In January 2019, I talked about financial and management pitfalls for growing small businesses at a professional networking group meeting. Last month in Part 1 of the two parts, we first focused on potential pitfalls related to lacking strategic goals and skills. Here in Part 2 I am listing some pitfalls related to leadership, internal teams and professional advisory, as well as staffing, legal, and insurance issues. Please note that the lists are not exhaustive.
Pitfalls – Lack of Delegation
Owner does it “all” to save time, money, control, etc.
Owner is “in” the business, not “on” the business with leadership visions and strategies.
Endless daily fire drills, exhaustion, lack of time to focus on growth of its brand, planning, direction.
Pitfalls – Staffing and Employment Risks
Hiring independent contractors vs. retaining W-2 employees.
No employee manuals; not following company’s policies and procedures.
Employees steal or misrepresent.
Difficulty in finding and retaining highly skilled employees that are a good fit.
Workplace is “like a family.” Allowing alcohol and causal behaviors.
Inability to set the right “tone” at top.
Pitfalls – Weak Corporate Team
Business owner is the only key person in the business; owner = business.
Hiring friends or family versus hiring employees with the appropriate skills.
Promoting friends or family members to higher levels of responsibility without training or ability.
Gaps in management team expertise.
Lack of separation of duties.
Pitfalls – Weak Advisory Team
Saving money by not using outside experts and having work done in house.
No succession plan or start too late.
Lacking strong relationships with various types of professional advisors.
Pitfalls – Legal Risks
Not in compliance with law – legal, employment, product, patent, tax, etc.
Lack of insurance – D&O, E&O, etc.
Pitfalls – Property Risks
No plans for catastrophic events.
Inadequate measures for safekeeping equipment, inventory, and other company assets.
Inadequate insurance.
As a fractional Chief Financial Officer (CFO), I provide consulting services to nonprofits, family offices and small to mid-sized businesses. I am the trusted financial advisor providing accounting, finance, human resources, and IT management services so my clients can focus their attention on their customers.
Salient Items while working with a2zCFO:
Works at client’s location and directly with client’s staff;
Affordable and flexibility in hours – 4 hours a month to short term full time assignment;
Excels at messy and difficult clean up situations;
Meaningful financial reporting for management, bankers, and CPA’s. Tax returns completed by 4/15;
Cradle to grave services – from bootstrapped startups to exit transition service experience.
By providing trusted financial advice, I create financial and goal clarity, resulting in increases in cash, profitability and sales all the while preparing the business strategically for a successful exit when the time is right.
Please call me (925) 216-5058 or email: rolf@a2zCFO.com
A2Z CFO, we keep your ship on course.