You’re a business owner, and your days and evenings are busy. But come Sunday afternoon, you’re off the clock. Kicked back in your recliner with your favorite snacks and the remote, you are tuned in to watch your favorite football team.
This is all about the similarities between the financial management of your business and football. It’s not that it’s a challenge to understand any part of your business without a football analogy; it’s just that it’s more fun that way. And now you have an excuse to throw back some nachos or a good stadium hot dog during the workday.
Let’s take a look at some ways that football is a lot like managing your business finances:
Everyone Knows Who the Quarterback Is. In your business, do you know who is calling the plays? When it’s a game of football, everyone on the team knows to look to the quarterback to see where they should expect the pass to go. Or are you heading out to the line of scrimmage, watching your teammates make false starts because nobody’s head is in the game?
As the business owner, you are calling the plays, but your calls need to be informed by expertise from your CFO. They will know what you need to do to win the game, like a good offensive coordinator.
Use Your Huddle. Your monthly financial reporting is like a football huddle. Everyone needs to know where things stand and where they are going. Consider just one piece of your financial reporting: your cash flow statement. It tells you whether you can cover your current financial obligations, as well as helps you spot trends in overspending or areas where you could have an opportunity to invest.
In this monthly huddle, you remind your managers of areas you are watching, such as where you could drive efficiency measures to reduce spending. You also review your income targets and compare them to your Income Statement to see how you’re faring.
Your CFO will provide solid financial reporting, along with insights into how your
business should respond to emerging trends or capture an opportunity. They may recommend that you secure additional financing or cut expenses. These monthly “huddles” ensure you reach your objectives for the year.
Don’t Change the Channel for Halftime. Maybe on Sunday afternoons, you use halftime to click over to watch another game, particularly as you’re getting closer to the Super Bowl. You’ve got to see how things are shaking out across the country.
With your business, things are a little different. You’re not going to want to check out at the midpoint of the year. Instead, make note of how your key performance indicators (KPIs) are shaping up and whether you need to explore alternative strategies to improve on any of them.
You should also examine your cash flow statements and whether there are any noticeable trends in either income or expenses. Are there areas where you need to change course to reach your goals for the year?
Maybe it’s time to bring in additional advisers to get their insights, just like in football they need to hear what J.J. Watt has to say. Your CFO might see areas where it may be helpful to consult with a tax accountant or talk with an attorney before bringing on a particular partner you’ve been considering.
Think About Special Teams. When you need that additional point or a solid start to the game, your talented special teams can help maximize your success.
Even if you have in-house accountants or bookkeepers, outsourcing your CFO services can be a valuable addition to your business team. When there are opportunities for additional investors to come on board or for your company to expand your business with a new location, equipment or talent, a CFO provides the insight and expertise to guarantee it is the right play at the right time.
Don’t Forget About Defense. Good defense wins football games. You need to know what the other team is likely to do so that you can watch for them and intercept the ball, tackle the receiver or sack the quarterback before he even throws the pass.
Your business needs the same kind of attentiveness to risk. You need to know where there is exposure to your business, whether that is in an area like compliance or too much debt being leveraged. The expertise of a CFO helps you avoid decisions that put your business at risk and identify areas that may be making your business vulnerable. Your CFO will help you prepare for economic downturns, diversify investments and take other steps that minimize your risk.
You’ve Got to Have a Playbook. Your business needs a solid financial strategy, a playbook of sorts that guides your decisions using solid financial reporting. This strategy will offer clear parameters to help you make informed choices for your business:
· Whether to outsource a service or keep it in-house
· Determining if it’s time to invest in more equipment for your manufacturing line
· Deciding if you should seek out a loan to finance an expansion
· Assessing whether you are adequately financially prepared for a data breach or natural disaster
These are all scenarios that are better handled with clear information from a set of financial reports prepared by your CFO.
Prioritize Progress. Football teams are constantly learning new ways to maximize their effectiveness, from strength training and workouts to rapid recovery from an injury. Technology keeps improving and coaches introduce new plays. There’s no room for a player that doesn’t have any interest in improvement.
Your business should be forward-thinking, as well. Watch for ways to adapt and change to better respond to current business conditions. Your CFO can help you determine which changes are important for you to implement for business success.
Finally, Celebrate Your Wins. Maybe you won’t have millions of spectators, watching you accept a trophy from their stadium seats or on their televisions, and there may not be a parade the next day, but your wins are worth a celebration. Maybe even a bit of confetti.
Let The Power CFO be your financial planning quarterback. By calling the right plays and audibles, watching film, reading defenses, and rallying your team, we’ll help you reach your financial endzone in no time, so you can break out your touchdown dance.
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