I worked with a project management firm that is a great example of why CEOs need to understand the hard truth with numbers, even if they don’t have a finance background and even if they already have a financial team in place. I was called in because the company was having cash flow problems, despite what the owner thought was a strong margin.
For any nonprofit organization, budgeting and creating a sound financial foundation can be a struggle in today’s economic and business environments. When we first met the CEO of this non-profit, a recent and significant cut in funding had left her deeply concerned about the overall financial stability of her organization. The organization had little reserves and its part-time bookkeeper was keeping information “close to her chest,” making it impossible for the CEO to get access to data. The goal of the engagement was to address these issues, figure out the amount of the shortfall and explore scenarios for reducing costs.
A straight path never leads anywhere except to the objective. When we first met this CEO, she was struggling with her CFO which would be leaving in a month’s time. The CEO, not being a “financial person” wanted to have an assessment of where they stand, and to have a job description of the new position. She needed someone to partner with and get her on a straight path moving forward with a financial strategy.
What happens when growth stalls? When revenue streams that had been swift and strong in years past, suddenly stagnate? The growing pains faced by older, established companies are, often, that they just aren’t anymore. Such was the situation that the partners of this 20-year old engineering firm found themselves when we first met.
Drip. Drip. Drip. It keeps you up at night. One drip, it’s ok. Two, it’s fine. Three, it’s beginning to get to you. Four, you have to do something. Five, you don’t know what. When we met the owner of this company, he’d been losing sleep over the financial state of his company. While it was growing, he had a number of “drips”.
