Podcast: Women Thriving in Business
Episode # : 703
Host: Nikki Rogers
Episode Guest: Kathy Svetina
Watch It Here: https://www.youtube.com/watch?v=HcXnlYMN-pw
The “Women Thriving in Business” (WTiB) podcast serves as a platform where inspiring women entrepreneurs share their unique stories and accomplishments. Host Nikki Rogers curates insightful conversations that offer a holistic view of the business landscape, which includes all the highs, lows, challenges, and triumphs that define her guest’s entrepreneurial journeys.
About this episode
If your goal is to grow your business beyond the million-dollar mark, you need to pay attention to the numbers that matter and you can do that with strategic financial management.
This is because to build a thriving business, the only path to success is to master financial management. Neglecting your finances can jeopardize your business instead of helping you make informed decisions for the future.
In a recent episode of the “Women Thriving in Business” podcast hosted by Nikki Rogers, Kathy Svetina had the privilege of taking part in a conversation that broke down exactly why financial analysis matters and what business owners like you need to do to build a financially healthy and sustainable business.
Table of Contents
Key Insights from the Women Thriving in Business Podcast
8:50 When to Bring in a Fractional CFO to Accelerate Business Growth
11:25 Common Challenges for Growing Businesses Seeking Financial Guidance
17:19 What Women Business Owners Can Learn from Fortune 500 Financial Practices
20:47 7 Financial Management Steps To Take to Boost Your Business
25:26 What Sets Seven-Figure Revenue Businesses Apart
You really need to have that foundation of bookkeeping and accounting so that you can build on top of it and make those good (financial) decisions.” – Kathy Svetina (17:46)
When to bring in a Fractional CFO to accelerate business growth
If you have plans of significant growth in the future within the next 2 years, you need someone to help you put that structure in place because the beginning stages are the best place possible to start building the right financial foundation that will support growth.
If you are a startup and now have investors, it’s good to have someone there who can actually help you have conversations with your investors and that help you produce the right type of documentation.
And even if you’re a business owner who is not growing at a significant pace or if you don’t have investors, you can still benefit from a Fractional CFO, especially if you have management questions that are beyond your accountant and bookkeeper‘s expertise to answer.
“Make sure that you have the right processes – if you don’t have it in your business, in your finances, you’re losing a lot of money because of the inefficiencies that you have.” – Kathy Svetina (18:33)
Common challenges for growing businesses seeking financial guidance
When businesses seek help or assistance from a Fractional CFO, most are dealing with issues related to profitability and cash flow. For example, they may be struggling with either profit without cash or cash without profit. Many are also confused by their accounting practices which affects any financial analysis.
There are also business owners who, in the process of expanding, need help drafting compensation plans for new hires or want guidance on how to improve operational efficiencies, including budgeting and forecasting.
Then finally, some need help creating accurate financial forecasts and budgets or are looking for the deeper insights and solutions for financial growth and long-term planning only found with a strategic financial management plan in place.
“If you need to understand something, have that conversation with your accountant or your bookkeeper and ask them what’s happening. Don’t be afraid to have those conversations.” – Kathy Svetina (22:08)
What women business owners can learn from Fortune 500 financial practices
Instead of separate pieces of data or things to analyze or accomplish, think of your business finances as a structured Healthy Financial house.” This will give you a holistic view similar to what Fortune 500 companies practice.
Establish a strong financial foundation through accurate bookkeeping and accounting.
This will ensure that your data is relevant and useful to help gain insights via your financial reports (income, cash flow and balance statements).
It’s also important to plan out and optimize all your systems and processes so that you are managing your resources efficiently which will greatly help the financial health of your business.
Implementing budgets and forecasts to guide decision-making is also helpful, especially if done with an eye on growth and sustainability. And finally, prioritize implementing internal controls to safeguard your business assets.
“When you look at your financial statements, don’t just look at the current month, but the trend over the last year to see where things are going. Don’t be afraid to dig around and be curious.” – Kathy Svetina (22:53)
7 strategic financial management steps to take to boost your business
Here are some basic, immediate, and actionable steps business owners, specifically those who avoid their finances can take:
- Ensure monthly updates of accurate bookkeeping by a professional.
- Review and understand financial statements, including P&L and balance sheet.
- Analyze trends in financial statements to identify areas of concern.
- Examine cash flow and accounts receivable aging for better cash management.
- Utilize financial analysis software like Fathom or Spotlight Reporting.
- Take initiative to learn and engage with financial insights.
- Seek guidance and advice from financial professionals when needed.
“Everything you do in your business eventually shows up in your numbers – in terms of sales, customer retention, and referrals. It’s all really relevant.” – Kathy Svetina (28:05)
What sets seven-figure revenue businesses apart; strategic financial management
Reaching seven figures is a major achievement for a business owner so congratulations! Not everyone hits this milestone, and there are several factors that differentiate businesses who grow to this level and beyond, and those that don’t.
It starts with offering a service/product that is aligned with market demand. And once that is established, they employ effective advertising that resonates with the target audience. Businesses that properly price their products/services to ensure profitability are already ten steps ahead of the competition.
But the major differences are even more evident after the initial growth, when the focus of successful companies shift to team building and delegation. These business owners recognize that developing efficient processes and systems, including strategic financial management, becomes crucial for growth.
It ensures consistent customer experiences and greatly impacts brand reputation and customer retention. They start to plan, organize and even “clean house” because they know that chaotic and scattered business operations are a major roadblock for a company currently expanding or scaling operations.
We can even break it down further
- Between $1,000,000 and $5,000,000, businesses need to refine processes.
- Beyond $5,000,000, businesses can be more selective in clientele.
Overall, while the growth journey of every business can be challenging, it is important to overcome it, and this can be done with the help of strategic financial planning and analysis.
How to implement strategic financial management in your business
- Hiring a fractional CFO is vital for facilitating business growth, ensuring financial structure, investor interactions, and handling complex management issues beyond basic accounting.
- Growing businesses seeking a fractional CFO often struggle with aligning profitability and cash flow, addressing accounting confusion, optimizing operations, and strategizing for long-term financial growth.
- Learn valuable lessons from Fortune 500 companies by viewing your business finances as a structured “Financial house,” encompassing accurate bookkeeping, optimized systems, strategic budgets, and internal controls for enhanced financial health and insights.
- Small business owners can enhance financial management by maintaining accurate monthly bookkeeping, understanding their financial statements, optimizing cash flow, and seeking professional guidance when needed.
- Successful businesses prioritize market-aligned products and services, effective advertising and pricing strategies, streamlined processes, strategic planning, and financial analysis for sustained growth.
About host – Kathy Svetina
Kathy Svetina is a Fractional CFO for growing women-owned businesses with $3M+ in annual revenue.
Clients hire her when they’re unsure about what’s going on in their finances, are stressed out by making financial decisions, or need to structure their finances to keep up with their growth.
She solves their nagging money mysteries and builds a financial structure with a tailored financial strategy. That way they can grow in a financially healthy and sustainable way.
Kathy is based in Chicago, IL and works with clients all over the US.