Just finished reading a story in The LA Times entitled, Filling a Natural Niche. This small business report describes a small, but fast growing business that has run into financial challenges which include working capital deficits and operating losses. In the company's most recent financial statements, the accountants "raise substantial doubt about the company's ability to continue as a going concern."It's easy to find stories about small businesses that encounter problems of a variety of types when they grow too fast. What is interesting about this story is the author, Ashley Surdin, made a point to say that the owner also serves as the company's chief financial officer, but has no formal financial training.
When small companies grow into bigger companies they need to ensure that someone in the organization knows how to establish financial controls, implement accurate and reliable reporting systems, forecast cash flows, create credit and collections policies and develop tools to ensure the company prices its products and services correctly.
Small business often thinks they can get by for now or that adding this type of financial expertise is too expensive. In reality, they can only get by until outside capital is needed and not adding the financial expertise is more expensive in the long run.
If you have visions of profitable growth but no formal financial training, ask for help. Speak to your accounting firm - many offer CFO services on a part time basis for an hourly fee. Speak to a firm like my alliance partner, CFO 911 Solutions - they can quickly fix immediate problems, upgrade your financial skill set and help you determine if you need a part time CFO or controller.
Don't be afraid - the cure is often much less painful than the illness!
Need help finding the right lender or telling your story the right way? Read "Matchmaking for Business Loans" and give me a call!
Related Tags: working capital, cash flow, CFO, small business, LA Times, CFO 911 Solutions
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