Entrepreneurs are defined as individuals who combine factors of production into a commercialized product or service and take responsibility for business outcomes, despite risks. They are not defined by accounting, finance, or compliance experience. Entrepreneurs are often optimistic about their business but do not understand key financial metrics like liquidity, debt, cash flow, or their balance sheet. They rely on intuition over financial analysis. Common challenges entrepreneurs face are a lack of accurate and timely internal financial reports, financial staff to analyze performance and improve cash flow, cash flow projections, understanding of break-even points, or valuation of their business. Solutions include implementing internal monthly financial reporting, hiring financial staff, creating projections, understanding fixed and variable costs and break

1. 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

2. MAKE, KEEP, TRACK THE PROMISE (C) Copyright 2009 CFOwise (C) Copyright 2009 CFOwise

3. 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? (C) Copyright 2009 CFOwise (C) Copyright 2009 CFOwise

4. 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 CFOwise (C) Copyright 2009 CFO wise

5. 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 (C) Copyright 2009 CFOwise (C) Copyright 2009 CFOwise