Season 4 Overview - Scott Geller

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

Season Overview
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
Wrapping up the 13 episode season with a recap of the key principles I've discussed and shared during the shows.

WHAT YOU NEED TO KNOW

1. Organize your business
   1. Dashboards for direction and communication
   2. Financials (IS, BS), cash flow, and other tools
   3. Due Diligence
2. Revenue - sales process, pricing, and finding efficiencies
3. Profitability - Knowing your products and services, innovation, factors driving profitability, and untapped sources
4. Retained Earnings - Internal, external, owner investment
5. Selling the Business - emotional so bring in support, valuation, and the process

WHAT YOU NEED TO DO

1. Organizing the business
   1. Dashboards for organization 10/12/2020
      1. You hired these people for a reason, so trust them while using the dashboards and trackers 
      2. Setting Targets: for each element of your Balanced Scorecard, what is the Intention and the Results Measures for Goals,, the Intention and Process Measures for Objectives?
      3. Setting Target Values: for each Goal what does the final result look like and how will be measured?
      4. Setting Intermediate Targets for each Objective - what is the acceptable success level for this period and how will it be measured
   2. Financials and cash flow of company
      1. Determine driving factors of your profitability
      2. Cash Flow on 10/26/2020
         1. As a Business Owner I need to buy into understanding the importance and need for your cash flow within the business.
         2. What are the starting points and what do you need to know first ...
         3. Money In / Cash Received
         4. Money Out / Cash Paid Out
         5. How do I aggregate or find these items
      3. Due Diligence of company in multiple shows
         1. Corporate documents
         2. Legal documents or issues
         3. Marketing and sales materials
         4. Tax documentation
         5. Financial statements, tools, and trackers
         6. Client, vendor, and key personnel contracts
         7. More and more
   3. Revenue 12/7/2020
      1. 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
      2. Knowing your Sales Pipeline
         1. Lead Qualification
         2. Lead Nurturing
         3. Total Lead Time
         4. Filling the Pipeline and impacting the flow
         5. Power of Retention and Churn
         6. Marketing Discipline and Plan
      3. Pricing
         1. Cost Plus Pricing
         2. Competitor Based Pricing
         3. Value Based Pricing
   4. Profitability - Products and services on 11/23/2020 and more detail in 11/30/2020
      1. Knowing what you are selling and ever did sell
         1. Perform an audit
         2. All products and/or Services
      2. Determine level of and rationale for Offer Performance
      3. Identify candidates for termination, replacement, upgrade, grave robber, and/or new
      4. Goal
         1. Assess profitability
         2. Industry growth
         3. Market share
      5. 4 Types of product and services offer
         1. Problem Child: High Industry Growth & Low Market Share needs to be closely monitored for marketing efforts;
         2. Star: High Industry Growth & High Market Share now and in the near future;
         3. Cash Cow: Low Industry Growth & High Market Share shows long term preference and loyal buyers;
         4. Dog: Low Industry Growth & Low Market Share means low customer preference and a candidate for upgrade or terminate.
         5. Determine where each of your products and services are in the matrix.
         6. Is the next move a hold, update, or removal?
      6. Determine driving factors of your profitability
         1. Pricing
         2. Volume
         3. Efficiency
         4. Unique offering in market
         5. Other
      7. Finding untapped sources of profitability
      8. What quality issues may have been identified during the feedback phase
      9. Listening to stakeholders - Leadership, Employees, Clients, ex-clients, Prospect Feedback, Industry Publications, Market Studies
      10. What process improvements can we implement immediately
      11. How can we deliver our product/service to the customer as quickly as possible.
      12. Did we identify changes in people and technology to make us more efficient. 
      13. Try to automate as much as possible
      14. Process
          1. Start with quick fixes
          2. Start with less expensive fixes
          3. Calculate profitability of your changes
   5. Making decisions and act decisions keeping perspective
2. Retained Earnings on 12/14/2020
   1. Keep it for a rainy day - Retained earnings to reserves
   2. Reinvest in the company - growth, reinvention and innovation, people, Strategy for Reinventing the Business
      1. Excellent rate of return compared to bank financial instruments
   3. Invest in yourself - Paid yourself to date and is your salary comparable to other owners?
   4. Invest outside of your company - Competitors, similar companies, New market, capabilities, sales channel, other
      1. Know your reason and what you are getting ... what is the strategic rationale?
   5. Slicing the Pie
3. Business for sale on 12/21/2020
   1. Valuation
      1. The self valuation CFO
      2. Business Broker
      3. 2 Reasons for a professional
         1. Experience
         2. Independent third-party appraisal
   2. Strategic planning to develop a business transition plan
   3. NDA, Due Diligence, offering Memorandum, and Business Checklist
   4. Identify potential buyers through relationships, marketing, national databases of qualified buyers
   5. Offering memorandum
   6. Negotiation of the transaction
   7. Deal structuring
      1. Credit needs of the buyers
      2. Payment plans - down payments; earn-out; straight purchase
      3. Seller's continued role

PREVIOUS SHOW: 2020_12_21 - Business for Sale
NEXT SHOW: 2021 1Q Season  

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