The Business Brief
August 2019
The Automated Chief Financial Officer
The Profit Beacon
The stark reality is that very few business owners had any financial management experience before they started their companies. Maybe they had a certain skill set and thought it would be better to work for themselves than to help someone else deliver that same product or service. Or maybe they had a good idea they could develop and sell to customers who were hungry for a solution to a particular problem. Either way, they are basically technicians and not finance-oriented. In fact, they usually loathe the numbers. However, without an ability to plan with some level of financial accuracy, business owners are at risk of making a fatal decision at any moment, and they may not know it until it’s too late to do much about it. That’s why the failure rate for small companies is so high: 30% fail in their first 24 months, 50% within five years, and 67% in 10 years! And more specifically, 82% of business failures are due to poor cash management. Fortunately, operational performance and cash management can be improved significantly with the right tools and a little discipline. A mistake most business owners make is assuming their internal staff or outside CPAs will warn them of a financial problem in advance. Don’t fall into this trap. Most small-business CPAs and accountants are largely focused on compliance-related activities, such as accounting services, payroll services and tax payments, and tax planning or filing returns. They are not focused on the operational functions in the business, and they rarely look at the financials in that way.
The Profit Beacon™ is the solution. It’s an automated chief financial officer that gives the business owner (and their staff) the clarity they need to make
better decisions much faster. It’s easy to use and very affordable. Users have been able to create a new account, set up a new company, load data from QuickBooks®, and generate very sophisticated two-year monthly P&L and weekly cash flow forecasts in just eight minutes!
and have the ability to identify the actions required to manage those problems? It’s invaluable. The Profit Beacon™ provides that predictive capability in easy-to-read reports and dashboards. Just think about what it would take to manage a manual process for creating the reports and charts for various operating options. You need to determine the right decision(s) to make. Believe me, creating an efficient process to do this is an undertaking. The Profit Beacon™ is the tool that provides the visibility to ensure the best possible outcomes in a fraction of the time. You can try it out at no cost to you. Just visit TheProfitBeacon.com.
The live support onboarding process gets you up and running in less than an hour with a thorough knowledge of the navigational and functional features of the software. You will then be in a position to manage the various aspects of your company’s operations in a more targeted and effective way. You’ll actually “see” what’s coming. You can answer just a few questions about your company’s current operations and any changes you expect at different points in time and quickly create multiple forecasts depicting the outcomes for various decision paths. By comparing the results, you will be clear about your targets and the ultimate results of any action or strategy before you invest the time or money to execute.
–Fred Parrish, Founder & CEO
The Profit Experts www.theprofitbeacon.com
How comforting would it be to predict when you will have cash flow problems
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On May 15, 2019, more than 1 million students around the world skipped school to call attention to climate change. The effort included over 2,000 protests aimed at legislators in 25 countries, which is no small feat for a bunch of middle and high school students. For businesses, movements like these should be red flags because today’s students are tomorrow’s consumers and employees. Luckily, there are plenty of simple moves you can make to lower your business’s environmental impact. Just be sure to avoid “greenwashing” — a term for marketing initiatives that make companies look environmentally friendly, even when they’re making no effort. Here are some tips to better our planet and help your business attract today’s climate- conscious youth. GO PAPERLESS According to the EPA, the average office worker uses 10,000 pieces of paper per year. Multiply that by everyone in your company, and you have a whole forest in your building waiting to be saved. With advances in technology that provide replacements for products like punch cards and spreadsheets, why not ditch internal paper altogether? INVEST IN A DISHWASHER After China announced in 2018 that it would no longer accept the majority of U.S. plastics for recycling, single-use plastics like cling wrap, water cooler cups, and plasticware became impossible to recycle in most cities. As a result, more than 6 million tons of those plastics end up in local landfills and the oceans each year. Buying a dishwasher for the office kitchen and providing reusable silverware, cups, and plates will cut down on that waste. OFFER ALTERNATIVES TO THE TRASH CAN If your city provides recycling and composting services, this step can be as simple as making sure the bins in your office are visible and educating your employees on what should be tossed where. Barring a local compost program, you can start your own company compost pile for things like coffee grounds, lawn clippings, and lunch leftovers. If you don’t know what can be composted or recycled or are unsure if you are allowed to create your own compost pile, city officials and the internet are there to help. 3 Sustainable Moves Your Business Can Make Today GOING GREEN
WHAT INTERNS CAN OFFER These Young Minds Will Help Your Business Thrive Often utilized as file organizers, envelope lickers, and coffee fetchers, college interns are usually at the lowliest rung on the corporate ladder. But as some of the world’s most successful companies have proven, these young team members can be incredibly valuable to your business. If you haven’t considered offering internship positions before, the following benefits might just convince you. PROACTIVE RECRUITING In today’s competitive job market, recruiting a recent college graduate with relevant experience feels like finding a unicorn. But a coveted hire doesn’t have to be one in a million. An effective internship program can give you the opportunity to bring college interns on to your staff who could potentially become full-time employees. And luckily, unlike regular hires, you aren’t making a long- term, expensive commitment to your interns. During their internships, you can test whether or not they will be a great fit for your company before offering them a permanent position. And if an intern impresses you enough to hire them on after graduation, you can rest assured knowing they will already be familiar with their job by then. FRESH PERSPECTIVES There’s a reason top companies like Facebook and Chevron invest heavily in their internship programs. By bringing in young, innovative minds, you open up your business to fresh, unique solutions. Interns have spearheaded effective social media campaigns, modernized standard operating procedures, and even designed apps to help their businesses run smoother. In a world where remaining relevant is key to growth, businesses can’t afford to be out of touch with the next generation of consumers. So, while interns will likely do much of the grunt work at your business, don’t be afraid to hand them more responsibilities. Bring them into strategy meetings, ask for their thoughts, and treat them as valued parts of the team. Do this and you’ll be in step with some of the biggest players in the business world.
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Security Breach!
5 Strategies to Protect Your Building
HAVE A Laugh According to the FBI, a burglary occurs every 20 seconds. We tend to focus on protecting our homes from invasion, but in 2016, over 460,000 nonresidential buildings were burglarized. And after one successful break-in, your building is more likely to be targeted again. Here are a few crucial strategies to improve the security of your building. SMILE FOR THE CAMERA. Let’s start with the basics: If you don’t already have CCTV surveillance, install a system right away. Position these cameras in common areas with good lighting, and make sure they’re visible. The sight of security cameras may deter criminals from making your building a target. Some property managers try to cut corners by using fake cameras to scare off criminals, but this can backfire in the event of a break-in. Use real cameras and service them regularly so you can review the tapes whenever you need to. DON’T NEGLECT YOUR LANDSCAPING. Never let overgrowth overtake your property. Criminals view unkempt trees, bushes, and grass as a sign that you’ve been neglecting your property. This implies you may be neglecting other areas, too — your security system, for example. LET THERE BE LIGHT. Unless you have Batman patrolling your city streets at night, nighttime is when criminals are most likely to strike.
Install motion detector floodlights in prime areas around your building, including entrances, exits, gates, garages, in your landscaping, and near ground-level windows. A sudden burst of light can scare off would-be intruders and potentially alert anyone nearby of trouble. INVEST IN PARKING SECURITY. The Bureau of Justice Statistics reports that 11% of property crimes and more than 7% of violent attacks occur in parking facilities. If your building has a parking facility, make sure this area has ample security. DETERMINE WHO’S IN CHARGE. When reviewing building security, it’s important to determine who is responsible for keeping security up to date. Should the building owner or property manager maintain security, or does it fall to the tenants? Answer this question and make sure the person responsible is following all agreed-upon security protocols. There’s no one-size-fits-all strategy for security. Depending on the nature of a business or building, you will have specific security needs. You should periodically assess potential risks, make sure your building’s needs are met, and make repairs as needed.
PUZZLE
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Inside This Edition
1.
The Automated Chief Financial Officer
2.
Greening Up Your Business
What Interns Offer
3.
Can You Trust Your Security System?
Have a Laugh
4.
Your Ego Is Holding You Back
‘Ego Is the Enemy’ Get Over Yourself and Find Success Once in a while, a book comes along with a truly transcendent message. “Ego Is the Enemy” by Ryan Holiday is one such work. This book is not just for business owners, athletes, or those trying to lose weight; it’s a guide for everyone. By digging into the root of the human condition, this instant bestseller examines the single greatest threat to our own success: ourselves. This ambitious premise shouldn’t come as a surprise if you’re familiar with the author. Dropping out of college at 19 to be mentored by business strategist Robert Greene, Holiday has become one of the most trusted advisors of our time, working with brands like Google, Taser, and Complex. His other bestseller, “The Obstacle Is the Way,” tackles the difficulties of the creative process and our natural tendency to avoid necessary steps toward our success. “Ego Is the Enemy” dives deeper into the latter concept, highlighting ways we sabotage or deceive ourselves. For Holiday, ego is defined loosely as our perception of self. Some may have a poorer outlook on themselves than others, but, as the book’s title suggests, ego hurts us regardless of which end of the spectrum we fall on. Holiday argues our self- perception can act as both a roadblock and a pitfall: Those
with low self-esteem get stopped by doubt, while those with inflated egos often trip over their own arrogance. Those who unshackle themselves from their own personal narratives, however, can find lasting success.
“Ego Is the Enemy” is rich with examples of this concept in action as it explores the lives and contributions of often overlooked historical figures like Katharine Graham and Howard Hughes. These powerful individuals remain relatively obscure thanks to their tendency to put their work before self- promotion, yet their impact on global events is undeniable. Pulling from history, literature, and the latest psychological findings, Holiday weaves an argument as engaging as it is thought-provoking. At times contemplative and other times combative, “Ego Is the Enemy” holds up a mirror to readers and asks them to challenge what they see. For those willing to attempt conquering themselves, this book is a worthy companion.
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The E-Myth Chief Financial Officer
The E-Myth is the legendary and now iconic book series launched in 1986, written by Michael E. Gerber, explaining why most small businesses don’t work and what to do about it. The E-Myth Chief Financial Officer explains why the financial life of a small business is most often chaotic, frantic, and confused with the financial life of the business owner.
Learn what most CPAs and accountants can’t tell you and how it’s hurting your company. Learn why every business owner is at risk of a fatal decision at any time and how to avoid the disasters that follow. Learn why predictive management is far superior to reactive management and how to execute it.
EMYTH.THEPROFITBEACON.COM/BOOK/
(214) 383-0500
Praise For Michael E. Gerber, Fred G. Parrish, And The E-Myth Chief Financial Officer
“ A s a small-business owner serving as your own CFO, doing it the Fred G. Parrish and Michael E. Gerber way will make you look smart, manage smart, and lead smart. The results will be meaningful; your bankers will be impressed.” –R.L. Thornton III, Vice Chairman (Retired), JPMorgan Chase, Dallas, TX “ A great book on the chief financial officer’s role in managing resources, growth, change, and getting results. I highly recommend it.” – Daniel R. Tomal, Ph.D., Distinguished Professor, and Award-Winning Author, Leading With Resolve and Mastery “ S ome entrepreneurs and managers are ‘freaked out about finance,’ but this book leaps you past accounting to becoming your own financial architect. ” –Burke Franklin, Creator and CEO, Business Power Tools “ T his outstanding book lays out in clear and practical terms the critical, strategic, and operational roles that CFOs play in highly successful organizations. It is a must-read for every progressive business owner, regardless of the size of your company. ” –Patrick J. Below, CEO, CEO Consulting Services “ I f you want to grow your business, start with this book! Fred’s practical step-by-step process will give you the ability to identify financial problems before they occur. This easy-to-read book will help you understand how to proactively make changes to your business that will take it to the next level. Let Fred give you real-life examples of how actual small business owners have grown their companies by implementing the tools found in this book. The best news is you do not have to be an accountant to take advantage of these systems . Fred breaks down every system and process into actionable steps with templates and forms that any business owner can use to become the driving force of their profits.” –Mark Langford, Executive Director, North Texas SBDC If your company is large enough to have a true CFO, then good for you. But if it isn’t, you’re it! You need to know exactly what that means and, more importantly, what to do about it …
EMYTH.THEPROFITBEACON.COM/BOOK/
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