CFO Hacks: How CFOs are Integral to Helping Small Business be Successful

Since I started my CFO Services Firm, it seems like small businesses have had to endure challenges like never before. But, in some cases, it has led to new and exciting opportunities.

How do small businesses navigate this environment?

I believe that small businesses need a CFO to help them prepare for what happens. So here are some ways we assist in the crazy time.

1. Government Cash

The Paycheck Protection Program (PPP), Economic Injury Disaster Relief (EIDL), Employee Retention Tax Credit (ERTC) provide much-needed cash to small businesses. Some of this is still available. So how do you know if you qualify without some help?

Nobody seems to be talking about what happens to businesses when the free money ends or runs out. Many companies took one or two rounds of PPP and also are taking ERTC in 2021. We have helped clients get this. However, if these businesses don’t have a sound financial plan, they will struggle when the safety net is gone. The cash is good, but it can be deceiving.

2. Inflation

 We are seeing the highest inflation in decades. I have read articles indicating that inflation in 2021 could be 5-10% by the end of the year based on how much cash the US government is supplying. Of course, there are differing opinions on this, but the more the government spends and the more we provide free money to individuals and businesses, it will lead to inflation.

How can your business stay ahead of pricing, expenses, and margins, so you are ahead of the curve and not looking back to losses?

3. Remote Work

Businesses have had to innovate with remote work and paperless procedures. Meetings are taking place on Zoom, which makes an old conference call seem obsolete. Since 2016, Bender CFO Services has been paperless and supported a remote environment. COVID and stay-at-home orders didn’t affect businesses that were prepared for this kind of work. We read about businesses forcing employees back into the office. Zoom, remote work, and paperless technology are here to stay, and we must embrace them.

4. Quick Changes in the Economy

How does a business plan for economic recessions and significant growth in a small amount of time? For example, the US recession in 2020 last only two months, and it was a sharp recession followed by high growth.

What is the best method to manage expenses, hiring, and revenue planning during such a whiplash economic event?

5. Employee Challenges

 We have seen the need to hold onto employees to get government money back in 2020. We recently are seeing employees switching jobs at the highest pace in many years. It is causing businesses to struggle to find quality workers. Can you afford to pay more and provide other benefits to attract and retain workers? What do you do?

6. Expense Management

Do you know your Gross Margin and Operating Margins? Are they getting strained due to higher costs, higher wages, and cash flow challenges? Have you reviewed software, insurance, or credit card fees recently? Do you need expensive office rent? Do you have advertising that is not working? How do you make decisions using your finances as a guide?

Conclusion

What are you going to do to navigate this ever-changing landscape? Do you have a CFO that is helping you? Have you received all the free cash available? Do you understand your gross margin and operating margin? Are inflation, employee challenges, and expense creep affecting you? Do you know your cash and profits are trending this year and next? We can help with all this, so schedule a call to discuss further.

 

Shane Bender

My experience as an Auditor, Controller, Director of Financial Planning & Analysis, and VP of Finance in small, medium, and large businesses over the last 15+ years has given me a unique level of knowledge between accounting and finance. My focus is helping small-to-medium-sized organizations grow by providing them with key information, creating scalable processes, and implementing solutions that will help them grow to the next level.​