Will there be enough cash to get through a slow season? Can you afford to hire, or to open a second location? Without someone helping you look ahead, those decisions often end up resting on gut feel.
That forward-looking work is called financial planning. In a large company, it belongs to a Chief Financial Officer (CFO). Small businesses often can’t justify a full-time CFO salary, even though they face plenty of CFO-sized decisions.
At Dillon Business Advisors (DBA), an outsourced accounting and advisory firm for small businesses, every client gets a Team of 3: three specialists who each own a different part of your accounting. One keeps your day-to-day books and payroll current, one handles your taxes and compliance, and one helps you plan for cash flow and growth. On average, the whole team costs about 70% less than one full-time hire.
The person who helps you plan is your Client CFO. This post explains what small business financial planning includes and what working with a Client CFO looks like.
What Is a Client CFO?
A Client CFO is the growth and strategy partner on your Team of 3. Their focus is the future: where your business is headed and what it will take to get there.
Your CFO doesn’t start from scratch. They work from books your Client Service Manager keeps current and numbers your Client Controller has already reviewed. That means your time together goes toward planning instead of figuring out what happened last quarter.
What Does Small Business Financial Planning Include?
Here’s what your Client CFO helps with at DBA.
- Growth strategy. Your CFO helps you think through what’s next, whether that’s a second location or a new service line, and what it would take financially to get there.
- Cash flow. Knowing when money will come in and go out, not just what you earned, keeps a profitable month from turning into a tight one.
- Profit. Your CFO helps keep expenses in check and fine-tune your pricing and staffing, so more of what you bring in stays in the business.
- Big decisions. How much to pay yourself as the owner and whether you can afford an important hire are exactly the conversations a CFO is there for. Your CFO can also show you how your business compares to others in your industry.
- Succession planning. Over time, your CFO helps grow the value of the business, so you’re in a strong position when you decide to sell it or pass it on.
What Happens in a Quarterly Planning Meeting?
Every three months, your Client CFO sits down with you for a Quarterly Planning Meeting. It covers two things:
- Expenses and cash flow. Your CFO reviews your top 10 expenses and your outstanding accounts receivable, meaning the money customers still owe you, so you can plan for growth instead of reacting to surprises.
- Your performance report. You’ll see how revenue, profit, and cash are trending compared to past quarters, along with a plan for the quarter ahead.
Why Financial Planning Works Better With a Full Team
A standalone advisor can only work with what you hand them. If your books are behind or messy, much of their time goes to cleaning up data before any real planning starts.
On a Team of 3, the planning and the day-to-day work stay connected. When a plan changes something today, like a new hire or a price increase, your Client Service Manager and Controller are already in the loop and can put it into motion.
Next Steps: How to Tell If Your Business Needs Financial Planning
You don’t need a crisis to benefit from planning. Start with these questions:
- Look at how your last big decision was made. If you relied on instinct because the numbers weren’t ready or nobody had time to walk through them, planning support would help.
- Check whether you know where cash will be in six months. A business can be profitable and still run short of cash, and a forecast is what lets you see that coming.
- Notice how often you talk about the future with your accountant. If it only comes up once a year, the rest of your decisions are happening without a plan behind them.
- Think about your long-term goals. Whether you hope to sell the business someday or hand it to the next generation, the planning starts years before the decision does.
Get Help Planning Your Business’s Next Stage
DBA’s first step is a free business analysis. The team walks through your finances with you and shows what your Team of 3 would tackle first. Get your free business analysis to see what planning ahead could look like for your business.
