What interested me was that it’s almost the exact same thought processes that lead me to put a profitable consulting business on the back burner and create CFO Genie. While Kevin’s focus is primarily on the how-to’s of start-up, I saw a definitive need among small and mid-sized businesses that made it past the start-up challenges, yet faced the real potential of failure as they grew. There’s no doubt that these business owners knew their industry; what they sorely needed now was the financial intelligence to drive their companies forward. And, experience demonstrated that the only way to garner the necessary intelligence was through continuously measuring business performance, or more commonly called financial analysis. Yet, the one thing they lacked was the ability or resources to do so. What they needed was an analysis tool that could be used with very little effort and provided reports that could be understood even by someone with no formal financial training.

It’s the ability to measure business performance that opens the right door for discovering why a company didn’t earn the profits it should have; shows how much profit should have been made, and provides the “big picture” data that enables business owners to take control and make informed business decisions.

As a business owner, even if numbers aren’t your strength, you still need to understand what they mean in order to operate your business. Without this analysis you might very well proceed never knowing where, or even that, your company is leaking tremendous amounts of cash. Consider the following: on average, small to mid-sized companies often fail to capture between 10 to 30% of their revenues as profit. The math is simple; say a company does $1,000,000 in sales with a profit of 10 percent or $100,000.  Add 15% of the sales to the profit and you have $250,000. Without making one additional sale, the company has increased its profit line 250 percent by knowing where to look for the cash leakage and then taking corrective action.

Business owners who understand these metrics have a tremendous advantage over those who do not.

Whether you’re a start-up or a small to mid-sized business there are pit-falls that can suck you down into failure, and most of those black holes, in one way or another, can be traced back to money issues. Understand your financials and you increase your chances for success.

For start-up advice contact kevin@survivebusiness.com and listen to Business Genies on KBZNZ (www.kbznz.com) To learn more about the financial analysis software CFO Genie visit www.ceo1stop.com.

Max Gregorich

CEO, CEO1Stop

www.ceo1stop.com

www.cfogenie.com

Two recent blog posts by my guest (http://TheLeanWayConsulting.blogspot.com) make excellent points. One post quotes The Lean Benchmark Report (2006) by the Aberdeen Group: “42% [of survey respondents] say ‘Top Management Commitment is #1 Challenge [to a Lean implementation].  Another asked, “How do you influence an organization to start Lean in some shape or form outside of manufacturing?” First, top management commitment is the only way Lean will succeed, which brings us to the second: responses to Ankit’s question about Lean in a non-manufacturing environment. Responses to his posed question seemed to focus on ROI and not “selling” Lean to management as Lean, but as “solving their own problems and controlling their own destiny.”  The two are directly related. I would add, however, – solving their own problems, controlling their own destiny and controlling COSTS, which can be accomplished by management having the data that comes from consistently measuring business performance.

The problem arises when management doesn’t have the time or the tools, or in many cases with small businesses, the resources to engage a CFO, to measure and analyze their company’s business performance. Fortunately there are affordable business performance software packages, like CFO Genie, that are written for the non-financial professional that enable CEOs to understand their financials and give them the information they need to make operational changes.

Look for software that:

• Within a few hours, from start to finish, indicates specific areas where the company is losing money and where corrections need to be made.
• Encourages scheduling a demo prior to purchasing.
• Provides a built-in tutorial.
• Produces easy to read and understandable components among which are: current and optimized income statements; labor efficiency; break-even analysis; bankruptcy potential (Z-Score); ROI by line item; all major indicators and business potential.
• Is simplistic enough to use habitually so that it becomes a tool for continuous improvement.
• Does not need a financial professional to interpret the data.

Listen to KBZNZ Business Genies’ guest Ankit Patel on Friday, February 5 at 12 noon and midnight (PST); 3 p.m. (EST).

Max Gregorich, www.ceo1stop.com

]]> http://ceo1stop.com/blog/?feed=rss2&p=85 0 http://ceo1stop.com/blog/?p=78 http://ceo1stop.com/blog/?p=78#comments Wed, 27 Jan 2010 06:24:58 +0000 max http://ceo1stop.com/blog/?p=78 I’ve owned my share of small and mid-sized businesses throughout my career and if there is one thing I know for sure…..it’s what keeps a business owner up at night. Cash…how much is coming in and how much is going out.

I can honestly say that every company I founded and operated was successful. I will admit that at first they succeeded in spite of myself.  And, like many business owners my mantra was sell…sell…sell.

What I know today, however, is the most important thing a business owner can do is consistently measure their company’s performance – it’s called financial analysis. Don’t let your eyes glaze over at the mention of financial analysis, it’s easier than you think. You can read more in an article I authored for the January, 2010 Nevada Business Journal at http://www.nbj.com/issue/0110/9/2167 or check out CFO Genie at www.ceo1stop.com

Here are some article highlights:

• Many small and mid-sized business owners believe that their accountant, or accounting software tells them everything they need to know about their financials. Not true. Accounting tells how much profit was made. What a business owner really needs to know is how much profit they should have made.
• Even if numbers aren’t a strength, a business owner will still need to understand what they mean in order to operate a business. Without this analysis an owner might very well proceed never knowing where, or even that, the company is leaking tremendous amounts of cash. Consider the following: on average, small to mid-sized companies often fail to capture between 10 to 30% of their revenues as profit. The math is simple; say a company does $1,000,000 in sales with a profit of 10 percent or $100,000.  Add 15% of the sales to the profit and you have $250,000. Without making one additional sale, the company has increased its profit line 250 percent by knowing where to look for the cash leakage and then taking corrective action.
• The perception is that financial analysis is a “foreign” language that can only be deciphered by a trained financial expert. In fact, financial analysis can be translated into easy-to-understand “English.”  When this is done, any business owner can immediately identify areas in which their company is experiencing minor to serious financial distress which causes hard earned revenues to escape before reaching the bottom line profits. Demystifying the language of financial statements and not depending on others to interpret numbers is the key to taking control.

Fortunately there are affordable business performance software packages that are written for the non-financial professional.

Check out CFO Genie.

Max Gregorich, CEO1Stop

Tom is an entrepreneur and consultant who gained his business and manufacturing expertise over 30 years in positions ranging from shop floor to senior management in companies of various sizes and industry segments throughout the US and Canada.

With his unique perspective and practical, hands-on approach, Tom has helped companies from small, closely held businesses to Fortune 500 multi-nationals increase their competitiveness and profitability. He has successfully managed a broad variety of engagements including business start-ups, marketing, capitalization, lean transitions and process improvement, supply chain initiatives, quality systems, turn-around and workout situations, facility expansions and relocations and new product introductions.

Tom has founded and operated several successful businesses including a manufacturing consulting company, a factory automation business, and a non-profit business that acquired old manufacturing facilities and put them to new use. He also was one of the founding members of Connecticut’s ConnStep program, a NIST Manufacturing Extension Partnership (MEP) center that provided mentoring and technical assistance to small and mid-sized manufacturers.

Max Gregorich, CEO, CEO1Stop/CFO Genie

About Business Genies: Business Genies features business and industry leaders and national consultants who explore how they achieved success, overcame adversity and created opportunities while sharing proven and practical tips on best practices for managing small and mid-sized businesses.

Lean is a process that I personally believe every company in America should be implementing.  When done correctly, it can result in ultimately saving American jobs from being outsourced. With that said, the only reason for any business to invest time and effort into Lean is to gain real, measurable results. However, while Lean can work for any company, many struggle to implement it and ultimately fail in the attempt. The fault lies not in the Lean process, but in the implementation.  Lack of success usually can be attributed to not clearly defining the purpose for going Lean, not stipulating processes and not fully engaging employees.  But, when fully committed to by management and employees alike; when it becomes a natural part of both the operational side as well as the corporate culture, and when implemented  properly, Lean can result in improving the way work is performed at every level of the company.

As president of VIBCO Vibrators, Karl Wadensten exemplifies today’s successful business owner and staunch Lean advocate.  VIBCO manufactures a full range of vibrators for industrial and construction use to aid material flow and for concrete consolidation. Under Karl’s leadership, VIBCO has undergone a remarkable transformation.  The most profound aspect of the transformation is a revolutionary change in VIBCO’s organizational culture.  At VIBCO, Lean is not something that individual employees “do”, it is how the entire organization “lives and breathes”.  VIBCO’s True North is Same Day – Next Day, Quality, Throughput, Innovation and 100% Employee Engagement.  It is because of the commitment of its entire workforce that VIBCO has achieved stunning operational gains including:

Setup time on CNC equipment reduced from 2.5 hours to 8 minutes

On time delivery is now 99% same day, next day shipping

Quality improved by 80%

Productivity increase in selected work cells as much as 300%

Inventory reduced by 40% (over $1,000,000) over 2 years

Work in Progress (WIP) inventory turning 88 times per year

Be sure to listen to my interview with Karl on KBZNZ on Wednesday, January 20 at 2 p.m. (PST); 5 p.m. (EST) and Thursday at 10 a.m. (PST); 1 p.m. (EST).

Max Gregorich

CEO, CEO1Stop

CFO Genie

Often misunderstood, employee training and education, in the context of organizational development, does not have to mean spending thousands of dollars to send your workforce off to day-long programs.

To discuss how small and mid-sized businesses can design and implement employee programs that positively affect profitability, I am honored to welcome as my guest on KBZNZ’s Business Genies, Cheryl Ann Seminara on Friday November 13, 2009 at 11 a.m. and 11 p.m. (EST). Dr. Seminara currently serves the Director for the U.S. Department of Homeland Security’s Homeland Security Academy and for the Center for Academic and Agency Outreach. She also leads her own business consulting firm specializing in strategic planning, organizational development, training and education. In her own words, Dr. Seminara is a person who “likes a challenge.” In her role with DHS, she coordinates seven Master’s degree programs for DHS employees, co-leads Efficiency Review efforts on behalf of the DHS Chief Human Capital Officer, and manages strategic partnerships between DHS and academic institutions.

At the helm of her business consulting firm, she focuses her efforts on assisting small and mid-sized businesses enhance efficiency. She plans to introduce a women’s professional development studies program, and small business planning courses that will utilize a blended learning approach.

Prior to working at DHS, Dr. Seminara worked with the Yucca Mountain Project, where she was the Training Lead for the Lead Laboratory for Repository System. She designed, developed, and implemented training and organizational initiatives. Among her accomplishments there, she gained subject matter expertise in training in the nuclear industry after leading a surveillance of all training for the Yucca Mountain Project.

Max Gregorich

www.ceo1stop.com

www.cfogenie.com

www.kbznz.com

Max Gregorich is CEO of CEO1Stop, is the author of Understanding Your Financials for the Small Business Owner, and creator of CFO Genie, an affordable, easy-to-use performance software tool for small and mid-size businesses. Created specifically for the financial lay person, CFO Genie produces easy to understand reports that clearly identify where your company is leaking cash and not reaching your bottom line while showing you the obvious implications of ignoring those financial “leaks.” To learn more about CFO Genie or to download a free copy of our e-book: Understanding Your Financials visit www.ceo1stop.com.

“I wanted to bring the topic of quality and organizational effectiveness to Business Genies’ audience because measuring activities is the only way that a business owner can realize how effective the operations are. Remember: If you can’t measure it, it doesn’t count. If you can measure it – it can be made better.

According to Russo, “Frequently organizations have unknowingly or knowingly set up a situation where people and departments work in “functional silos”. In these silos, people can be working hard but are at cross purposes which sub-optimizes the organization’s effectiveness & productivity at best — and at worst makes the organization dysfunctional and prone to failure. Departments end up competing against each other internally as opposed to focusing on outside competition. The IA model is designed to create an environment that focuses the energies of all individuals and departments on what is needed to be competitive in the marketplace. So regardless of whether they are a “C” level manager or an employee on the front lines, they know exactly how and what they do impacts both the top line and bottom line of the organization in a synergistic way.”

Max Gregorich

CEO1Stop

CFO Genie

Tune in this Friday July 17, 2009 for the premier of my new radio show Business Genies at 8 a.m. and 8 p.m. (PST) on the internet’s first All Business, Only Business talk station KBZNZ – Radio Business Journal (www.kbznz.com). As a consultant specializing in small and mid-size businesses, I’ve discovered that business owners often lack practical, down-to-earth advice and tools that they can put into action. With the goal in mind to give business owners what they need, but often can’t find, I developed Business Genies as a companion piece to my emerging CEO1Stop.com website and CFO Genie. The radio show features business and industry leaders and national consultants who share proven and practical tips on best practices for managing small and mid-size businesses framed with just a touch of humor. Friday’s show welcomes Gary Connor, principle of Lean Manufacturing Training. As a nationally respected consultant Gary is the author of five books and has trained 10,000’s of people across the US and Canada. Throughout his career, he has worked with such organizations as NIKE, Delux, Lockheed Martin as well as hundreds more. He brings to the table an in-depth knowledge of lean manufacturing and provides insights into its applications across many industries. Business Genies, which airs every Friday, joins an impressive array of syndicated and original programming. KBZNZ, which launched in early July, focuses on bringing shows to its audience that explore and examine the business side of a cross-section of industries. Visit www.kbznz.com or link to my show through www.ceo1stop.com.

Max Gregorich

CEO, CEO1Stop/CFO Genie