As a CFO Consultant I have spoken with many business owners from many different industries. My main objective is to really drill down to what the business owner really needs and want. Not what I need and want, not what I think they need and want, but what they think they need and want and to determine their desired outcome. One thing I do that is very effective is to write down their exact words when they are telling me:
- What their need and want is,
- When they're describing their problem or;
- When they're expressing a pain point;
This helps me drill down to the real need and want as I can keep the business owner focused by repeating their exact words.
Through my research and 28 years of business ownership and after drilling down from how they answer the question "What is your biggest fear or frustration in your business", I have discovered that my clients needs and wants 90% of the time fall into one or more of 5 categories to which I can help them.
These are not in a particular order of priority.
For the first need and want that business owners have, the clue I get is:
"I don't know if I am making money or not."
Now I would drill down even further, but it's likely the real need and want here is to have accurate and timely financial statements. Accurate and timely business decisions can only be made with accurate and timely financial statements. Furthermore, accurate and timely financial statements give a frame of reference as to what actually is going on and act as a scoreboard. Imagine going to a basketball game and they don't keep score. Would you really have a frame of reference as to what's going on? Sure you will have a gut feel but that's it. Your balance sheet, your P & L, your Cash Flow Statement, these are the scoreboards of your business. They give you that frame of reference as to what is going on.
The second need and want that business owners have, the clue I get is:
"My financials say I made $150 grand where the hell is it? It's not in my bank account!"
Now I would drill down even further, but it's likely the real need and want here is the business owner needs to know where their cash is going. Cash is the lifeblood of any business. Without cash the business is crippled. Many times cash ends up in hiding places. A couple of weeks ago a client had this exact frustration. Their cash was tied up in Accounts Receivable, excess Inventory, Equipment and paying their bills too quickly without the benefit of purchase discounts. Yes, paying your bills too quickly impacts cash flow. But the important thing is, he now understands where his cash is hiding and we have implemented strategies in each area to free it up and to reduce the chances of it hiding there again.
For the third need and want that business owners have, the clue I get is:
"At times my business is overwhelming!"
Now I would drill down even further, but it's likely the real need and want here is the business owner needs a strategic plan. A strategic plan defines the direction of the business and it defines the proper allocation of company resources to ultimately achieve the business owner's goals and objectives. The strategic plan also identifies the key drivers of the business. Without a strategic plan the business owner is operating their business by the seat of their pants, putting out fires on a day to day basis and running in place instead of moving forward. The most important point is not only developing the plan but the business owner needs to commit to implement it and execute it or it is all for not!
For the fourth need and want that business owners have, the clue I get is:
"I never have time to work on sales!"
Now I would drill down even further, but it's likely the real need and want here is the need for the business owner to start working on their business instead of in their business. The business owner must be the face of the company, the ambassador if you will. Their job is to bring business into the company and to schmooze and communicate with existing customers in order to maintain the existing base. What I find business owners doing is administrative functions and tinkering on the mechanics of their business. I can always tell when the business owner is working in their business because sales are choppy! If business owners can accomplish this one thing, and work on their business instead of in it, they will see more consistent sales, their sales will grow, their profits will grow and their business will be more valuable and more marketable.
For the fifth need and want that business owners have, the clue I get is:
"My employees can't do anything right."
Now I would drill down even further, but it's likely the real need and want here is the business owner needs to have people accountable in the organization. The most successful businesses that I have seen have people throughout the organization accountable for what they do. Why don't business owners make people accountable? Because of everything I have said. Number 1, when they don't have accurate and timely financial statements they cannot develop metrics to evaluate the performance and productivity of their business and make their employees accountable for those metrics. Number 2, when they don't know where their cash is going they don't think they have the resources to put the right people in the right places and to do the proper training to make people accountable. Number 3, when they don't have a strategic plan they don't know what the key drivers of the business are and therefore cannot make people accountable for those key drivers. And Number 4, if they are working in their business and tinkering instead of on their business and be the ambassador, they are not delegating responsibilities to make people accountable.
And when they don't do any one or more of these things the weight of the world falls on the shoulders of the business owner and it gets heavier and heavier. Then the business owner starts to work more hours, then they get burned out, then they fight with their spouse because their never around, then they start to hate their employees and finally they start to hate their business and that's when it starts to fall apart!