Creating a Financially Healthy & Sustainable Business

Podcast: The Biz Doctor

Episode Title: Creating a Financially Healthy & Sustainable Business

Host: Lauren Goldstein

Episode Guest: Kathy Svetina

Episode Date: Nov. 9, 2022

Listen Here:
Apple Podcasts

Spotify

Friends don’t let friends WebMD their business.

Get out from under your business. Scale up without burning out. Get the most out of your current team. Make your next hire your best hire. Understand what the heck business operations actually are. Become more productive in your business and in life.

Welcome to The Biz Doctor Podcast. I’m your host Lauren Goldstein – award-winning business consultant and advisor fondly nicknamed the “biz doctor” by my clients, and the namesake for this show.

At the Biz Doctor Podcast, we believe that building a business doesn’t have to be hard. You can have a thriving business, make an impact, AND true entrepreneurial freedom.

In each episode we are going to bring you no BS, true to life, and effective tools, tactics, perspectives and approaches to business operations, building high performing teams, and leadership that will actually make a difference today to get you closer to your business goals.


About this episode

Nothing spells success like a financially healthy and sustainable business. But, achieving such a feat requires more than just ambition; it demands strategic financial know-how and reliable and steady guidance.  So how can you make this happen in your business? Consider bringing in a Fractional CFO to provide financial wisdom and expertise without burdening you or your business with hiring someone full-time. 

In a recent episode of the “The Biz Doctor” podcast, host Lauren Goldstein and her guest Kathy Svetina explored the critical role of Fractional CFOs in guiding businesses toward prosperity. Kathy is the founder of NewCastle Finance, which offers Fractional CFO services for growing businesses. 

She shared valuable insights and practical strategies on how you can strengthen your business finances and foster long-term success. With her expertise, you’ll gain a clearer understanding of your current financial situation and how to steer your business toward sustained growth and profitability.



Key Insights from The Biz Doctor podcast

04:23 On-demand strategic financial guidance with a Fractional CFO 

09:06 Shifting from reactive to proactive business planning

10:45 Minimizing financial risks with Your Fractional CFO

29:16 The Healthy Financial House™ Framework

33:09 Long and short-term seasonal financial planning


On-demand strategic financial guidance with a Fractional CFO

Having a Fractional CFO on board provides numerous benefits for your business. These professionals bring expertise in financial planning, budgeting, and forecasting, to help you hit both your short and long-term financial goals. By offering strategic guidance, Fractional CFOs empower businesses to overcome challenges effectively and seize growth opportunities.

They also play a crucial role in financial management. Fractional CFOs complement the data-gathering and financial reporting work of accountants and bookkeepers by using their output as the foundation for informed decision-making and strategic financial planning.  They help businesses set clear financial goals, develop realistic budgets, and monitor performance against benchmarks. Additionally, Fractional CFOs contribute valuable insights during strategic planning sessions, guiding businesses toward sustainable growth.

“There is a benefit in having someone who has worked with a lot of industries; they can pick up the good and bad from other industries and see what makes sense for your business, what you should be doing and what you shouldn’t be doing.” – Kathy Svetina (14:27)

Shifting from reactive to proactive business planning

Planning is good for any business, but what’s even better is proactive business planning versus reactive. Reactive planning often leads to short-term fixes and missed opportunities for growth. However, proactive planning involves anticipating challenges, setting clear goals, and developing strategies to achieve them. 

By prioritizing proactive planning, businesses can stay ahead of the curve, make informed decisions, and position themselves for long-term success. This approach allows for better resource allocation, improved financial stability, and greater adaptability to market changes. Ultimately, proactive planning empowers businesses to navigate uncertainties with confidence and seize opportunities for growth.

Minimizing financial risks with Your Fractional CFO

Fractional CFOs excel at identifying and assessing potential risks within a business. Through thorough analysis of financial data and market trends, they proactively anticipate risks before they escalate. This forward-thinking approach enables businesses to implement mitigation strategies early, effectively reducing the impact of potential financial threats.

On the other hand, a crucial component of risk management lies in establishing robust internal controls. Fractional CFOs collaborate closely with a business owner and their team to develop and implement processes that safeguard financial assets, prevent fraud or mismanagement. By ensuring that financial transactions are executed accurately and transparently, these controls effectively minimize the risk of financial loss.

Additionally, Fractional CFOs help businesses develop contingency plans for unforeseen events. Whether it’s a sudden market downturn or a natural disaster, they assist in creating resilience plans that enable businesses to adapt and thrive in challenging circumstances.

Overall, Fractional CFOs provide invaluable support in minimizing financial risks and ensuring the long-term financial health of businesses. Their expertise and strategic guidance empower businesses to address potential challenges effectively, positioning them for sustained success.

“Focusing on cash, sales, costs and trying to predict where you’re going to be in the next couple of months, in the next year or 2 – that is the embodiment of financial planning for your business in the simplest terms.” – Kathy Svetina  (24:46)

The Healthy Financial House™ Framework

At the core of every successful business lies a sturdy financial foundation, much like the structure of a house. Introducing the Healthy Financial House™ Framework, a comprehensive approach to financial management conceptualized by Kathy Svetina and designed to support businesses in achieving long-term health and sustainability.

Overview of the Healthy Financial House™ Framework

The Healthy Financial House™ Framework is made up of five parts, each with an important role in making sure your business will grow and is financially stable.

Your Financial Data: Your Foundation

The first piece of the framework is the data gathered and reported by your accounting and bookkeeping processes. This serves as the foundation of your Healthy House, and it should be accurate and timely to help you make informed decisions. 

Financial Analysis: Walls of the House

The second piece of the framework is financial analysis, which forms the walls of the financial house. This part is all about combing through and dissecting financial data to uncover any insights and trends that guide strategic decision-making. 

Financial Systems and Processes: Interior Design

The third piece of the framework is financial systems and processes, or the interior design of the house. When you have systems and processes in place, you make sure that all the financial information you have is captured accurately and efficiently. This includes using the right tools so that it gives you all the information you need in the best way possible.

Financial Planning and Strategy: Roof of the House

The fourth piece of the framework is financial planning and strategy, or the “roof” of your financial house. This part involves setting goals, creating budgets, and developing long-term strategies to drive business growth. 

Internal Controls: Alarm Bell of the House

The final piece of the framework is internal controls, acting as the alarm bell of the financial house, helping you safeguard your business against fraud. Kathy Svetina highlights the significance of internal controls, stating, “Having those internal controls is really important… You need someone to do oversight for it.”

The Healthy Financial House™ Framework provides businesses with a structured approach to financial management.  By implementing each component effectively, businesses can identify opportunities and risks, drive strategic growth, and protect against fraud and mismanagement.

Long and short term seasonal financial planning

To lay the groundwork for the financial success of your business, set time aside to plan and budget for both the long and short term. If you’re not sure how to proceed, think about planning in terms of the changing seasons, such as Spring and Fall financial planning sessions. 

As spring approaches—typically in March, April, and May—take the opportunity to make long-term strategic plans. During springtime, start thinking about where you want your business to be in the next three to five years and of course, how you’ll get there

Fall, on the other hand, is ideal for focusing on short-term planning, when you can refine your immediate plans and strategies for the upcoming year. Assess your current financial position, identify areas for improvement, and implement adjustments to enhance performance and stability.

By incorporating both short-term and long-term planning into your annual calendar, you can guarantee that your business stays proactive rather than reactive. Having a proactive mindset and approach fosters growth and steers your business towards your desired destination. So, mark your calendar, and start thinking strategically about your business today.

Summary

  • Fractional CFOs provide expertise in financial planning, complementing the work of accountants and bookkeepers.

  • Proactive financial planning will help anticipate challenges and adapt strategies for long-term success.

  • Fractional CFOs identify and minimize potential risks within a business, making sure of its long-term business health.

  • The Healthy Financial House™ Framework offers a structured approach to financial management.

  • Incorporating short-term and long-term financial planning into your annual calendar will almost always guarantee that you, your employees, and the business as a whole will adopt a proactive mindset from the start.

If you’d like Fractional CFO support for your growing business, click here to schedule a consultation.


Transcript

Read More
Table of Contents