Florida CFO Group Blog

Helpful topics from Florida CFO Group's experienced CFOs

When to Hire a Fractional (Part-Time) CFO - Part 1

Part One of Three Parts: When to Hire a Fractional (Part-Time) CFO

In the first of a three-part series on hiring a fractional (part-time) CFO, Florida CFO Group partners Betsy Bennett, Mark Brown, and Jim Dietz discuss the role of a part-time CFO and when and if you should hire one.

Why should an entrepreneur consider hiring a fractional (part-time) CFO?

Mark: An entrepreneur with a small company is the head of sales, operations, marketing, research and development, HR, and the CEO, COO, and CFO. And that's fine in the beginning. Then as the company grows it becomes more complex and you start adding people. Some positions, such as VPs of sales and operations are harder to do on a part-time basis and tend to be full-time. As growth continues, it reaches a point where a full-time CFO is needed to handle some of the financial aspects.

But there's this transition period, when the role of the CFO goes from being 10 percent of one person’s time to a large time commitment, but it just doesn’t make economic sense to hire an expensive CFO. If you do hire a full-time CFO too early, he or she is stuck doing controller and bookkeeping work to fill their time. So, you're overpaying somebody to get their skill set. If you bring in a part-time CFO to focus on actual work that needs to be done, you can save a tremendous amount of money.

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Are You Losing Money on Your Biggest Customers? Part III

Part Three of Three Parts: Turning Around Unprofitable Customer

In the third and final part of a three part series on how to recognize if you’re losing money on your largest customers, Florida CFO Group partners Betsy BennettMark Brown, and Jay White discuss turning around unprofitable customers.

Turning around an unprofitable large customer relationship.

Jay: We have some big customers with one of my clients, where we sell them upwards of fifteen or twenty different products. I would say three-quarters of the products that we sell are profitable. So, we’re working with the bottom quarter to begin with. We’ve sent these customers a letter notifying them of a price increase with the understanding we’ll continue the existing price for six months while they find another supplier if they do not want to go with the price increase. In some cases, they take the unprofitable parts elsewhere, but many have accepted the higher price and stayed with us. But, if they take an unprofitable part away, it generally is not that big of a deal as we were losing money on that part to begin with.

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Are You Losing Money on Your Biggest Customers? Part II

Part Two of Three Parts: Factors Impacting Customer Profitability

In the second of a three-part series on how to recognize if you’re losing money on your largest customers, Florida CFO Group partners Betsy BennettMark Brown, and Jay White discuss the factors impacting customer profitability.

Is Customer profitability an issue from the start of the relationship, or does it erode over time?

Betsy: It depends. I think the whole key is that you need to have some mechanism to try and measure customer profitability, either an interactive system that works with your general ledger system or an ad hoc financial analysis that you do on a periodic basis. 

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Are You Losing Money on Your Biggest Customers?

Part One of Three Parts: Revenues vs. Profitability

In the first of a three-part series on how to recognize if you’re losing money on your largest customers, Florida CFO Group partners Betsy Bennett, Mark Brown, and Jay White discuss recognizing if you are losing money on your largest customers and the impact of chasing revenues vs. profitability.

How is it possible not to know you’re losing money on your largest customers?

Betsy: It’s very possible if you’re not tracking finances by customer. For instance, in a service business, you might not track the results of each individual customer relationship in your financial records. So, one might be costing you a disproportionate amount to support, and unless you have other mechanisms other than a general ledger, you’re not going to detect that.

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Exit Planning Strategy: Who Needs It?

Florida CFO Group partners Dawn Johnson, Mark Brown and Harold Hale discuss the importance of having an exit strategy for your business.

Exit Planning Strategy: Who Needs It?

Harold: An exit strategy is planning for a transition of ownership. It is a way or means of either entrepreneurs or investors to basically reap the benefits of what they created.

Dawn: It’s also known as a cash-out. When an entrepreneur realizes that their business is going to grow, they may start to think about how and when to cash out.

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