“You all promise to help me grow my profits! But you guys prepare and lodge my company tax return….only! Please! Please don’t sell me this growing your business promises! All accountants are the same, they can do tax and financial statement and that’s it!!”
This is how Lisa, a prospect client, answered me when I tried explaining over a phone call, how can our virtual CFO help her grow her business…. she was obviously furious, and it was clearly not my day!
I replied: “I am sorry you are not getting the help you need, but….” and I was brutally interrupted…
“why are you better than all accountants I dealt with? ha? I have a company vision and strategy but when I asked for help in preparing a budget for this strategy implementation and feasibility studies for the new showroom, non of the accountants could do it!! None of them!” she yelled.
It became clear to me that Lisa’s frustration is because she needed help in financial budgets and managerial accounting studies but she wasn’t getting any… Lisa is in the retail business of home accessories and she was planning to open a new showroom.
In my phone discussion with her, I explained that we can use her previous sales history to understand seasonality andclients sensitivity to discounts and price hikes. We can then develop for her budgets and pricing strategies that can help her unlock new profits.
Lisa signed up for our virtual CFO service and her new plan to open a second showroom materialised successfully. We looked at her stock carrying costs and calculated her stock optimum level required to meet her monthly sales forecast. This saved her heaps of extra storage, insurance and drastically reduced her cost per order. We identified highly profitable products with fast moving turnover and recommended that she imposes sales target for these. We revised her insurance contracts and concluded that she is paying high insurance premiums on big fragile items that were not selling fast enough and recommended to discontinue buying these items. Lisa realised 32% profit increase from her existing showroom in the first 6 months of the virtual CFO engagement. She used the new unlocked profit in offsetting part of her bank loans related to the new showroom. This saved her interest expense and improved her financial position.
Today Lisa owns 3 retail showrooms and an online store for wholesale orders. She is supplying home accessories to major furniture stores in Australia by processing orders straight from factory to retailers without having to pay for storage.
Preparing historical financial statements and filing tax returns will only help you stay compliant with ATO requirements. To grow your profits you need deep analysis of cost, proper pricing and well monitored budget for success.
If you are a smart entrepreneur like Lisa and ready to take your business to the next level, let’s have a chat and see how our virtual CFO services can help you do it.
Schedule your free consultation today using this link: