When an aspiring small business owner leaves their job to live their true passion, they are armed with confidence to take on a new adventure. Starting small with plans to grow and staff the business with the bare minimum to be successful, the small business owner believes he or she is equipped with the necessary financial knowledge needed to be successful. When in reality, their knowledge is limited to money comes in, money goes out and whatever’s left is the profit. However, profitability is much more complex than that.
Chris Peer founded his professional services business in 2002. Having started his company at his dining room table, Peer’s company now has over 20 employees and is rapidly growing. Here, Chris shares the top three decisions he ever made that led to his success and business growth.
1. Defining a Niche
At the start of his business, Chris would take on any and every type of client in order to establish a client base. After 10 years in business, he was advised to define a niche. Focusing on an industry, technology or area of expertise made way for a customization of offerings that provided customers with exactly what they wanted. Furthermore, it granted the ability to focus a limited marketing and sales budget into one vertical which provided a greater return on investment.
2. Hiring a CFO
Financials are the most important part of your business. After 12 years of managing financials himself, Chris realized he needed an expert to help with forecasting and financial analysis. Oftentimes, owners of small companies don’t understand that accountants make projections by looking at historical numbers. How is a business to grow when financial forecasts aren’t being made with the future in mind? Although an accountant sees how profitable the company is when looking at a balance sheet, a CFO looks to the future and makes cash flow predictions that, in turn, allow business owners to make educated investments in their business’s future.
– Chris Peer
Forward-looking financials are more important than what your accountant can give you from looking back at last year’s numbers. Financials are the most important benchmark for your business, so why wouldn’t you leave them to an expert?
3. Changing Culture From Family to Team
When you think of the highest performing groups in the world, they are almost always incredible teams. The Cleveland Cavaliers and the Navy SEALs are perfect examples of how talent, training and teamwork propel a group of people to accomplish the impossible.
As a small business owner, it’s not uncommon to think of your company as a family. After all, Americans spend more time at work than with their families on average. However, families don’t often perform well together. As a team, each person has accountabilities and responsibilities for getting things done and accomplishing great things. With a mindset focused around the team’s success the objective becomes to continually improve the team, via education and training, hiring, and professional development. Since transitioning to a culture of team, Chris says his employees have an added sense of accountability and service deliverability that has improved threefold.
If you’re a business owner in Northeast Ohio and need the support of a part-time CFO, consider BeaconCFO Plus.