Posted on: 28 May 2020
Many small businesses are driven by great ideas and concepts. However, many small businesses need someone on their staff who can help them make smart, data-driven financial decisions that will help their small business succeed. When it comes to running a small business, paying for a CFO advisory service is a great way to ensure the long-term financial success of your business.
Way #1: Cash Management
As a small business, it is vitally important for you to manage your cash flow correctly. You need to always have enough cash on hand so you can pay your employees and vendors and also cover business expenses.
A CFO advisor service can work with you to help you understand not just the amount of cash you have in the bank, but the rate at which you use that cash, as well as how long your current cash reserves will last.
Knowing the rate you are spending your cash, and how long your cash reserves will last, will allow you to make smart decisions regarding what you should be spending money on, and what you can do to grow your cash reserve so you can sustain your business if your revenue changes.
Way #2: Cash Flow Projections
Next, as a small business, knowing how much cash you will have on hand at any point in time doesn't have to be a guessing game. A CFO advisory service can analyze your sales records for the length of your business and can project your cash flow into the future.
They can use data to determine what months you have the highest cash flow and the lowest cash flow, so you can plan accordingly for the highs and lows of running your business and establish a cash flow plan that allows you to always have the cash you need.
Way #3: Profit Planning
Profit planning is a little different than your cash flow. With profit planning, you can examine and figure out what products and services you sell really bring in a profit.
For example, if you sell a subscription service, a CFO advisory service can analyze the marketing, development, and labor that goes into a subscription, as well as the average length of a subscription, in order to let you see how profitable each subscription you sign-up is.
You can then use this information to make businesses choices to adjust your expenses and increase your profits.
With profit planning, you can see the real cost that goes into each product or service you sell, and what return you are making on each product or service. This can help you make smarter decisions that will allow your business to turn a profit.
As a small business owner, you don't have to be an expert in all areas of business. If you are not a financial expert, just hire a small-business deltek CFO advisory service to provide greater insight and analysis into the running of your business. This will help you ensure that your great idea turns into a long-term profitable business.Share