We live in the age of flat packed furniture, barbecues and other assorted household items. How do you think you would go putting one of these together in the dark? It would be near on impossible.
We also live in an age where heart surgery and other complex surgeries are commonly performed. Would you want your surgeon operating on you in the dark?
Yet it is not uncommon for businesses to be managed in the dark. Well to be more accurate, they are operating in twilight where they can see the parts but they can’t see the detail. This is one of the largest impediments to achieving successful outcomes in business.
An experienced virtual CFO can help you to turn the lights on and expose all the detail so that you can make informed and productive decisions. It is often this lack of critical detail that is preventing businesses from achieving the success they seek. And let’s not forget how hard SME businesses work and the levels of stress that business owners take home with them each night.
So what sort of business analytics are we talking about? There are many areas where analysis will be targeted. These include:
• Have sales volumes of some products or services started to decline or sales growth slowed? Which products or services and by how much?
• Are those declines or reduced growth levels specific to certain products or services, customers, sales channels or geographic markets?
• Are changes happening in one or more divisions, retail outlets or warehouses?
Gross profit margin
• Which products/services provide the best margins? Are these maintaining their proportion of sales?
• Have some input costs increased? If so which ones, by how much and how much do they impact on the cost of sales?
• Do you know what is happening to productivity and waste levels?
• Do employees have clear targets and do they receive feedback on how well they are achieving these targets?
• How are teams or departments performing and are productivity gains being achieved?
Similarly, many questions need to be asked about overhead costs, customer satisfaction levels, employee retention levels, the economic cycle, risk exposures and many more things that may be relevant to the business.
Business owners and key managers are generally very competent and have a great understanding of their products/services and often, a real drive to achieve. How frustrating is it for these hard working individuals when they consistently underachieve because they do not have the information they need.
A virtual CFO can arm these businesses with detailed business analytics so that they can understand what is working for them and what is not working. They will report on this from an impact on the business finances perspective. Managers can then focus their strategic management decisions towards the most important problems or the most meaningful opportunities to achieve positive outcomes.
If this relates to your business and you cannot justify the costs of a full-time, experienced CFO you should consider a virtual CFO to turn the lights on in your business.