• Accounting Systems
  • Cash Flow Processes
  • Advisor Coordination
  • Budgeting & Forecasting
  • Production & Operations
  • Banking & Capital
  • Strategic Financial Planning
  • Risk Assessments
  • Revenue
  • Operating Rhythm
  • Succession or Exit Planning
  • Readiness & Attractiveness
  • Price/Multiple
Summit Insights
Oct, 22

Uncertain Times: Four Steps to Protect Your Business


Confused about where the economy is headed and what this means to your business? Join the club! Many business owners are:

  • Frustrated by continuing supply chain issues and higher costs
  • Anxious about the potential for a real recession
  • Worried about retaining key employees
  • Sick and tired of doing it all
  • Disappointed by a lack of access capital and concerned about continued higher interest rates

There are many different views among economists and business leaders as to permanence of structural shifts in the economy and the likelihood of a significant recession. No one has a crystal ball that can predict where the economy is headed with certainty, even in the best of times. So, what can you do to protect your business and take advantage of growth opportunities when most other businesses cannot?

  1. Increase your Internal Sources of Cash
  • Emphasize and grow your service lines and customers with the highest margins
  • Shorten your sales to cash collections cycle through specific measures and process improvement
    • Adding cash to your balance sheet is always a good thing and often requires just a little additional discipline!
  • Obtain volume pricing discounts and/or extended payment terms through vendor agreements and commitment if that is an industry option
  1. Develop a Pricing Strategy Designed to Achieve Specific Outcomes
  • This might include raising prices on some products and services or lowering them on others to reach desired volumes, mix, and profits
  • Eliminate lines that don’t generate profit margin or support other profitable products
  • Stay close to customers, manage key relationships, and keep an eye on the competition 
  1. De-risk Your Business
  • Find ways to diversify your customer base, especially if two or three customers compose more than 50% of your sales
  • Increase use of customer contracts and pricing agreements if that is an industry option
  • Secure supply chains through contracts and have more than one supplier agreement in place for critical components or services
  • Hire a second-in-command, sales manager, or other key employee so that you can focus on strategy, growth, and unexpected events without disrupting the business
  • Utilize a Professional Employment Organizations (PEO) as one way to retain key employees through benefits programs that small or growing businesses could not otherwise afford
  1. Stay in Front of Capital Structure and Fixed Asset Financing Options (cash, debt, or leasing)
  • Have proactive conversations with your banker, lenders, investors, coaches, or advisory board to optimize your cost of funds and maximize net return on investment.

These are just a few of the “levers” that leaders of well managed organizations can pull to protect business value and position their companies for growth during difficult and uncertain times. A fractional CFO can help design, implement, and manage strategies addressing these areas, while providing the management team with valuable forecasts and timely performance insights.

Jason Dean is Area President with FocusCFO and is based in Nashville, TN.