CFO Wise: Problems Entrepreneurs Face

CFO Wise: ENTREPRENEURS
DEFINED: Individuals who effectively combine factors of production(land, labor, capital, intelligence, knowledge, capacity) into a product or service that can be commercialized; undertake and take responsibility for the outcome of a business venture; risk-takers
NOT INCLUDED IN THE DEFINTION:
Accounting experience
Finance experience
Treasury and Compliance experience
(C) Copyright 2009 CFOwise
(C) Copyright 2009 CFO wise

MAKE, KEEP, TRACK THE PROMISE

ENTREPRENEUR ATTRIBUTES
They are eternally optimistic about their business
They do not know their key liquidity and debt ratios – many of them do not know what their balance sheet says
They often do not understand their cash flow and how it differs from their net income
They rely on their gut and what we call “entrepreneur mathTM”
Any others?

ENTREPRENEUR’S CHALLENGES
Most do not receive accurate AND timely monthly internally prepared financial statements
They lack internal staff that can analyze and explain the firm’s performance AND drive improvement in cash flow and profitability
Most do not project cash flow
Most do not know their break-even point
Most do not understand the value of their business, and, more importantly, how to improve it
(C) Copyright 2009 CFO wise

How to Solve the Problems
Solution 1 - Accurate and Timely Internally-Prepared Monthly Financials
Solution 2 - Staff
Solution 3 - Projections – Three-Statement Way
Solution 4 - Fixed vs. Variable Costs and Break-Even
Solution 5 - Enterprise Value

CFO Wise: Problems Entrepreneurs Face

by CFO Wise on Nov 12, 2009

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