Optimize the Business for Profitability - Scott Geller

Scott Geller of Capitis Advisors, LLC - “The CFO Perspective”

INTRODUCTION
I have 20 years of experience in the finance realm that started with the Federal Reserve Bank as a bank examiner, moved on to 7 years at a Fortune 300 insurance company, and then a 50-70 person spin-off technology firm under the Allianz umbrella of companies. I was with the spin-off from day zero all the way until the unfortunate end and I had to close down the business.

I am now a financial consultant serving primarily as a fractional or part time CFO for companies that range from start ups to young and scaling to established with stable growth. I take over from the accountant as a lean cost effective option for Profits Engineering, Cash Optimization, Strategic Acceleration and Executive Partnering committed to your success. Please contact me at scott.geller@capitisadvisors.com.

PROBLEM STATEMENT/SHOW OBJECTIVE
Business leaders have a tendency to review the income statement at face value to gauge the profitability of the business. I see multiple times where the income statement might have the titles, generic structure, and maybe even calculating margin ratios; however, the statement doesn't reflect the true profitability and maybe even misleading management.  By the end of our time together you will understand how to find the profitability, build right tools, and identify ways to create additional profitability.

What You Need to Know

1. Profitability of the Business
2. Net Income vs Profitability
3. Start with your services and products
4. Leverage last week's show
   1. Succeeded in getting organized ... list of existing and new
   2. Determining performance
   3. Thinking about the categories
      1. Problem Child
      2. Star
      3. Cash Cow
      4. Dog
   4. Where Products and services are in the matrix with the 4 tests
      1. Growth rate vs industry and competitor
      2. Customers Budget
      3. Profits
      4. Why is the customer buying ... not just are they
5. Determine driving factors of your profitability
   1. Pricing
   2. Volume
   3. Efficiency
   4. Unique offering in market
   5. Other
6. Calculate your profitability throughout the business
   1. Gross Margin
   2. Operating Expenses
   3. G&A Expenses
   4. Operating Margin
   5. Incorporate accountant and CFO for inputs and structure

WHAT YOU NEED TO DO

1. What quality issues may have been identified during the feedback phase
2. Listening to stakeholders - Leadership, Employees, Clients, ex-clients, Prospect Feedback, Industry Publications, Market Studies
3. What process improvements can we implement immediately
   1. Key processes
   2. Highest impact process - volume, profitability, potential
4. How can we deliver our product/service to the customer as quickly as possible.
   1. Time is money
   2. Speed to market
5. Did we identify changes in people and technology to make us more efficient. 
   1. Right people in right positions
   2. Innovation can drive and should create profitability
6. Document processes and constantly revisit
   1. Similar to the Agile discussion - Work ... review ... work ... review
7. Try to automate as much as possible
   1. Innovation across the company
   2. Exists in people's head to "paper"
   3. Excel to systems
   4. Systems to software
   5. Build vs Buy
8. Make personnel changes.  Take care with hiring processes as bad hires are very expensive to your company.
   1. Have you grown beyond some individual's skills? Ask twice to capture value before taking action
   2. Right people in the right positions?
   3. Missing skill sets
   4. Full assessment with an expert
9. Start with quick fixes
10. Start with less expensive fixes
11. Calculate profitability of your changes
    1. Estimate of expected results
    2. Calculate results when possible
    3. Compare and contrast
12. Know your numbers – Financial planning and Cash Flow management
13. Think in terms of the business when making decisions
    1. Profits in short term vs. long term value
    2. Cutting people, processes, expenses, etc can lead to lost business
    3. Fusion - cut costs within the infrax but at cost of meeting SLAs for clients

PREVIOUS SHOW: 2020_11_23 - Focus on Product & Service Offer
NEXT SHOW: 2020_12_07 2PM EST - Finding Efficiencies in Revenue ​
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