Notes From the Lab | October 26-30

This week in the How to CEO for Female Entrepreneurs program, we had Money Week. Financial expert and CFO for Kris Plachy Coaching Group, Emily Sandberg, taught our live class and was kind enough to lead two of our Application Office Hour sessions.

Financial topics discussed include the difference between a bookkeeper, CPA, and CFO and how to know when you need which, how to utilize your company culture to make your company more profitable, and how to set projections that benefit your business.

Not all of the topics from this week are financially focused, however! We also tackled what to do when you feel scattered from pressure and Michelle Arant coached a client through talking to an employee in a non-emotional way while seeing red.

Bookkeepers, CPAs, and CFOs.

What do they do, how do you know when you need them, and how do you find them when you do?

Bookkeepers: Bookkeepers do all of the collecting and reporting. They keep track of your transactions, though they generally do not help you interpret them. Some bookkeepers will help you prepare your taxes, though not all will.

Certified Public Accountants (CPAs): CPAs will help you prepare your taxes and help you plan and reach your financial goals. Some CPAs will also assist you with your bookkeeping, though not all will.

Chief Financial Officers (CFOs): CFOs work as consultants. They take the data from your bookkeeping and use it to help you create forecasts and plan for the future. CFOs can interface with your accountant, provide guidance, and help answer your financial questions.

These roles will not always be clear-cut. Some financial professionals will be as integrated with your business as you want them to be, while others strictly offer specific services. You also do not need to choose between any of these professionals; it's always good to have multiple pairs of eyes on your books. Your goal should be to have a holistic financial team, whomever you employ, that works for you so that you are not the one directing the system.

How do you know when it's the right time to hire a financial professional? Well, if you're considering it then it's probably not a bad idea. As the CEO of your company, you have better things to worry about than tracking your finances and it's always better to have these systems in place sooner rather than later. Try it out for a few months and, if you end up not needing it, you don't have to continue receiving the service.

If you are looking for a financial professional, it's always best to ask your current bookkeeper, CPA, or CFO if there's anyone that they recommend. You can also check to see if your local CPA Society or Chamber of Commerce has a referral network. If you use the Profit First method, you can visit the website to find a Profit First Professional near you.

Utilizing Your Company Culture for Profit

One client came to Office Hours and told Emily that she wants to make her manufacturing company more profitable. She knows that one of the reasons her company isn't as profitable as she would like it to be is a breakdown in efficiency--work is being completed too slowly and too many things are having to be redone.

Her company embraces the motto "take the time to do it right the first time," but she's struggling to enforce it. Emily suggested that she make her efficiency standards part of her company culture. If she is able to track how long it is taking for things to be produced, then she can share her efficiency standards with the team and create a bonus system for when these standards are consistently being met.

Generally, team members like having responsibility and like having clear goals that they can work towards. This is one of the reasons that Emily is such a proponent for being transparent with your team about your numbers and your goals. Bonuses also don't have to be strictly financial. If you are looking to increase profitability, try to think outside the box and think of a non-monetary way that you can reward your employees.

Setting Projections That Benefit Your Business

First of all, do you really need to make projections for your business?

No.

Try not to get caught up in what you think you "should" be doing or what you see other business owners doing. If you haven't been making financial projections for your business, you've been growing, and you're happy with where you're at, you absolutely do not have to make them going forward.

Likewise, if you do decide to make financial projections for your business, make sure that they benefit YOUR business. Your projections should be motivating, exciting, and they should make you happy. So if a certain projection is causing you stress or anxiety, don't be afraid to lower it or push back the date.

One thing that Emily regularly implements with her clients is "Best," "Middle," and "Worst," goals. This gives them something to shoot for but also takes away some of the pressure of having to achieve it because there's already a back-up plan in place.

When Things Happen That Are Out of Our Control

If 2020 has taught us anything, it's that we can't control everything that happens in our business. There can be a global pandemic that forces your company to work remotely, employees can quit, large clients can be late on payments, cards can get declined... You get the picture.

And often when these things happen, we get a thought in our head that "This is not how this is supposed to go." We don't think that these things happen to successful business owners and we start painting a picture of what we think owning a business is supposed to look like: bills are always paid, there's always a contingency plan, people rarely quit, there's always money in the bank account, etc.

Then we put pressure on ourselves, telling ourselves things like "I need to pull it together," "I need to get a handle on things," "I need to fix it," and "I need to do better." But that pressure often scatters us and makes it even harder for us to accomplish anything.

We attribute the scattering to the situations that we're in, but it actually comes from the pressure that we're putting on ourselves and the thoughts that we're having. There are plenty of things that we will never be able to control in our businesses, but we can control our thoughts.

Take a few days to notice when you start to apply pressure on yourself, and then start to look at the circumstances surrounding that pressure. Are there any patterns? Focus on what you are able to control in those situations. Often, the solutions to these problems are much simpler than we realize, we are just unable to think strategically when we're consumed with so much pressure.

Approaching an Employee When You're Seeing Red

This week, one of our clients came to Michelle with a challenge that most female CEOs will probably be able to relate to. An incident had occurred within her company and she knew that she should not be emotional while confronting the employee about it, but the situation had her so upset that she was seeing red and didn't know how to calm herself down.

Not an easy situation to be in but, like most things, the best way to master it is by practicing. Michelle advised her to go back to that feeling, recognize it, and practice interrupting the reaction. She also stressed the importance of visual cues and recommended that the client put a sticky note on her desk or monitor that says "Pause. Breathe." Sometimes subtle reminders are all we need to bring us back to reality and show up the way that we want to show up.

Of course, it may not always be possible to go from boiling mad to calm, but you can go to a place of neutral. Michelle suggested another interrupting thought that she likes to practice: "This is not the time for this." Having a thought like this gives you permission to still be upset about the situation, but it also helps you recognize that your anger can wait.

For this client in particular, Michelle's coaching also allowed her to identify what was triggering her anger. She was worried that her employee's mistake was making a large client lose trust in her company, and was feeling embarrassment, fear, and a lack of trust as a result. Michelle helped her realize that she was actually more upset about her feelings surrounding the result of the mistake than about the mistake itself. Michelle advised her to focus on the actions of the employee during their conversation, to help her keep her emotions at bay.