Three Key Financial Pillars Every Business Must Know!

BY DORIS YIP

Growing a business is a lot like growing a tree. It starts with an idea like a seed, and it needs good soil (business foundation), sun (right environment), water (cash flow) and ongoing care (customer service, team support) to nurture the growth of the tree (i e , Business) Trees release oxygen when they use energy from sunlight to make glucose from carbon dioxide and water. Business also releases oxygen, and it drives economic growth and creates jobs. Lastly, pruning your trees regularly keeps them strong and healthy Similarly in business, we are pruning to evaluate the different parts of business to ensure they are operating efficiently and effectively

As a Visionary Fractional CFO, I am incredibly proud to help six to seven figure business owners turn their visions into their financial reality by amplifying their income and impacts through critical business and financial strategy

Being a small business owner is really a gift.

Building a strong business foundation is essential to create sustainable profitable business. As a seasoned CFO with over 20 years of corporate experience in leading financial planning and strategic pricing teams in many billion-dollar Fortune 500 companies, one of the common themes is every company leaves money on the table regardless of size and industry

COMMON QUESTIONS ARE “WHERE SHOULD I INVEST IN MY BUSINESS TO GET THE MOST RETURN?” OR “WHERE DOES MY MONEY GO?”

To answer these questions, there are three key financial success pillars all businesses must know. First, knowing your customers is to have real data to understand customer insights – market segmentation (demographic, geographic and psychographic), how we target, attract, capture, and convert leads into customers, purchasing patterns, average revenue per client, marketing and content that converts to clients, where the source of your customer traffic, customer tenure especially for membership businesses Some common client concerns are how much they should spend in marketing to their customers?How much should they spend on customer retention vs. customer acquisitions? As a result, we work with our clients to create a weekly tracking customer insights system, so they can make timely decisions, and their customers will become loyal fans because they are offering products and services, they want based on real data insights, not what they think or feel.

Once you have a solid customer tracking system, you have to make sure the business is making a profit, not just making sales and revenue. Knowing your numbers is the second financial success pillar.

Do you know business is defined as organized for profit?

However, many businesses fail due to lack of cash flow and profit to sustain the business

To avoid cash and profit leaks, we help our clients audit their expenses to understand potential leakage and make sure expenses are not growing faster than revenue. To ensure everyone in the business is working on profit generating activities, we first have to define the most critical number in the business that moves the needle. This critical number must be understood by everyone, tracked weekly and reported often You are what you measure and therefore have a peace of mind financial tracking system, so you have timely weekly and monthly reports to gauge the financial health of your business and make timely decisions

Keep in mind money does not have a brain and it is meant to be managed. We are the brain behind it, and it has been a game changer for my clients to create a predictable profit plan to direct the resources to maximize the return on investments Pricing is another key lever to increase profits; however, I have seen most business owners try to cut costs first before raising prices. Lastly, most people overestimate how much they can accomplish in a year and having an annual budget is not sufficient to grow your business. We help clients create a three-year strategic plan to ensure they have the runway to invest and operationalize their visions into financial reality

The last pillar is knowing your people. People are your most valuable assets Attracting talent to your business is only the first step. Continuing to motivate and grow your team to support the missions and visions of your business to drive profits are the most important role as the CEO

Learning what it takes to effectively manage, not micromanage, your team and hold them accountable is a critical skill As your company grows, your business will become more complex and that is when we see more silos. You will quickly find some of your people might not have the skills to grow with your company Many businesses lack the ability to invest in their team of continuous learning. Ongoing assessment of your team will help ensure you have the right talent at the right job Communication is not only a one-way direction and having an open-door policy and creating a high-performance culture builds trust and reduces attrition. Keep in mind people quit because of their managers and hiring the right people to grow with your business will pay dividends to your business long term. Attrition is costly to your business, and it impacts your team, bottom line, and your clients We help clients establish a clear performance guideline and customize a pay for performance compensation plan for their business to help motivate, grow, and retain talents Operation and Financial management are the foundation of your business to avoid leaving money on the table. Creating a data driven company to gain customer insights, employee performance and follow the money will propel you to create a sustainable profitable business.Bringing more money in without learning the financial strategy how best to spend, save and give, it will not change the financial situation It does not help you spend, save, and give. To learn how you can amplify your cash income and impacts and avoid leaving money on the table by leveraging our billion-dollar financial strategies, email us at support@visionarycfo.com or visit us at www visionarycfo com

About Doris

Doris is the founder of Finances GPS LLC, a boutique consulting firm offering fractional COO and CFO services She is a Visionary Fractional CFO who has managed billiondollar businesses and multiple Fortune 500 companies. Spending her free time taking photos, meandering through botanical gardens, and mentoring young professionals in Kansas City, she now helps six and seven figured business owners turn their visions into their financial reality by amplifying their income and impacts through critical business and financial strategy She is an operation and visionary leader where she has a unique talent to operationalize company’s finances so they can grow sustainably. She is a natural relationship builder, love to lead, facilitate and connect. She has a master’s degree in Business and Finance, Bachelor’s degree in Accounting and a Certified Pricing Professional Her diverse experience in multiple industries and business models position her to provide a holistic business solution In her tenure, she has helped companies raise several hundred million in profits.

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