not just of the best ideas, but of the people who brought up those ideas.

    The frequency of your sprints depends on how frequently you feel you need to iterate on something new, whether it’s to improve a process or come up with a new idea from scratch. The design sprint works in a range of different situations. Bt you don’t want to rely on it as a crutch, like going back to the drawing board because it didn’t work. Take the time you need, but don’t get stuck in too many meetings. Use the sprint to figure out the path to the next idea. Iterate from where you’re stuck. Be confident in the good ideas you’ve had thus far, and then take things from there.
3. Embrace strategic planning

Strategic planning is the link between a great idea and true success and growth. More a philosophy of operation than a one-time event, it requires ongoing attention to detail and an investment of time. Knowing your business inside and out can prepare you to deal with challenges and prepare you for opportunities to scale.

"When you take the time to define where you’re going, you can develop a plan, stay on course, make adjustments as needed and reach your destination."
—Keap CEO Clate Mask

Develop a series of quarterly and annual priorities, a mission that sets the tone for the next three to five years of operation and a BHAG (Big Hairy Audacious Goal) to keep you reaching for success.

4. Focus on your core strengths

You can’t be everywhere. Focusing on your core strengths and hiring or outsourcing the rest of the tasks associated with running your small business is essential to a scalable business. Concentrate on working on your business instead of in your business; scalable business owners are experts at leveraging outside resources. Build a staff or team of freelancers to do what they do best so you can concentrate on letting your own native genius work its magic.

5. Be patient

Rome wasn’t built in a day. Good things come to those who wait. Patience is a virtue.

Cliché or not, there’s a reason these little gems of wisdom are so pervasive. In your small business, patience is just as important as it is in the rest of life. Take the time along the way to maximize the systems, processes, and people you rely on to make your operation a success so that when opportunities present themselves, your business is ready to grow.

Remember, a path of slow and steady growth is much more sustainable–and scalable–in the long run.

Startup vs. Small Business: What’s the Real Difference?

Written by: Emily Kate Pope

Startup vs. Small Business: The Main Difference

While the difference between a startup and a small business is subjective, it often comes down to the company’s growth goals and revenue forecast. Startups focus on disrupting markets and driving top-line revenue at a fast pace. Small businesses, on the other hand, often set their goals on long-term, stable growth in an existing market.

If you work in the tech industry, you’ve probably heard the term “startup” thrown around a lot. Especially if you live in a tech hub like Silicon Valley, Hong Kong, or New York. You probably even know a few people building their own startup—if you’re not building one yourself!

Despite the fact that hundreds of thousands of new startups are established every year in the US alone, many people still don’t understand the difference between a startup vs small business—and trust me, the two are very different. To distinguish these two organizational entities, let’s take a deeper dive into the definition of a startup.

What Is a Startup?

For years, investors treated startups as smaller versions of large companies; this was problematic because there is a vast ideological (and organizational) difference between a startup, small business, and large corporation, which necessitates different funding strategies and KPIs.

According to serial entrepreneur and Silicon Valley legend Steve Blank, a startup is a “temporary organization designed to search for a repeatable and scalable business model.” A startup, which he argues in the context of the tech industry (and this conversation) should be short for “scalable startup,” is searching to not only prove their business model but to do so quickly, in a way that will have a significant impact on the current market. Which brings us to our first major difference between a startup vs small business.

A “Scalable” Startup Has The Intent To Become A Large Company

The first real difference between a startup vs small business is really the growth intent behind the business.

As Blank describes it, a scalable startup founder doesn’t just want to be her own boss; she wants to take over the universe. From day one her intent is to grow her startup into a large, disruptive company. She believes that she has come across the next “big idea,” one that will truly shake up the industry, take customers from existing companies or even create a new market.

This stance is in stark contrast with the definition of a small business, which the U.S. Small Business Administration (SBA) describes as “independently owned and operated, organized for profit, and not dominant in its field.”

A small business owner might be starting a business that they believe solves a gap or provides a service within an existing market—one that will provide steady, long-term revenue.

Therefore, the driving force behind the two business models is different: The intent of the startup founder is to disrupt the market with a scalable and impactful business model; whereas the intent of the small business owner is to be her own boss and secure a place in the local market.

To be sure, the latter is the prevailing model of entrepreneurship in the United States: grocery stores, delis, hair salons, plumbers, electricians, etc. and their contribution to the local economy cannot be overstated. Small businesses (those businesses with fewer than 500 employees) employ over 40 million workers.

However, for better or for worse, the ultimate motivation behind a small business is fundamentally different from that of scalable startup.

A Startup Is Temporary

Another major difference between a startup and a small business? How long it plans to exist.

The organizational function of the startup is to search for a repeatable and scalable business model. According to Blank, this means that a startup founder has three main functions:

  1. To provide a vision of a product with a set of features.
  2. To create a series of hypotheses about all the pieces of the business model: Who are the customers? What are the distributions channels? How do we build and finance the company, etc.
  3. To quickly validate whether the model is correct by seeing if customers behave as your model predicts (which he admits they rarely do).

Given this definition, it stands that once a business model has been proven the function of the organization must shift to produce outcomes and execute said model; in many cases removing the agility and innovation that once existed in the early days of the business.

A Startup Is Funded Differently

While both a startup and small business will likely start with funding from the founder’s savings, friends and family, or a bank loan; if a startup is successful, it will receive additional series of startup funding from angel investors, venture capitalist, and (if it’s lucky) with an initial public offering (IPO). With each series of funding, the startup founder gives up a piece of her company–this is called equity, and everyone who has it becomes a co-owner of the company.

Eventually, a startup may cease to exist as an independent entity via a merger or business acquisition. To a small business owner, relinquishing control would defeat the purpose of running their own business; however, for the startup it may be necessary to sustain seemingly infinite growth.

Although a startup vs small business are still run by entrepreneurs (small business owners or not); the intent, primary function, and funding of their respective business model’s are radically different. Watch Steve Blank describe the difference further in the video below.

A Startup Assumes a Lot of Risk

A startup is trying to see if their vision of a product or service does indeed disrupt a market. Though lots of research and time go into the pre-launch of a startup, entrepreneurs are essentially making an educated bet that their idea is going to have traction in the market. Oftentimes, it doesn’t. Investing your time and money into a startup is a huge risk.

That’s not to say small business owners don’t assume any risk either. In fact, 20% of small businesses fail in their first year—though small business failure is often a result of cash flow management and funding. But with a small business, there’s less of a risk that the business idea won’t have a fit in the established market.

Testimonial Melly Rocha, Health Home Assistance LLC

Saturday, May 2, 2020

What services are provided by a small business accountant?

Written by: Erasmus Pretorius

One of the questions I get asked most when I am speaking to a new or prospective client, is what additional services do we offer our clients, apart from the traditional accounting services of keeping your books and finances organized

A Good Accounting Team and its Accounting Services

The truth is, a good accounting firm will offer a number of different accounting services that are included in what most people consider traditional accounting. You see, as an accountant, I get to see the core numbers for a business. I get to see where the business is bleeding cash, or missing out on revenue. I get to see which processes are working, and which aren’t. I get to look at businesses at the kind of granular level that most people don’t ever see. And because of that, I, as an accountant or as part of a team of accountants, can provide valuable advice to an owner or to a business’s management team.

What most people understand as additional services are, in fact, the core services for any good accounting team. What I am going to try to do here is give you an overview of what services are offered by an small business accountant.

1. Tax Returns and Strategy

Everybody knows that small business accountants do tax returns. That’s just common sense. But we do much more than that. You see, we do the tax returns for hundreds of businesses so we have to know the tax code, inside and out. We have know what’s changed, what’s in for a certain year and out the next. And, even more than that, we need to know how that affects your business. So if there is any coming change to the tax code, we know about it first and we can help you to plan accordingly.

Oftentimes we get clients that come on board and they’ve never had a proper accountant do their financials for them. And what we see a lot of the time is that they are missing out on valuable information about tax exemptions or tax breaks for their business that can even be the difference between the success and failure of the business. So that’s probably one of the key accounting services that we offer as accountants for small businesses, the ability to create a clear and effective tax strategy for you.

2. Debt Planning and Reduction

Debt planing, credit card management and debt reduction are other key areas where an accounting company can help a small business. One of the biggest challenges today for any small business is obtaining cost effective financing, and then managing that debt. The great advantage we have as accountants is that we have a working knowledge of most of the financing services that are available on the market, and we can help you choose the financing model that works best for your business.

For some clients one of the first things we do is advise them to adopt a debt restructuring strategy that drastically reduces their monthly payments to service their debt, which then frees up their cash flow.

3. Operational Bookkeeping and Payroll Management

We find that one of the biggest challenges for any many businesses today is managing their payroll, especially if the business has only recently started to take on employees. So that’s another key area that we get to provide consulting and advisory accounting services to small business. In fact, it’s probably a good thing to talk to your accountant before making any new hire, first to make sure that your business is in line with current employment legislation, and second, to make sure you take all the associated costs for a new hire into account when you are deciding on salaries and benefits.

4. Management Consulting

Management consulting for small business includes all of the items above, but I think it’s important to mention it here again because it provides an important context for an experience that is common to most small business owners; they often struggle to find somebody to whom they can turn to when they need advice.

I speak personally when I say that one of the main reasons to hire an accountant (or an accounting firm in most cases) is that you have somebody who you can go to when you need advice. Most times when a business owner asks us for advice, we’ve seen a similar situation before at other business and we can provide him or her with relevant and practical advice based on what we’ve seen that works.

5. Business Development and Valuation

One final accounting service that an accounting team can offer that I think is important to mention is in business development and valuation. There comes a time for most business owners when they need to think about selling their business, either because they are reaching retirement, or because it’s part of their business plan and they are ready to move on to the next project.

Again, remember that your business won’t be the first business that we would have offered this service to, so we will know how and were to go to build your business’s value so that when it comes time to sell all or a part of it (maybe you are ready to take on a new partner) you have all the information you need.

In conclusion

In conclusion, along with the core accounting services we offer, accounting firms provide a number of key additional services that you as a business owner should take advantage of to stay financially organized, tax compliant and help your business to grow. You shouldn’t look at your accounting firm as merely an outsourcing cost for bookkeeping, but as a key business partner. It’s what we like best about being accountants here at The Accounting Team. we get to use our knowledge and our experience to help your business grow.

Erasmus Pretorius is a Chartered Accountant and CEO of The Accounting Team. He has been helping small business grow since 2001.

Thursday, April 30, 2020

Why The Coronavirus Pandemic Should Motivate You To Start A Company And Eight Excuses That No Longer Matter

Written by: Bernhard Schroeder

This coronavirus pandemic will spawn new startup companies across the world.

What were you born to do? Were you born to be an accountant, a marketer or a project manager? Probably not. And who started the company that you are working for? The people that started the company at some point became entrepreneurial and asked themselves, “Why am I working for this person or company?” So, is this the right time for you to start a company?

Just like Uber, Slack, Square, WhatsApp, and Instagram were created coming out of the last recession, there will be many innovative companies spawned from this coronavirus pandemic. Quite a few talented people are being furloughed and, like you, they might be re-examining what they really want out of life. And there is reason to be optimistic. The good news is that more people are now actively seeking to become entrepreneurs. A new report from the Global Entrepreneurship Monitor (GEM), sponsored by Babson College and Baruch College, finds that 27 million working-age Americans, nearly 14%, are starting or running new businesses. And Millennials and Gen-Z are driving higher interest in entrepreneurship as 51% of the working population now believes that there are actually good opportunities to start companies. So, why haven’t you considered starting a company?

There are several reasons for you not being more entrepreneurial but none of them are valid. Start to identify what is holding you back by examining and then mitigating the reasons/excuses listed below.

Fear of failure. While starting a business could be risky, so is thinking that you will have a company(s) that will take care of you and offer you employment for 30 years. Nothing in employment is guaranteed, you have to perform and get better at whatever you do or you will be replaced. Well, if that’s the case, that sounds riskier then starting a company where the control is in your hands. Life is an adventure, working for someone else for 30 years is not.

Few resources to start a business
. People like to believe have little to no money to start a business. They also do not know where to find the capital they need to start a business. So even if they want to start a business, the lack of capital is a huge stumbling block for them. Well crowdfunding exists today where you can raise money through pre-sales of the product or even get investors. And other cloud based services like Shopify for e-commerce, etc. allow you to get up and running for very little money. There has never been a better time to start a company.

Don’t know anything about entrepreneurship. You may have never been exposed to entrepreneurship so you simply don’t consider starting a business. You can change that by joining other networks of entrepreneurs or adding more entrepreneurs to your network. The more you meet and learn from these people, the more normal it will seem to start your own company. The more knowledge you acquire, the lower your risk factor.

Entrepreneurship can be stressful. Starting and managing a business can be very stressful. It typically means understanding the market, developing the right products that will address the needs of the target market, and possessing the skills needed to jumpstart and run the business. However, working in a job or career where you have different people managing you to their expectations is also stressful. Most people in life want the freedom of choice to determine the shape of their lives and what better freedom than to create your own company and be responsible to you.

You love your job.
You may actually love your current job, and there’s nothing in the world you want to do but work in your current job. You already feel that the corporate world gives you the challenging, exciting environment that you crave. There’s no reason to resign and start a business because you have already found the perfect job. Right up until the company is merged or sold and you need to start proving yourself all over again after ten years of hard work. If you love “what” you do, then you can do the same thing for yourself inside your company.

Starting a business is hard work. There are people who work 16 hour workdays, or work in two or three jobs (aside from their full time jobs). But despite the hard work and the long hours they put in, they still have barely make enough to live comfortably. They are living paycheck to paycheck. If they are already working that hard to earn a decent livable income, they think that starting a business requires double that effort, which they don’t want. Not true. It’s not about how many hours you work but the quality of those hours. And if you are going to work hard anyway in your career, might as well work for yourself. Plus, when you work on your own company and its something you love, it does not feel like work.

You fear selling. Whether you work in a service-oriented business or producing a product, being in business means selling. And, while you may not be in sales, whether you realize it or not, you have been selling your whole life. At a minimum, you have been selling you and perhaps even selling your companies products or services. At networking events, you are selling your company. When you truly care about your company and your products or services, it will feel less like selling and more like helping people.

Security of a steady paycheck
. Starting a business can seem daunting. Sometimes you’re up and sometimes you’re down. This means that there might be days of strong revenue, but also days when cash flow is extremely tight, especially during a down economy. There are people who cannot live with the downs and ups of running a business, and instead prefer the stability and security of a job and a regular paycheck. The real issue is that unless you work for the government, there is no guarantee of jobs for life. Do you wonder why so many companies are started in a recession? They are started by people who got laid off from their jobs.

Assume you will have a long and great life. And that you will work 30-40 years doing things you love. If you are going to work that long at something you love, might as well do it for yourself. The freedom and reward for building a great little company is amazing.

Wednesday, April 22, 2020

How Can a CFO Help in a Time of Crisis?

how can a cfo help in a time of crisis

Written by: Bill Palmer,

The current economic uncertainty has many businesses closely evaluating their current and future staffing needs. While some positions are being cut, especially in the hospitality and travel sectors, many businesses are strategically hiring financial professionals into executive leadership positions during the downturn.

Companies that previously had tasked their CEOs with handling finance functions are now hiring dedicated CFOs (or outsourcing CFO roles to reputable third parties) to ensure they will be able to weather the new economic storm. With ambiguity over how long businesses will need to keep their offices and storefronts closed paired with unpredictability in the stock market, business owners and CEOs are feeling increased pressure to make critical strategic financial decisions for the health of their organizations.

An experienced CFO can provide multi-scenario modeling to aid in tactical decision-making, offer an unbiased financial perspective, act as a confidential sounding board for the CEO, and handle negotiations with essential parties to benefit the overall organization.

Modeling & Planning

Unlike accounting, which is fundamentally about the past, finance is focused on planning for the future.

Seasoned CFOs can use current financial indicators and their previous experience to model and plan for the various scenarios that a business may face in the coming months and years. These plans can inform critical decision-making related to spending cuts, rightsizing the labor force, and timing planned business investments. CFOs can forecast the short and long-term impacts of these decisions to better position the company in response to economic shocks.

With new federal and state business relief packages being rolled out, new employee protections being passed, and additional financing options being offered by payment processors and vendors, an experienced CFO can help navigate the myriad options available to aid businesses in this difficult time.

In this way, a CFO not only mitigates the effect of a downturn of a business proactively but can also help right the ship when the company is struggling in a sea of a difficult financial conditions. 

A consulting CFO is a neutral, independent voice in the room. Experienced CFOs typically follow the facts without pushing a personal agenda or engaging in office politics anyways, but consulting CFOs are even more likely to provide an unbiased perspective. Business owners and executive leadership teams can be reassured that a CFO consultant is acting in the best interest of the company and its stakeholders (owners, employees, and investors) rather than for job protection or other personal agendas.

Outsourcing the CFO role also provides an experienced and confidential sounding board for the CEO, which is especially important in family-owned businesses. While all business owners and CEOs feel some measure of emotional isolation, family businesses exacerbate this situation by adding personal relationship dynamics into the mix. Business leaders at family-owned companies may find themselves needing to balance family relationships and business success, especially in times of crisis. In this scenario, a CFO can provide the confidential conversational space that a CEO needs to make difficult decisions and prioritize the health of the business. Additionally, a consulting CFO can even act as a scapegoat for unpopular but necessary decisions, allowing the CEO to preserve existing internal relationships.

Third Party Negotiations

Because of their experience a CFO can also add credibility to the perceived quality of management and build bridges with capital providers to gain acceptance of forecast projections and strategic plans. The result is a company with less perceived risk and a higher perceived value, which is crucial in establishing mutually beneficial financial solutions while working with external parties.

A consulting CFO has credibility with lenders and personal relationships with banks to facilitate negotiations with these key players. The scope of a CFO’s experience will also aid in negotiating with third parties like landlords, vendors, and customers through difficult times when financing and payment options may need to be changed.

The impact of COVID-19 on latino-owned businesses