What is a Virtual CFO? At The Mint, we like to sum it up in the words of one of John Travolta’s greatest characters, Chili Palmer from the classic Get Shorty:
“Bo Catlett: Harry called you his associate. What exactly does that mean? I mean, I never heard your name, or read it in Variety, or The Star, or anyplace.
Chili Palmer: It’s what he said, I’m his associate.
Bo Catlett: You must bring something heavy to the deal.
Chili Palmer: I do: me.”
To help readers to fully grasp this captivating analogy, we have prepared the following legend to accompany the above movie quote:
Harry: You, our client
Bo Catlett – Any banker, vendor, potential investor, potential partner, government regulator, tax collector, client, CPA, attorney, or loan shark.
Chili Palmer: The Mint (us) as your Virtual CFO.
Associate: The Virtual CFO.
If you need a CFO, but don’t want or need to pay one full time, we’re here to help.
As your Virtual CFO, we take care of your high level number problems, plain and simple. As an entrepreneur, you know your business like the back of your hand, and you can tell by feel when things are going well, and when they are not.
However, there comes a time when every Entrepreneur begins to panic. They understand that they have generated a flurry of activity in which money changes hands. They may even have a vague understanding of which of their actions are profitable and which ones cost them money, on net, to perform.
The entrepreneur is also painfully aware that their time is limited. In order to take their vision to the next level, they need to know, with absolute certainty, that what they are doing is scalable, meaning that it will continue to be profitable as it expands.
What many entrepreneurs do at this point, in the midst of this all to common panic attack, is to engage a CPA to help with their company’s financial management. The CPA, in turn, begins to bill on the order of $150 per hour as the entrepreneur passes along problems to the CPA that most well trained bookkeepers can handle, or worse, the entrepreneur begins to spend their priceless time mired in the details of the accounting of their organization. Again, a task generally best left to the well-trained bookkeeper.
As the CPA fees begin to mount, the entrepreneur then relents and decides that they need a CFO. They are not certain why, but they believe that this magical individual can help to reassure them that the numbers are working in their favor as well as eliminate their CPA bill.
What the unhappy entrepreneur finds, once the CFO is hired, is that not only has their CPA bill not gone away, but they now have a staff person who, all in, represents between $100,000 to $200,000 USD of direct annual costs and any number of indirect costs as they begin to hire their friends, recommend large investments in accounting software, and create incessant demands on the already overworked and underpaid, above mentioned, well-trained book keeper, the non-key position that it seems always needs to be filled by an expensive recruiting agency by someone who sees it as a stepping stone to their next gig.
As a result, the unhappy entrepreneur is left rolling the dice with the integrity of their financial data and often must resort to hiring an expensive consultant to piece together the rubble of his or her precious financial data, from which they had hoped, before the nightmare of the full time CFO began, to glean useful information from by which to guide their entrepreneurial activities.
There must be a better way.
Enter The Mint’s Virtual CFO service, where we offer all of the benefits of having a CFO, without the high direct and indirect costs, which are often associated with the creation of a position that all too often morphs into a sinecure.
Our value proposition is simple: For $1,000 each month that you engage our services, you and your company receive 10 ours of our undivided attention, with no strings or golden parachutes attached.
What will we do for you in those 10 hours each month? Depending upon your needs, we will take the financial statements produced by your happy, well-trained bookkeeper on a monthly basis and perform one or all of the following:
– Create a detailed ratio analysis in the form of a dashboard containing ratios and other financial metrics specifically tailored to gauge your company’s financial health and forward looking prospects.
– Benchmark your dashboard data against that of your competitors to the extent possible.
– Participate in on-going Strategic Planning.
– Make specific recommendations for improving profitability.
– Perform risk assessments for proposed transactions.
– Perform information systems assessments and oversight for finance, operations, and administrative systems.
– Provide a framework for and assistance in the enterprise budgeting process and create related forecasting activities.
– Create projections of results, cash flow and cash positioning.
– Assess organizational structure and create recommendations for optimization.
– Assess our company’s capital structure and make recommendations for optimization.
– Perform business valuations and financial due diligence for potential acquisitions.
– Review of contracts.
– Create requests for proposals to engage banking, credit, audit, tax, accounting software, payroll software, and treasury management services to ensure you get the best value and a product that works for your company when engaging these services.
– Act as a true, independent advisor.
– Much more.
In short, as an Entrepreneur, we’ve got your back so that you can do what you do best.
What we don’t do:
– Sign contracts on your behalf or act as a direct agent for your company (unless you explicitly request us to and then, only under parameters which you set and are comfortable with.)
– Day to day accounting entry, accounts payable, bank reconciliations, and data entry. This is what you pay your well-trained, happy bookkeeping staff to do at a fraction of the hourly cost of our services.
– Tell you how to run your business. You are still the boss and the one with the most skin in the game, after all!
– Take an equity stake in your company in exchange for services. We work on a fee basis, which helps us to better help you with the objectivity required to act in your best interests. Granting equity stakes, while ultimately being an incredibly expensive way to finance expansion, often comes with the nasty side effect of unnecessary hard feelings and, or, the destruction of your precious enterprise. Tempting as it may be to be to get in on the ground of the next IBM, we generally advise against granting equity stakes unless it is part of a well structured and documented equity financing plan which is crystal clear to all involved.
What if I require more than 10 hours of your time?
We generally work very efficiently and strive to over deliver to every client. At a minimum, you will receive a financial dashboard, benchmarking and ratio analysis, and a brief state of the financial union memo with recommendations and relevant forecasts.
However, if you are contemplating a large acquisition, negotiating a merger, senior debt sale, bond issuance, or restructuring existing debt, converting a software system, etc, we will do whatever humanly possible with whatever time remains. Anything over the allotted 10 hours we bill out at $150 per hour.
We are efficiency freaks, which is good when it comes to numbers and finance, and many production processes (save wine, cheese, and the like). With the proper data, equipment, and communications devices, we can generally accomplish in 10 hours what many CFOs accomplish in a month.
Finally, if you need us to bring something heavy to the deal, we will help you to make sure that the deal is valuable enough to you that our $150/hr fee will be a pittance compared to what is gained by our involvement.
What industries do we serve?
Over the course of our professional career, we have had the good fortune to gain a wide variety of experience in the areas of Accounting, Finance, Information Systems, business valuation, Auditing, and Tax matters for a wide variety of companies, both for profit and non profit, in industries as varied as translation and writing to Health Services, Real Estate Development, Property Management, Social services, and packaging. We have even done a stint in the barricade business.
Intrigued? Contact us today for a free consultation to see if your company would be a good fit for our services. Our joy is in your success.
After all, $1,000 a month is a small price to pay for piece of mind as your business grows. It looks even better when you run the numbers on hiring a full time CFO.