CLIMBING MOUNTAINS TOGETHER
Kirk W. McLaren, MBA, CPA
Foresight CFO Solutions
Foresight CFO Solutions helps growth-oriented business owners succeed in scaling their next peak — whether it’s adding locations, expanding services, growing payroll or exiting the business. CEO Kirk W. McLaren and his team also ensure clients have their financial house in order in the long term, so they can be audit- and due-diligence-ready years ahead of need.
Q: Who are your target customers?
A: The clients who experience the best value from our services are the growth-oriented and strategic event business owners. They are the “mountain-climber” CEOs who are itching to scale the next highest peak — whether that is adding additional locations, expanding product lines or services, growing payroll and key employees, or exiting the business. Typically a $2-$20 million company in both product and service businesses, our current and target clients are from various industries, with typically 10 or more employees.
These CEOs have established successful businesses and are ready for the next step. They see more growth opportunity in their products, distribution, customer base or new ownership. They are headed to the next peak, the pace is quickening and the stakes are now higher and riskier.
Some clients are going to grow organically but don’t have scalable processes or systems, or sometimes even a handle on what is happening financially. We help them get their arms around the financials and understand the key scenarios the statements are drawing. Key processes for value building are identified, plans are created, goals are set, and projects get appropriately funded for clear execution and attainment.
Other clients are looking to grow their businesses through acquisitions. We work with them to help get their house in order to attract and increase the probabilities for raising capital, if needed, to make those acquisitions happen. Plus, we work side by side with the CEO or designated team leader to review the health of those targets.
For other clients, our role is to help them tame the tiger that their businesses have become because of fast growth, leaving them thrilled with their accomplishments, but stunned by how overwhelming the business has become. We make them feel in control again by helping to identify where to rein in certain actions and move forward on others, with clear understanding of the financial foundation and business goals.
Within our target customers, the current financial situation is solid but can change rapidly. Good accounting practices may be in place and we can jump right in, or sometimes we find that new habits and systems will provide a more productive foundation. In either case, we can work with existing systems and accountants or set new ones in place.
Strategic financial information and guidance is not affordable on a full-time basis for our target customers, but is now crucial for future success. That’s where we come in. We work with the CEO on a weekly or monthly basis as a valued and trusted business advisor to validate or help redirect the next moves. We provide the right amount of knowledge, explanation, insight and guidance to CEOs for their current business requirements.
We attract and serve well-run, profitable companies. We work with companies with positive momentum, not typically pre-revenue or turnaround situations.
Q: How is Foresight CFO uniquely positioned to serve those customers?
A: We thoroughly understand our clients’ mindset because we’re a growing company driven by the mountain-climbing mentality as well. We experience the same pain points but also celebrate the winning solutions we employ from our models and systems within our business. We use what we recommend to our clients.
Plus, we’ve been there. We are proven entrepreneurs and CFOs, excited to share our experiences and well-earned successes with our clients. We are from different industries and know the requirements of the basics of business growth and the elite mentality and resources crucial to success. We also know that our business isn’t that different from our targeted clients. We share the same challenges, functional area frustrations, employee motivation mysteries and enduring passion for our business as our clients.
Much of what we do is aimed at the business owner and their team moving to a point where they are ahead of the market and operational challenges, instead of reacting to today’s fires. Current prospects talk about losing control, not knowing what is going on any longer because their business has grown and the marketplace may have changed, not knowing if they can make decisions about hiring, entering new markets and strategically important growth prospects.
Foresight CFO gets ahead of this by teaming up the client with our financial management specialists who have unique capabilities derived from our Strategic Financial Management System™ (SFMS) and our CFOs’ experience and wisdom in working with many types of business challenges. The proven SFMS we developed has helped our clients avoid the worst decisions for the future of their businesses and their employees. It is also the foundation for our company, so we continuously hone the effectiveness of the system we provide to our clients.
We find structure problems, such as a cash shortage, 18 months ahead of need, so that the team proactively addresses it instead of being surprised and paralyzed when it’s too late at year end. We create and review monthly budget profit models to actual financial result variances as leading indicators to proactively work with P&L managers to adjust operations and decisions.
Our methods track this performance from the 12-month budget profit model, cash forecast and multi-year forecasts to figure out what it takes to achieve the team’s financial objectives. We are using internal controls that proactively ensure accounting is correct and prevent fraud; helping a company be audit- and due-diligence-ready years ahead of need; developing eight business drivers that create market and operational success today, but also provide succession planning options that are years out in most cases.
We partner with our client companies over a specified time period. Some consultants parachute in, prepare and provide a big report, and then leave. We continuously monitor and evolve our responses as the business grows and are the team members who implement portions of our own recommendations.
We have our skin in your game.
Q: Why is it so important for businesses to “know their numbers?”
A: Entrepreneurs can be risk takers and intuitively driven business leaders. As we all know, being a small business CEO is not for the faint-hearted. Because the pace of growth increases so quickly and intensely, CEOs lack the time and sometimes the knowledge to truly understand their business’s financials. Income statements, balance sheets, cash flow, and burn rates can be overwhelming in this environment. Not to mention competitors breathing down their necks. Full-time CFOs are unaffordable in the current budget and accountants don’t always fill the void. Our services can also be more effective than a full-time CFO because our scale allowed us to create better tools, methods and expertise.
CEOs who understand their numbers recognize the difference between merely employing good intuition and creating and implementing the best solutions. Our CFO solutions can compare the differences in possible opportunities and threats to enable the CEO to make the best decisions at any point in time, without ever second-guessing the decisions. This is also a game changer when the CEO is seeing cash zapped out of the business because of quick growth.
With our CFO services, cash crises can be averted because we see the problems ahead of the need and can guide the CEO out of potential trouble. Additionally, understanding the true meanings of your numbers and knowing they are accurate gives you greater clarity and confidence to move forward, especially when competitors are breathing down your neck.
That is our way of guaranteeing a well-deserved and undisturbed night’s sleep, over and over again.
Q: What are some of the most important pain points that Foresight CFO can help business owners address?
A: Am I making money? Where did the cash go? Can we afford to buy this? How much sales commission can we pay? I have to file my taxes and my books don’t balance! Where did we put those bills? Why is everything so chaotic?
For our mountain climbers, it’s making sure they aren’t leaving anything on the table. That includes ensuring their financials are competitive within their industry to ensure top dollar for a business sale and for daily effectiveness, knowing they have solid plans to move forward with their growth plans. For some CEOs, it is helping to select and secure the right financing to move into new geographic markets. For others, it is helping to determine the “what if’s” of expanding the product line to existing customers, with all of the complexity that entails, from manufacturing to new locations to new employees and marketing. Sometimes it is how to best handle cash in the bank for the war chest against rumored competitive attacks. Or how to create a more financially motivated and well-sized sales team.
And it is also the basics. In order to proactively and confidently guide a CEO on their financials to relieve the pain, there has to be a trusted accounting system in place to ensure the numbers are correct. Turnover of bookkeepers or accountants can lead to inaccuracies in the basic statements that can get compounded and chaotic. We strive to work with the existing systems and recommend any needed advancements or adjustments within your current system first. Our intent is to use what you have so you and your team are comfortable — not create new pain points with unfamiliar systems and new business processes. Changing accounting systems through lifecycle is painful. It involves initial workarounds and changing business processes, usually when operational distractions are most risky.
We are current with the best and most advantageous and will advise our CEOs about the benefits of these world-class accounting systems. Some of them can even support simple pre-revenue accounting through to the more complex IPO requirements, with no system changes and at the same price point of many existing products out there. Our focus is using existing systems, but we can and will offer improvements when the time is right, especially if it will relieve the pain points immediately and in the future.
Q: What is the most crucial piece of advice you have for business owners?
A: Stay focused on your real business purpose. CEOs started their companies for very specific reasons, with very clear intent and goals for solving problems for customers. Just as in mountain climbing, you bring only what is absolutely necessary to get to the next peak, to advance higher and higher to the summit. That’s focus. That’s grit. That’s determination. There is no quitting.
Stay open to new resources that are now available to you. Your company deserves the effectively unique and leading-edge vision brought by the right CFO. Your CFO will bring you a much larger vantage point, providing perspectives that are beyond just today’s issues and possibilities in the business; create ideas and practices no longer limited by what you know only in your company and your industry; and give you the safety and comfort of strong foundations and proactive insights to grow your business smartly.