Today we’re going to wrap up the third part of our Chief Financial Officer series explaining when you’re wearing that CFO hat in your business, what does that role actually do?
In previous videos
- we talked about making sure you’re profitable on a per job basis,
- then we focused on managing the funds that you currently have available so that you’re prepared.
In today’s video we will discuss preparing for and predicting the future in your business.
Predicting The Financial Future In Your Business
And yes I’m aware CFOs tend to not be psychics, they are just people.
So in your business you’re not going to ACTUALLY know the future, you’re going to make predictions.
And one of the best ways to do this is to look at your past results.
For example, if you’re looking in every summer, you have a slow down time as school starts back up again, or around the holidays, or in the winter, then you can be prepared for that and know, “Oh here comes February, I should expect my business to be slower, so I need to manage my funds appropriately now so I’m ready for that time to come later.”
Knowing if I skip that step, I will be stressed out later, or surprised later, or wondering what mistake I’m making right now.
So we’re using this ongoing data to look at what trends to expect.
This also goes into thinking about
- launching a new product line
- adjusting your pricing
- what you expect to happen money wise in your business
- etc
so you can make the correct predictions of what you think will happen in the future.
Being exactly accurate here is totally impossible.
The goal is to have a beginning framework.
As you get closer to it then it can deviate a few degrees this way or that, you’re in the right ballpark at least, and that gets you started in the right path.
Preparing Your Business For The Best Future
Another part of the future planning is being mindful of what is this business going to do for YOU down the road.
- Is this a business you’re looking to sell to someone else possibly?
- Maybe have a person buy it out from within your organization?
- Does it need just to maximize the capital going to you in on an ongoing basis?
- or putting money to your own personal retirement.
Thinking about the future exit strategies is also part of this strategy.
These are all part of the CFO type duties of the business, of not just making sure things are okay now, but looking forward to the future so you can be more strategic and know when it’s time to escalate your efforts, and when you’re okay sort of coasting and being efficient.
That’s the final duty.
If you’re not doing that in your business, probably no one is, so the CFO hat is a key hat to wear to make sure all these things are going great.
Let me know any questions.
Have a great day.
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