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The Cash Flow CFO Podcast

Hey everybody, welcome to The Cash Flow CFO podcast, the show that explores the financial side of running a business for people who want to maximize profitability and scale with confidence.

If you want to make smart financial decisions based on data and put more of your hard-earned profits into your pocket, this is the podcast for you.

The Cash Flow CFO Podcast is brought to you by The Cash Flow CFO. Did you know that, on average, business owners have up to 84% of their personal net worth tied up in their business? Our team of virtual CPAs and CFOs, as well as accounting and bookkeeping experts empower business owners just like you to make big leaps that help them maximize profitability and scale with confidence.

Visit thecashflowcfo.com for more information, and thank you for listening.

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Last Episode Date: 9 September 2024

Total Episodes: 74

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The Six Financial Metrics Every Business Owner Must Track for Success
9 September 2024
The Six Financial Metrics Every Business Owner Must Track for Success

“If you could only look at six numbers, here's the most important ones for you to keep an eye on. They're going to help you understand the health of your business and how things are going in relation to where you are and the activities that your business is undergoing to get you to that end result of what it is that you are trying to achieve with the business." - Andrea Jenson Welcome back to a new episode of the Cash Flow CFO Podcast! Today, we're diving deep into the six key numbers every business owner should focus on at the end of each month. These metrics are crucial for understanding the health of your business, and I want to make sure you know exactly what to look for. We’ll break down each number so that you can confidently review your financial reports and make informed decisions. Join us to learn the whole story! “There are some crazy statistics out there that nearly 30% of the businesses that go under do so because of cash flow problems, and the number one source of cash flow problems generally leads back to a bad business model and too high of a percentage of cost of goods sold." - Andrea Jenson By focusing on these six metrics, you'll have a comprehensive view of your business's financial health. They’ll help you make informed decisions, adjust strategies as needed, and ultimately steer your business toward success. So, take some time each month to review these numbers, and you'll be well on your way to running a thriving business. Want to get in touch with Andrea Jenson? Website: https://thecashflowcfo.com Podcast: https://pod.co/the-cash-flow-cfo-podcast LinkedIn: https://www.linkedin.com/company/the-cash-flow-cfo Facebook: https://www.facebook.com/thecashflowcfo Instagram: https://www.instagram.com/thecashflow.cfo YouTube: https://www.youtube.com/channel/UC0kQopRCt9TEbgYjmqA4SMQ

22 min
Getting Paid on Time: Mastering Accounts Receivable
2 September 2024
Getting Paid on Time: Mastering Accounts Receivable

"Having a healthy accounts receivable is really going to keep the business self-sustained, relying on their own cash flow that's being generated from sales and delivery without having to go out to outside resources." - Andrea Jenson Welcome to a brand new episode of the Cash Flow CFO Podcast. Join me for a conversation about an issue that's been cropping up a lot lately... slowdowns with accounts receivable. If you're noticing a delay in your receivables, it's crucial to address it before it impacts your cash flow and ability to meet financial obligations. I discuss some actionable strategies you can implement right now to help get your cash flow back on track and keep your business self-sustaining. Join me to learn the whole story! "When you have a prolonged accounts receivable problem, it's going to catch up with you and eventually it could potentially damage your credit ratings and increase the cost of borrowing money down the road." - Andrea Jenson Identifying Root Causes and Prioritizing Receivables Both external factors, like economic downturns, and internal inefficiencies can cause delays in getting paid. I share the importance of identifying the root causes of these delays and how to prioritize your receivables to collect on high-value invoices first. Additionally, I highlight the significance of maintaining open and personal communication with your clients, which can help facilitate faster payments and strengthen your working relationships. Optimizing Internal Processes Once you've addressed immediate receivables issues, it's essential to optimize your internal processes to prevent future delays. From improving invoicing timelines to implementing automated systems, I cover practical steps you can take to tighten up your accounts receivable management. And beyond that, I emphasize the importance of clear contract terms and creditworthiness checks to ensure you're extending credit to reliable clients. Proactive Communication I also encourage you to be proactive in reaching out to clients with outstanding invoices. Most delays aren't due to malice but simple issues that can be resolved with a quick conversation. By staying on top of your receivables and fostering transparent communication, you can avoid cash flow problems and keep your business running smoothly. If you need more specific advice or templates, feel free to reach out—I'm here to help! "If your team is doing that confirmation check-in to make sure that the client received the invoice, they can also be saying, 'We also want to make sure that there's accuracy and we're clear on the terms.'" - Andrea Jenson Want to get in touch with Andrea Jenson? Website: https://thecashflowcfo.com Podcast: https://pod.co/the-cash-flow-cfo-podcast LinkedIn: https://www.linkedin.com/company/the-cash-flow-cfo Facebook: https://www.facebook.com/thecashflowcfo Instagram: https://www.instagram.com/thecashflow.cfo YouTube: https://www.youtube.com/channel/UC0kQopRCt9TEbgYjmqA4SMQ

23 min
Why Your CPA and Bookkeeper Aren’t Enough: The Missing Piece in Your Financial Strategy
26 August 2024
Why Your CPA and Bookkeeper Aren’t Enough: The Missing Piece in Your Financial Strategy

“Having a plan in place is what removes the stress and the worry and the weight of managing your finances because otherwise we’re kind of just throwing spaghetti at the wall to see what sticks." - Andrea Jenson Welcome back to a brand new episode of the Cash Flow CFO Podcast! In today’s solo episode, I’m excited to talk about a discovery call I had with a potential client that reignited my passion for what we do at The Cashflow CFO. During our conversation, I had a light bulb moment about the common frustrations business owners face when it comes to making financial decisions. Despite having a CPA and a bookkeeper, many still feel like they’re in the dark, unsure how to use their financial data to guide their business. Join us to learn the whole story! “Everybody in your finance division has a role to play... and most business owners, they have the bookkeeper, they have the tax preparer, the CPA, and they’re still saying, ‘I’m missing something.’" - Andrea Jenson The Importance of Forward-Looking Planning Tools The key issue we discussed was the difference between historical financial reports and forward-looking planning tools. Many business owners rely on their profit and loss statements, balance sheets, and cash flow statements, but these documents are backward-looking and don’t help much in planning future moves. What’s missing is a strategic plan that includes forecasting, sales projections, and a clear understanding of where you want your business to be in the next one, three, or five years. Planning Ahead for Business Growth We also talked about the importance of knowing your sales pipeline and understanding your sales conversion rate. By planning ahead, you can ensure that you have the right team and resources in place to handle future business. This kind of strategic planning removes the stress and guesswork from managing your finances, helping you to make informed decisions about hiring, investing, and scaling your business. Allocating Revenue for Success Finally, I walked him through how to allocate revenue into different budget categories, like cost of goods sold, marketing, general and administrative expenses, and profit. This approach helps ensure that you’re a good steward of your business’s money while still achieving your financial goals. It was a great conversation, and I hope it helps you too! If you have any questions or want to chat more, feel free to reach out to me at TheCashflowCFO.com. “You have to create the plan. The plan has to align with your big picture vision, right? Because you have the vision and you're backing it up with strategy and that strategy comes at a cost." - Andrea Jenson Want to get in touch with Andrea Jenson? Website: https://thecashflowcfo.com/ Podcast: https://pod.co/the-cash-flow-cfo-podcast LinkedIn: https://www.linkedin.com/company/the-cash-flow-cfo/ Facebook: https://www.facebook.com/thecashflowcfo/ Instagram: https://www.instagram.com/cashflowcfo/ YouTube: https://www.youtube.com/channel/UC0kQopRCt9TEbgYjmqA4SMQ

17 min
Elevating Your Benefits Strategy with Dennis Carlson
19 August 2024
Elevating Your Benefits Strategy with Dennis Carlson

"Self-insurance isn't just for large corporations; small and midsize businesses can also benefit from the flexibility and potential savings it offers."  - Dennis Carlson Welcome to a brand new episode of the Cash Flow CFO Podcast. Join me for a second conversation with Dennis Carlson, Executive Benefits Advisor for Marsh McLennan Agency. Dennis previously played the role of entrepreneur inside the insurance industry, founding Bespoke Benefits in 2009, which was later acquired in 2017. Now, he leads the executive benefits practice for Marsh McLennan Agency in the western United States. Dennis has extensive experience advising on employee and executive benefits, helping businesses attract and retain top talent. Continue to get to know him, and learn from some of his wisdom. Join us to learn the whole story!   "It's not about cutting corners—it's about customizing benefits in a way that aligns with your budget while still providing meaningful coverage to employees."  - Dennis Carlson   Involving Finance in Benefits Decisions Dennis Carlson highlights the critical need for involving finance teams in employee benefits decisions. Traditionally, these decisions have been the domain of HR or office management, but integrating finance professionals into the conversation ensures that budget planning and cost control are thoroughly considered. This collaboration allows businesses to explore various funding options that might be overlooked if finance isn’t part of the discussion. The Case for Alternative Funding Strategies Dennis introduces alternative funding mechanisms as a viable strategy for small and midsize businesses to manage their benefits costs more effectively. While these strategies are often associated with large companies, Dennis explains that smaller businesses can also benefit from self-insured or partially self-insured plans. These options provide greater control over healthcare expenses, offering a potential path to significant cost savings. Customizing Benefits for Cost Efficiency Dennis shares insights on how employers can customize their benefits offerings to achieve cost efficiency. He suggests considering high-deductible health plans paired with tailored funding mechanisms as a way to provide comprehensive coverage while managing costs. By working closely with brokers, employers can design benefits packages that meet their financial constraints without sacrificing quality. The Role of Communication in Benefits Success Effective communication is a key theme in Dennis’s advice. He emphasizes the importance of ensuring that employees fully understand their benefits and how to use them. Clear communication not only helps employees maximize the value of their benefits but also enhances their appreciation for what their employer provides, leading to better engagement and satisfaction.   "Bringing finance into the benefits conversation early allows companies to explore funding options that may not even be on the table if finance isn’t involved."  - Dennis Carlson   Want to get in touch with Dennis Carlson? Email: dennis.carlson@marshmma.com LinkedIn: https://www.linkedin.com/in/denniscarlson Website: https://www.marshmma.com   Want to get in touch with Andrea Jenson? Website: https://thecashflowcfo.com Podcast: https://pod.co/the-cash-flow-cfo-podcast LinkedIn: https://www.linkedin.com/company/the-cash-flow-cfo Facebook: https://www.facebook.com/thecashflowcfo Instagram: https://www.instagram.com/thecashflow.cfo YouTube: https://www.youtube.com/channel/UC0kQopRCt9TEbgYjmqA4SMQ

39 min
Protect Your People and Your Business: Dennis Carlson on How Insurance Needs Grow with Your Company
22 July 2024
Protect Your People and Your Business: Dennis Carlson on How Insurance Needs Grow with Your Company

“…as a business owner or as just a CEO running a business… probably the first thing you should be thinking about… as it relates to attracting and retaining employees… is are the benefits that we offer today working.” - Dennis Carlson   Welcome to a brand new episode of the Cash Flow CFO Podcast. Join me for a conversation with Dennis Carlson, Executive Benefits Advisor for Marsh McLennan Agency. Dennis previously played the role of entrepreneur inside the insurance industry, founding Bespoke Benefits in 2009, which was later acquired in 2017. Now, he leads the executive benefits practice for Marsh McLennan Agency in the western United States. Dennis has extensive experience advising on employee and executive benefits, helping businesses attract and retain top talent. Get to know him, and hear some of his wisdom. Join us to learn the whole story!   “…really every small business owner should be thinking about these things. And… it's one of those things that nobody wants to deal with. It's easy to push off and easy to not think about.” - Dennis Carlson   You Get What You Pay For Dennis and I dive into the often overlooked aspects of executive benefits. We discuss the financial challenges businesses face when offering competitive benefit packages and explore alternative financing strategies to make these benefits more affordable. Dennis highlights the importance of finding a balance between cost and value, ensuring that businesses can attract top talent without breaking the bank.   Renaissance Man We also touch on Dennis’s journey into the insurance industry, which began unexpectedly after a stint in the music industry. His marketing background played a pivotal role in his transition to insurance, where he built an employee benefits practice from scratch. Dennis shares how leveraging technology has been crucial in keeping ahead of the competition in an industry that is traditionally slow to adapt.   Human Capital We get deep into the specific benefits that business owners should consider for their executive teams, such as life insurance, disability insurance, and retirement plans. Dennis emphasizes the need for benefits that cover the unique needs of high-earning executives. We discuss the significance of capturing variable compensation and ensuring comprehensive coverage. Dennis also explains how insurance can protect businesses from the sudden loss of key personnel.   “...it's for that individual employee who, that if something happened to them unexpectedly, sick or hurt, can't work or passed away unexpectedly… what would it cost the business to rehire, retrain… lost income because maybe they were one of the top salespeople?” - Dennis Carlson   Want to get in touch with Dennis Carlson? Email: dennis.carlson@marshmma.com LinkedIn: https://www.linkedin.com/in/denniscarlson Website: https://www.marshmma.com Want to get in touch with Andrea Jenson? Website: https://thecashflowcfo.com Podcast: https://pod.co/the-cash-flow-cfo-podcast LinkedIn: https://www.linkedin.com/company/the-cash-flow-cfo Facebook: https://www.facebook.com/thecashflowcfo Instagram: https://www.instagram.com/thecashflow.cfo YouTube: https://www.youtube.com/channel/UC0kQopRCt9TEbgYjmqA4SMQ

36 min
Crowd Favorite: Making Business Sense with Supplier Diversity: Insights with Jean Kristensen
15 July 2024
Crowd Favorite: Making Business Sense with Supplier Diversity: Insights with Jean Kristensen

“Part of my journey is making sure that, you know, local communities and minority and women owned businesses understand about the various opportunities that are available through government agencies or large corporations.” - Jean Kristensen Welcome back to the Cash Flow CFO Podcast! This episode was so popular with our listeners that we are rebroadcasting it in case anyone missed it the first time. In it, I interview Jean Kristensen, the CEO and chief consultant at JKA Solutions. Jean connects women and minority businesses with government and large corporate entities seeking diversity in their contracts. Previously, Jean experienced firsthand the struggles and successes that come with rapidly scaling a family business built from scratch. Join us to learn the whole story! “There are so many of these partnerships happening right now where non-minority firms, non-diverse firms, large companies, are looking to gain access to market share that is earmarked for small businesses.” - Jean Kristensen Transformative Leadership and Impactful Change Under Jean's leadership at JKA Solutions, a dedication to empowering businesses through supplier diversity, outreach, consulting, and training is evident. Her personal success story of transforming a family-run security guard company into a thriving enterprise showcases the transformative power of supplier diversity. Others have taken note of Jean, who’s found herself included among New York’s MWBE Power 50, and named as one of the "Top Women to Watch in Real Estate." Exploring Opportunities Andrea learns about Jean’s unique career path, from the family's security guard company to becoming a leading figure in supplier diversity. Jean shares challenges and triumphs, offering insights into the vast landscape of opportunities for women and minority-owned businesses. The conversation delves into government contracts, corporate initiatives, and upcoming investments in diversity expected from the public and private sectors. Business Growth with a Social Purpose: Actionable Insights In the final segment, Andrea and Jean discuss steps for businesses looking to scale and tap into diversity-seeking opportunities. Jean emphasizes the need for intentional planning, financial health, and strategic partnerships. Andrea and Jean both note the importance of well-structured financial foundations and the role of organizations like The Cash Flow CFO, which guide businesses toward sustainable growth. “…I don't want to make it sound perfect, I don't want to make it sound easy, but we were able to gain access to many lucrative government contracts and many contracts in the private sector that propelled us from a small family run business to one of the largest companies, largest minority women owned security companies at the time…” - Jean Kristensen Want to get in touch with Jean Kristensen? Website: https://jkasolutions.com/ LinkedIn: https://www.linkedin.com/in/jeankristensenassociates Facebook: https://www.facebook.com/JEANKRISTENSENASSOCIATE Twitter: https://twitter.com/jeankristensen Want to get in touch with Andrea Jenson? Website: https://thecashflowcfo.com/ Podcast: https://pod.co/the-cash-flow-cfo-podcast LinkedIn: https://www.linkedin.com/company/the-cash-flow-cfo/ Facebook: https://www.facebook.com/thecashflowcfo/ Instagram: https://www.instagram.com/cashflowcfo/ YouTube: https://www.youtube.com/channel/UC0kQopRCt9TEbgYjmqA4SMQ

44 min
Exploring Insurance Intricacies with Eddie Del Canto: Opportunities for Business Owners
24 June 2024
Exploring Insurance Intricacies with Eddie Del Canto: Opportunities for Business Owners

"The insurance industry has evolved significantly over the years, but it remains a complex field that requires constant learning and adaptation." - Eddie Del Canto Welcome to a brand new episode of the Cash Flow CFO Podcast. Join me on this conversation with Eddie Del Canto. Eddie started his insurance career in the late 1990s and has since made significant contributions to the commercial insurance industry. Before co-founding CompSure Insurance Solutions, he played a crucial role in the profitable growth of the workers' compensation commercial segment at Wells Fargo Insurance Services and The Hays Companies, now Brown & Brown. Mr. Del Canto holds a Bachelor of Science degree in Business Administration with a focus on service sector management from California State University, San Marcos. Outside of his career, Eddie's passions include his family, friends, music, basketball, and assisting employers in negotiating the best workers' compensation rates and services. Join us to learn the whole story! "High premiums have been a significant burden for employers, and finding ways to provide relief has always been a crucial part of my work in the insurance sector." - Eddie Del Canto The Complexity of Insurance for Business Owners Eddie Del Canto emphasizes the complexity of navigating various insurance policies, from general liability to workers' compensation. He highlights the importance of understanding these policies to avoid costly mistakes and ensure adequate coverage. Eddie’s insights provide listeners with a clear understanding of why insurance can be a daunting task for many business owners. Addressing High Premiums and Cost Management Eddie discusses the issue of high insurance premiums, a major concern for many businesses. He explains how premiums are calculated and the factors that can influence these costs. Eddie offers practical advice on how businesses can manage and potentially lower their premiums through various strategies, such as improving safety protocols and maintaining a good claims history. His expertise helps demystify the pricing structure of insurance and provides actionable tips for cost management. Workers' Compensation Challenges One of the focal points of the conversation is workers' compensation insurance, which Eddie describes as one of the most challenging aspects for business owners. He elaborates on the common pitfalls and misconceptions surrounding workers' comp and stresses the importance of proper management and documentation. Eddie shares real-life examples to illustrate the potential consequences of mismanaging workers' comp claims, emphasizing the need for vigilance and thorough understanding in this area. Tailored Insurance Solutions and Future Trends In the final segment, Eddie talks about the importance of tailored insurance solutions that meet the specific needs of individual businesses. He explains how a one-size-fits-all approach can be detrimental and why customization is key to effective coverage. Eddie also touches on future trends in the insurance industry, such as the impact of technology and emerging risks. His forward-looking perspective provides valuable insights for business owners looking to stay ahead in the ever-evolving landscape of insurance. "Every business is unique, and so are their insurance needs. It's essential to tailor insurance solutions that specifically address the risks and requirements of each individual business." -Eddie Del Canto Want to get in touch with Eddie Del Canto? Website: www.compsure.net YouTube: https://youtu.be/3Ym1U0ZRwkI Want to get in touch with Andrea Jenson? Website: https://thecashflowcfo.com/ Podcast: https://pod.co/the-cash-flow-cfo-podcast LinkedIn: https://www.linkedin.com/company/the-cash-flow-cfo/ Facebook: https://www.facebook.com/thecashflowcfo/ Instagram: https://www.instagram.com/thecashflow.cfo/ YouTube: https://www.youtube.com/channel/UC0kQopRCt9TEbgYjmqA4SMQ

36 min
Be that Expert the Public Knows: Lauren Banyar Reich Explains How Earned Media Elevates your Business
3 June 2024
Be that Expert the Public Knows: Lauren Banyar Reich Explains How Earned Media Elevates your Business

“…If you've got $50,000 to buy… a front page ad in the Sunday paper, great. Anybody with $50,000 can, you know, can pay for that ad… It doesn't necessarily set you apart in any way. And what earned media is, is it's when you're mentioned in that story, when you're in that blog, when you're on that podcast, and many cases when you're on that stage." - Lauren Banyar Reich Welcome to a brand new episode of the Cash Flow CFO Podcast. Join me for a conversation with Lauren Banyar Reich, the founder and CEO of public relations firm LBR PR. Lauren and her team excel at advancing clients’ business goals by connecting them with high-visibility media opportunities. LBR PR matches clients with media outlets seeking expert commentary, bylined articles, product features, and more. The company’s clients receive attention from prestigious publications like the Wall Street Journal, websites like Refinery29, and major metro area TV. Lauren emphasizes the outsized public credibility boost offered by these earned media appearances, when compared to paid media, AKA advertising. Join us to learn the whole story!   “…Earned media tends to also beget more earned media. Because even journalists are looking up who's the go to source.” - Lauren Banyar Reich   An Early Passion Lauren shares her journey into PR, which began with a nudge from an English teacher who saw her strengths in public speaking and writing. She studied journalism at the University of Maryland, where she fell in love with PR for its blend of storytelling and communication. Her passion for the field has kept her engaged and driven, finding endless opportunities across various industries. We discuss how these early skills set the foundation for her successful career and the launch of LBR PR.   Reach Those Who Skip Ads We talk about the evolving landscape of PR within the marketing mix. Lauren explains how earned media can amplify other marketing efforts, like content, SEO, and advertising. She states the importance of building credibility and visibility for clients, citing examples of successful campaigns that strategically targeted specific industry publications and events. This holistic approach helps businesses achieve their goals by making them more recognizable and trusted in their fields. What Money Can’t Always Buy Lauren discusses the differences between earned and paid media, explaining how each serves distinct purposes in a comprehensive marketing strategy. Earned media, achieved through credibility and expertise, can significantly lower customer acquisition costs and build long-term trust. For those looking to get their names out in the public, Lauren suggests building relationships with journalists who often need the help of expert commentators. She tells us how she’s gone about that. “They've heard you give really insightful… takeaways and concrete things that they've remembered, right? So… when they walk in that door, whatever that door is, whether it's onto your website, into your office, over the phone, whatever that looks like, even your LinkedIn profile, they're further down that path of really feeling like they know you and like you and trust you than they would have been if you came in cold.” - Lauren Banyar Reich   Want to get in touch with Lauren Banyar Reich? Website: https://www.lbrpr.com LinkedIn (Lauren): https://www.linkedin.com/in/lbrpr/ LinkedIn (LBR/PR): https://www.linkedin.com/company/lbr-pr Want to get in touch with Andrea Jenson? Website: https://thecashflowcfo.com Podcast: https://pod.co/the-cash-flow-cfo-podcast LinkedIn: https://www.linkedin.com/company/the-cash-flow-cfo Facebook: https://www.facebook.com/thecashflowcfo Instagram: https://www.instagram.com/thecashflow.cfo YouTube: https://www.youtube.com/channel/UC0kQopRCt9TEbgYjmqA4SMQ

37 min
Contract to Cash Masterclass with The Cash Flow CFO and JKA Solutions - Part 2
27 May 2024
Contract to Cash Masterclass with The Cash Flow CFO and JKA Solutions - Part 2

"I think the first thing you should be thinking about is your business doesn't sell on revenue, it sells on profit. It's going to be a multiple of your profit." - Andrea Jenson Welcome to a brand new episode of the Cash Flow CFO Podcast. Join me on this episode for the second half of a two part series in which I co-host a virtual workshop with Jean Kristensen, the CEO and chief consultant at JKA Solutions. We pick up where we left off by discussing the important topic of owner’s compensation. Many business owners either take money off the top or put themselves on salary, which can strain the business. It’s crucial to dig deeper into how compensation fits within your business model. Join us to learn the whole story! "So the passive income that I'm referring to is the individual side… you've taken the money, the profits, the client package out of the business, and now you've paid taxes on it. You've done whatever you need to do based on your business entity structure. And now on the personal side, you're looking for vehicles that are going to, you know, be putting your money to work for you without you having to actively do a lot there." - Andrea Jenson Planning for Retirement Another key point is the importance of planning for retirement. Business owners should not rely solely on selling their business for retirement funds, as 80% of businesses up for sale do not sell. It’s essential to have a strategic approach to your compensation, working with tax preparers to find the ideal mix of payroll, distributions, and dividends. Treat your business as an asset that generates passive income, moving active income activities to personal passive income activities over time. Passive Income Strategies We also explored the concept of personal passive income. This involves taking profits from the business and investing them in vehicles that generate income with minimal active involvement. Many business owners invest in real estate or high-yield investment accounts. The goal is to have multiple income streams to provide security and reduce reliance on the business alone. Compounding interest and consistent investment can lead to significant growth in personal wealth over time. Preparing for Business Sale Finally, we touched on the process of preparing to sell a business. It’s important to understand that businesses sell based on profit, not revenue. To increase the likelihood of a successful sale, business owners need to reduce risk for potential buyers by having a diverse customer base, a solid team, and clean financial records. Planning for the sale should start 3 to 5 years in advance to maximize the business's value and ensure a smooth transition. Working with a fractional CFO can help you navigate this process, ensuring your business is as profitable and attractive as possible to potential buyers. "Find a CFO that has a growth mindset. There's a lot of financial professionals that are risk averse and that doesn't necessarily need to equate to scaring you…We always say to our clients…we never tell them ‘no’. We always say, ‘sure, let me show you how we can do that’." - Andrea Jenson Want to get in touch with Jean Kristensen? Website: https://jkasolutions.com/ LinkedIn: https://www.linkedin.com/in/jeankristensenassociates Facebook:  https://www.facebook.com/JEANKRISTENSENASSOCIATE Twitter:  https://twitter.com/jeankristensen Want to get in touch with Andrea Jenson? Website: https://thecashflowcfo.com/ Podcast: https://pod.co/the-cash-flow-cfo-podcast LinkedIn: https://www.linkedin.com/company/the-cash-flow-cfo/ Facebook: https://www.facebook.com/thecashflowcfo/ Instagram: https://www.instagram.com/cashflowcfo/ YouTube: https://www.youtube.com/channel/UC0kQopRCt9TEbgYjmqA4SMQ

32 min
Contract to Cash Masterclass with The Cash Flow CFO and JKA Solutions - Part 1
20 May 2024
Contract to Cash Masterclass with The Cash Flow CFO and JKA Solutions - Part 1

"Think of your CFO as the navigator, looking ahead to ensure your business remains profitable and on track. They work alongside your bookkeeper, who handles historical data, to create forward-looking financial plans." - Andrea Jenson Welcome to a brand new episode of the Cash Flow CFO Podcast. Join me on this episode for the first half of a two part series in which I co-host a virtual workshop with Jean Kristensen, the CEO and chief consultant at JKA Solutions. We discuss the importance of being financially ready for business growth. At The Cash Flow CFO, we specialize in helping entrepreneurs manage their cash flow and navigate the financial complexities of scaling their companies. Your business is your most significant asset, and our goal is to make it financially robust enough to sell, leverage for financing, or provide for your future. We'll explore what it means to be procurement ready, especially when targeting large contracts with government agencies or corporations. Join us to learn the whole story! "Your business is your most significant asset, and our goal is to make it financially robust enough to sell, leverage for financing, or provide for your future." - Andrea Jenson Becoming Procurement Ready One of the first steps in being financially ready is having accurate, timely financial statements. This helps you understand your business's health, sales goals, and revenue. When securing large contracts with government agencies or large corporations, you need to be prepared for the associated delivery costs. Financial readiness means knowing where your business stands financially before bringing in contracts, having a plan for servicing those contracts, and ensuring you have a line of credit for slow-paying customers. This preparation demonstrates your understanding of your numbers and makes you appear more prepared to potential clients. The Role of a Fractional CFO A fractional CFO is crucial for scaling your business. They provide forward-looking financial strategies, unlike bookkeepers or tax preparers who focus on historical data. Your CFO will create an annual budget based on growth goals, prepare a staff utilization schedule, manage job costing, and maintain relationships with bankers to ensure effective use of funds. This helps in understanding your burn rate, making timely decisions, and ensuring your business has at least 90 days of operating cash. Strategic Planning and Growth Effective financial management involves setting aside profits for taxes, debt, growth investments, and owner compensation. A CFO helps you create a predictable profit model by allocating revenue into cost of goods sold, general and administrative expenses, marketing expenses, and profit. By understanding customer acquisition costs and sales funnel metrics, you can make informed decisions about scaling. With a strategic plan, entrepreneurs can confidently aim for significant growth, knowing that they have the systems in place to support their expansion and secure larger contracts with ease. "For every dollar in revenue that you bring in, it equals 100%. That 100% needs to be split up over four big buckets in your business: cost of goods sold, general and administrative expenses, marketing expenses, and profit. The profit needs to cover your operating expenses, any existing debt, income taxes, and reinvestment back into the business. This ensures that your business remains financially healthy and can support growth." - Andrea Jenson Want to get in touch with Jean Kristensen? Website: https://jkasolutions.com/ LinkedIn: https://www.linkedin.com/in/jeankristensenassociates Twitter: https://twitter.com/jeankristensen Want to get in touch with Andrea Jenson? Website: https://thecashflowcfo.com/ LinkedIn: https://www.linkedin.com/company/the-cash-flow-cfo/ Facebook: https://www.facebook.com/thecashflowcfo/ Instagram: https://www.instagram.com/cashflowcfo/

28 min
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