Every company, regardless of size, deserves to have an experienced financial professional devoted to planning, monitoring and implementing its financial and administrative procedures. The issues involved in finance and administration are not simply accounting issues, or legal ones, or even tax issues. They are a combination of all, plus personal issues such as succession planning, charitable contributions, bringing children into the business, and even retirement and the sale of the business. This includes a broad range of activity: state, federal and local taxes, payroll matters, budgeting, capital management such as bank debt, equity, and vendor arrangements, and business governance matters such as shareholder agreements, corporate compliance, and other matters. Successful business owners will need to address issues such as estate planning, investing, succession planning, and possibly even the sale of the business, either to partners, heirs or to a third party.
Small businesses don’t have the luxury or financial resources to have a full-time CFO to address these issues, and in most cases, the issues do not arise often enough to warrant full-time attention. Many small business owners use a combination of resources such as accounting firms, law firms, banks and benefits consultants to address problems, but never use those resources for planning, managing or addressing strategic issues. In some cases, the resource providers become the issue, since they are third party providers but not necessarily representing the best interests of the business, or assisting in decision making.
Businesses, just like people, have a life cycle. They are created by entrepreneurs, grow and become prosperous through wise decisions by their managers, and mature into cash-flowing entities, which present opportunities and problems for their owners. At each stage in this process, managers and owners must make critical decisions about the business which will affect its future success, decisions such as buying out a competitor, investing in new equipment or a new product line, providing benefits to employees, acquiring debt or equity, or bringing in new partners. Each decision requires information and insight, and often managers find it difficult to understand what all of the issues and implications of a particular decision might be. Third-party providers can help by pointing out problems along the way, but all too often the problems are the ones that their products or services will solve. Small businesses need someone to advocate for their position and represent their interests in the process.