Natural Entrepreneur: Financial Lessons for CEO's: 9 & 10

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Financial Lessons for CEO's: 9 & 10

Final lessons for CEO's and business owners

by Helen Dutton, A vision of Your Own, LLC, Weare, NH

In this last installment of The Top 10 List of What Business Owners Need to Know about Finance, I cover the human side of finance. While your financial records are about the numbers, the people involved can make or break your business.

9. Hire the best that you can; know what skills and attributes you need.

In Finance, understand the difference between a bookkeeper and a financial person. You will most likely need both but at different business stages.

Your finance and accounting needs vary greatly based upon what stage your company is in and where you are headed. When you first begin a business, you need someone to set up your accounting system and, if you decide to maintain it yourself, to train you. Look for a bookkeeper with experience establishing the type of system that works for you and your business. If your industry has a standard accounting system, ask for their experience using that system. Find a person willing to train you and educate you should you decide to perform the function. Schedule a meeting with them to review the system with you. There are many bookkeepers in this world; make sure that the one you choose to work with can communicate effectively with you. If you choose a bookkeeper at the early stage, ask about their experience gathering tax information. Consider meeting with your bookkeeper and your CPA firm together; outline expectations and needs of every party.

As your business grows, so do your accounting needs. You may eventually bring your accounting in house and hire a full-time bookkeeper. A bookkeeper will generally handle your accounts payable, accounts receivable (customer billings), and general ledger. Most businesses will eventually hire staff for each of those functions. With more business growth comes more needs. Experience and education are essential; as the business grows, your financial person will have more exposure and more impact on your business. In my experience, communication skills become the second most important element of your key financial person. You need to be able to rely on him or her to relate effectively with bankers, investors, employees, vendors, business partners, and customers. They have the potential to make a greater impact on a wider audience than any other position in your company.

10. Your accountant, attorney, investors and banker can all be your allies.

Use their expertise, experience, and contacts for the success of your business. Understand their roles; they do want your success but they are also beholden to their own bottom line and interests.

Consider the range of people and businesses encountered by professional service providers. My favorite banker had clients in such diverse industries as maple syrup production to computer hardware; ranging in size from $15-$20 million to of those 20 times that size. That range of experience was accessible to me. The same held true for our venture capitalists, attorneys, and CPA firm. These professionals can also be a vast resource for contacts and leads.

Bankers, investors, accountants, and attorneys can be the most helpful when you disclose all relevant information to them. Don’t waste their time, or yours, by giving them an incomplete account of any situation in which you need some advice. While you will pay directly for your accountant's and attorney's time, extra time from your investors and bankers does not incur a cost. Respect their time; ask for their time to brainstorm with you or walk through a challenge before using it.

Often, I suggest to clients that they create an advisory board, a group of experienced business people with whom they can bounce ideas off or who will share their opinions and experience but who have no voting authority in your business. The good news is they have no vested interest in your business, allowing them to be freer with ideas and less wedded to existing plans. The bad news is that they don’t have a vested interest! At the end of the phone call or meeting, they leave your business and most likely return to their work. You, on the other hand, continue to live in your business. Remember, too, that these individuals are in business as well and have their own business concerns and goals. Use them as a resource and gather input, advice, and opinions. At the end of the day, though, you need to do what is best for your business. These professionals must do the same for theirs.

Let me share one last thought. Some decisions can be made solely on an intellectual basis. That is, you apply knowledge to a situation and craft a solution. Many more decisions fall into a gray area; there is not a hard and fast correct answer. This is where we most often get into trouble! Have you ever caught yourself saying “I’m over-thinking this” or “I’m thinking about this way too much”? Chances are you are trying to find a solution solely on its intellectual merits without listening to what feels right. Review your options and follow that which feels ‘right’ in your head, your heart, and your gut. Know when to ask for help or more information; know when to listen to your internal indicators. I have never seen anyone terribly off course by listening to those three internal barometers – head, heart, and gut - together.

Through this Top 10 List of What Non-Financial Business Owners Need to Know about Finance I have shared my experiences as both a financial employee and as a business coach. As an employee, every time a merger, acquisition or other significant project was completed I created a list of “Lessons Learned” from which this series of articles grew. I now encourage my business owner clients to do the same and suggest the same to you.

Wishing you much prosperity!

Helen Dutton is a national business coach for fast growing and entrepreneurial businesses and principal of A Vision of Your Own, LLC in Weare, NH. She can be reached at (603)529-2345 or Helen@avisionofyourown.com. Also, visit www.avisionofyourown.com

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