NAWBO KC Panel on Business Financials
NAWBO KC hosted a panel about the financials business owners need to know. The esteemed panel included NAWBO KC chapter members:
◼ Monica Dahl, Commercial Banking Relationship Manager, Arvest Bank
◼ Angela Primavera, President, Creative Displays, Inc.
◼ Katina Larson, CPA, MBA, Managing Director, CBIZ MHM, LLC
◼ Kristin Herman, CFP, CLU, ChFC, Financial Advisor, Northwestern Mutual
◼ Stephanie Willis, Business Consultant, SBDC Kansas, (panel facilitator)
The expert panel shared why it is important to know the business financials, what numbers to know, and actions to take based on the information.
THE WHY
The bottom line about the bottom line: Knowing your numbers can give you a competitive advantage, position your company for growth, and empower long-term viability. “It shows you take your business seriously,” said Monica Dahl. Obviously, any business owner who wants a bank or investor or big client to take their business seriously needs to do the same. If you want to grow, you have to know.
THE WHAT
Know your Sales numbers, but if you only look at Sales, you’re missing part of the story. Revenue can look impressive on its own, but the rest of the story could alert the business owner to the fact that a product line or company actually makes very little profit. Here are some of the numbers to know:
◼ Revenue by product and customer segment
◼ Forecast targets
◼ Product margin
◼ Cash flow
◼ Contribution margin of the products that contribute to your top and bottom line
◼ Cost of goods and expenses
◼ Taxes
Angela Primavera bases the forecasts on the strategic plan, which she revisits annually and measures monthly. When an idea comes along that is outside the strategic plan, she has numbers to back up why she stays focused instead of tempted by “chasing squirrels.”
THE ACTIONS
When you know your numbers, you have more options for growth, innovation, and resilience if a product stops selling well. Here are a few specific recommendations from the panel:
◼ The panel emphasized the importance of being proactive and intentional regarding financial planning and how the business aligns with your life. Kristin Herman emphasizes that with her clients because money can “trigger” people she explained. “People often try to control it or avoid it, and neither benefit their lives in the long-run.” The Action: Meet with your financial planner and banker to discuss your long-term vision for your company and life. Make sure they align.
◼ Understand whether you need an accountant, CFO (full-time or fractional), or bookkeeper at this stage of your business. Katina Larson listed several tax areas a bookkeeper whose job is data entry would not be responsible for, nor would most business owners know. For example, there are R&D credits available for product and process research. Your company might be able to take advantage of more tax strategies if you had an accountant on your team, along with your banker and attorney. The Action: Decide what your business needs right now and arrange for that level of expertise.
The panel left one final thought for business owners:
◼ Monica advised us to listen to our businesses. Take the time to learn the ins and outs in order to grow.
◼ Angela advised to have a strong team of your banker, accountant, attorney, and others—and always learn from them.
◼ Katina advised to invest in your financial health financially, with time, in relationships. Be intentional.
·◼ Kristin advised to understand your internal relationship with money so it helps you build your life.
NAWBO KC has resources that can help business owners accomplish the recommendations shared by the panel. Reach out to the panel and view the About Us page on the website for a list of members and their companies. If you are not sure who could help you, feel free to reach out to the board to refer you to a member.
(Article by Kelly Byrnes, Voyage Consulting Group. Posted February 14, 2023)