Practically all of the time, business owners are so busy working in their business that they forget to work on their business. It’s much more exciting to make a sale than to review a budget. But with the US Chamber of Commerce showing about half of new businesses failing by their 5th year, you might want to keep on reading.
Entrepreneurs can be like squirrels chasing nuts, always searching for the next big opportunity. They’re often distracted by the “shiny object,” always ready to jump on new ideas as they arise. But great ideas they do find. Making them successful is the challenge. Their talent for creativity and finding opportunities normally comes with a major blindspot in regard to running a business efficiently and maximizing cash flow. They need help.
That’s where a Chief Financial Officer (CFO) might come in. Their sole purpose within an organization is to guide the owner toward well-informed financial choices, having considered the full impact that each decision will have on cash flow and other key variables.
CFOs (should) help you make the 100% correct financial decisions for your business. They also help achieve financial targets effectively. In a sense, they are the calculating yin to the impulsive yang that is you, the CEO. The bottom line? They find more cash flow and more profitability, adding more value to the company.
So, what happens if your business is too small to afford a CFO right now? No problem! Adopt the CFO mindset yourself and instill it in those around you.
How do you do that? You probably have an office manager or bookkeeper, right? Let them know you expect them to help guide you in making decisions and enacting them. Explain that a big part of their job is to help you find and preserve cash flow. It doesn’t hurt to have everyone in your company embrace this attitude!
Create a culture at work in which it’s everyone’s job to adopt the CFO mindset, even when you eventually hire a CFO. It’s one of the most valuable investments you can make in your company, and your team will love the challenge and trust you’re placing in them.
Create a CFO Mindset culture at work—put it in everyone’s job description
And remember, your trusted experts — tax pros, insurance agents, financial advisors — should be helping boost cash flow, too. Everyone on your team should be supporting your business and personal financial goals.
If you’re fortunate enough to have a CFO, don’t think you’re off the hook. You need to be clear about your expectations and hold them accountable. If this person is an A-player, they’ll be eager to find the cash flow necessary to keep your business booming.
The takeaway? Make time to work on your business. It will lead to greater financial freedom, more value for your business, a lifestyle you can enjoy now, and reaching financial goals faster. Be a savvy business owner and entrepreneur. Adopt the CFO mindset!
For a deeper look on thinking like a CFO as well as maximizing cash flow, saving on taxes, and building wealth, check out my book Master Your Cash Flow.