Often an under leveraged position in helping you grow the value of your company
Every department leader on your team is important to the near and long term success of your business. But the one person we find most often under leveraged in building the long-term enterprise value of a company is your finance partner, be that a controller or CFO. When this position is staffed properly and given the right focus, it can make all the difference in the world between a euphoric exit event and a disappointing one.
Ask yourself, am I getting enterprise value enabling results from my Controller/CFO?
To help you think about this further, here is a list of things your finance partner should be doing for you to build enterprise value:
- Ensuring your financial statements are reported accurately, in a timely manner and to industry norms (i.e.: calculating your company gross margin consistent with how they are reported in your industry).
- Providing you with proforma financial statement projections (forecasting) looking out 12 months, using historical performance as an indicator of future results. Weak finance partners will only tell you what happened in your business, strong finance partners will work with your Sales and Operations leaders to develop proforma forecasts to tell you what will happen using historical performance as the basis for their projections.
- Providing you weekly (or minimum monthly) a 13 week rolling cash flow projection for your company.
- Serving as a key member of your leadership team in building an annual operating budget that is linked to your company strategic plan. And will bring forth meaningful financial data to help facilitate strategic thinking and planning dialog amongst your leadership team.
- Negotiating key terms with partners such as banks, health and benefits providers, facility and equipment leases. These negotiations can save your company meaningful dollars which can positively impact cash flow and create long-term enterprise value.
- When the day arrives that you want to meet with potential acquirers, your controller or CFO will play a key role in conveying confidence, knowledge and experience related to the financial performance of your business – one of the first members of your team that a potential acquirer will evaluate is your finance partner and this role is often the one your potential acquirer will spend the most time with through the due diligence process. Is your financial partner experienced and skilled enough to play this key role through due diligence?
Certainly, your Sales and Operations leadership are important in their roles to help you build your business. But often overlooked in their value creation role is the controller or CFO. Give thought today as to whether you are benefiting from the right finance partner and all that they can do today and will do tomorrow when it’s time for you to sell. The right finance partner can help make or break your future euphoric exit event.
