Luckily, that is not my situation

However, we are pursuing bold goals and the risk of loss is high.  In order to start your own business, you have to take on risk.  When you hire your first employee, that’s even riskier.  The bigger you get, the greater the rewards, but also, the greater the risks.  Operating a business at these dangerous levels calls for fool-proof planning and rapid execution.

Raising funds is surreal.  You must tell people you are raising money in order to raise money, but you need to be careful not to violate securities law by telling the wrong person the wrong stuff.  You need to share secrets in order to attract attention, but what if they steal your ideas and try to compete?  Patents and NDAs are only as powerful as the attorneys you hire to enforce them.

Here is the new concept we are launching:

Not every CEO has financial savvy and expertise. According to www.businessinsider.com ,

• 33% of the S&P 500 CEOs’ undergraduate degrees are in engineering

• Only 11% are in business administration

• Only 15% of CEOs came from a finance background

The CEOs of most small businesses only have a cursory understanding of finance and accounting.  The CEOs who do understand finance rarely have the time to spend managing this aspect of the business.  After all, aren’t sales and operations significantly more important? Therefore, the tasks of accounting and finance are often delegated or neglected.

When this need arises, CFOask is the solution.

 The CFOask Solution – Unlimited CFO Support for $50 per Month!

• CFOask is a software-as-a-service (SaaS), subscription-based online program designed to assist organizations answer complicated accounting questions and manage difficult financial issues. It offers strategic guidance to organizations for a low monthly fee.
• CFOask matches financial experts with CEOs in need of financial and accounting assistance.
• For companies that need more expertise than their internal CFO is able to provide or do not currently have a CFO, CFOask can also provide additional assistance on a when-needed, interim, or permanent basis.
• For companies with a reliable CFO, CFOask offers a way to maximize that investment by providing an additional financial advisory resource to companies and their CFOs.

Our strategy is simple:

1. Don’t worry about people stealing our ideas, share information when it feels right to do so.
2. Operate as if no one will ever invest.  We are planning on launching before the end of the year, with or without funding.
3. Keep moving as fast as possible, without being reckless.  By the time people catch up, we will be light-years ahead of them.  We already have a five year plan…

Will it work?  Will we raise the money we need, will we be required to bootstrap it, or will we crash and burn?  Does conventional business wisdom work?  Stay tuned…

Permission to share: You are more than welcome to use this post however you want, provided you give credit to Ren Carlton and link back to the original post from this website.  

Another fake story which drew national attention recently started as a hacked AP tweet.  The tweet read “Two Explosions in the White House and Barack Obama is injured.”  Once this “news” hit, it sent the markets into a tailspin.  Investors took this tweet at face-value and reacted accordingly to this upsetting news.  After the tweet was released, the Dow Jones industrial average plunged by more than 140 points.  Fortunately, the long-term effects of this drop were averted when the AP released a statement and tweet stating: “The AP Twitter account has been suspended after it was hacked. The tweet about an attack on the White House was false.”  After this, the markets returned to their previous average.

I love social media, but it has its problems.  First of all, I despise misinformation.  Have you ever looked at your parents the same way after you learned the truth that Santa Claus is not fake but actually a corporate mascot for Coke?  And, what about those hackers that steal your social media identity and tell your friends to check out this cool website?

As a paid professional skeptic, I live by the old saying “trust nothing that you hear, and half of what you see.”  Social media is not news or media; it’s just someone saying something without the benefit of a fact-checker (or even a spellchecker in a lot of situations).  Just because someone blogs does not necessarily mean they are qualified or smart (present company excluded, of course).

For some useful information about protecting yourself, check out this link by Lauren K. Ohnesorge.  But don’t trust it…

Linked article by Lauren K. Ohnesorge – Triangle Business Journal.

http://www.masslive.com/business-news/index.ssf/2013/04/twitter_hack_briefly_wipes_200b_from_mar.html

At the time My CPA buddies and I often joked about being a CFO. After all, weren’t we smarter than the CFOs we met when doing audits for business clients? Determined to prove that theory, I started applying for CFO jobs. To my surprise, I received a call back from one of my applications. It was from a business owner whose company was in a bind. His entire management team had left, and he needed someone to attempt to pull his company back together.

We talked for a bit over the phone and then he asked me and my wife to join him and his wife for dinner. We met for dinner as planned, and, by the time it was over, I had the job. He never quizzed me on any aspects of my technical knowledge. He didn’t ask why I had had three jobs in two and a half years after graduating college. The fact that it took me six and a half years to obtain my bachlror’s degree was never mentioned. My evaluation was based merely on personal chemistry and my interpersonal skills.

Similar to entrepreneurship, being a CFO takes a unique set of skills. Technical skills are a starting point. However, using those skills to add value and deliver messages in the proper manner to a wide variety of end users is another matter. After 14 years of being in the CFO staffing and services business, I realize that most financial professionals do not have the skills necessary to be a CFO. Those skills include: strategic planning, forecasting, financing, risk management, and more.

For those looking to make the transition to CFO, join me on May 16th for the first session of the MACPA (Michigan Association of CPAs) sponsored CFO Mastermind Series. In Making the Transition to CFO, you will learn the skills necessary for CPAs and Controllers to become effective CFOs. This session is designed to help accountants let go of the details, focus on the big picture, and become visionaries for their organizations. It is also a great program for CPAs looking to add CFO services as part of their offering. Ren will share insights learned from his first CFO position to help those looking to become CFOs. For more information and to register, visit our website: http://bit.ly/13xjwUW

I am honored to have been nominated for Lawrence Technological University’s 2013 Leaders & Innovators Award.  I recently spoke with WWJ Radio’s Tonja Deegan about my nomination.  We spoke about my favorite hobbies and foods, as well as the direction of the company and the most influential people in my life.  You can read the complete interview on their website: http://bit.ly/ZWcolh

- John Selden, English Antiquarian and Jurist (1584-1654).

“Ignorance of the law excuses no man” implies that you are deemed guilty if you break the law, even if you were unaware of the law at the time you violated it.  Is this reasonable?  How can anyone possibly know all the laws associated with running a business?  Federal, state, local, taxation, securities, and labor laws are only a handful of the endless amounts of rules and regulations a business must navigate.  And then these rulings change often.  Many small businesses simply do not have the time and money necessary to hire the needed attorneys to cover all areas of possible exposure.

Because of this, I am sure startups often unintentionally violate laws.  Since they are so small, they are likely off the radar of enforcement agencies.  But, what happens when these companies grow?  One example of audit statistics states that 17.78% of large corporations (over $10 million) are audited per year, while only 1.12% of small corporations (under $10 million) are audited.  (Source)

Based on this data, the bigger your company is, the more likely you are to be audited.  I assert that the financial risks of operating a business are directly correlated to size.  Fortunately, this is somewhat offset by the financial sustainability of a business model as it grows.  That being said, I would argue unanticipated dangers lurk for unprepared growing business.  That is why financial risk management is so crucial for growing businesses.  What is financial risk management?

1. Keeping you in business

2. Keeping you out of prison

3. Preventing you from being blindsided by unanticipated penalties, fines, fees, etc.

4. Stopping the bank from pulling the rug out from underneath you

5. Going back and fixing past errors without turning you in or dropping everything to manage these problems

 So, if you truly want to grow your business, make sure you are prepared.  After all, fools…I mean entrepreneurs…often rush in where angels fear to tread.

Is the quote “Ignorance of the law excuses no man” by John Selden reasonable today?  I would argue small businesses often, albeit unintentionally, violate the rules.  Is it fair to expect entrepreneurs to know and understand all of the federal, state, local, taxation, securities, and labor laws associated with running a business?

Starbucks has officially endorsed gay marriage since January 24^th, 2012 when its support of the Washington State legislation recognizing marriage equality was officially released. (Seattle Times)  But, all political and religious opinions aside, is this endorsement a good financial decision on the part of Starbucks?  How might Starbucks’ CFO have determined the effects of this endorsement on the company’s financials?

In order for the company’s take such a strong pro-gay marriage stance, let us assume that that the CFO and board of directors were consulted to determine how this position would affect Starbucks’ financial results.  It is very likely that there was a discussion on the effects of this stance on stock prices and sales for Starbucks.  The CFO likely white-boarded and discussed a risk/reward analysis of this decision with the board of directors to determine how this stance would affect the company financially.  It would seem that they looked at the demographic they would alienate by this statement and compared it to the amount of people who would support them as a result of this statement.  If they found that more people would support rather than oppose these views, then the CFO would likely have approved the decision.  In this case, it would have been a good financial decision.  If the opposite was true, then it would not be a good financial decision.

Whatever the actual outcome of such a risk management discussion might have been, Starbucks did endorse the legislation and the CEO did make his reply to a shareholder, clearly voicing Starbucks’ pro-gay marriage stance.  Was this a well-thought out decisions on the part of Starbucks or merely a publicity stunt?  Considering that Starbucks’ stock prices rose by 1.30% from $57.05 on March 21^st, 2012 to $57.80 as of the market close on April 10^th, 2013, it appears the controversial endorsement and the CEO’s comments may have been slightly beneficial (assuming this is the only factor affecting Starbucks’ stock price). (Google Finance)  Perhaps the CFO did indeed have some say on this decision…

What are your thoughts…  Is Starbucks’ stance on a gay marriage a sound financial move for the company?  Or, is it hurting the company financially?

Personally I don’t get gold.  I understand it is a “precious metal,” but you can’t eat it, drive it, etc.  What makes it any more valuable than any other metal out there?  Scarcity?  If the economy truly starts crashing, I doubt you can heat your home with that gold necklace you received as a graduation present.  In my mind, gold is just another Beanie Babies trend; this bubble is just taking a little bit longer to burst.

If my above article did not meet your need for actual data or facts on the subject, the following article may be able to help.

http://investorplace.com/2011/06/gold-prices-bubble-investing-gld-etf/

3 Reasons the Gold Bubble Will Burst

Gold is neither an “investment” nor a contrarian play

After a decade in which stocks went nowhere and the U.S. dollar lost value to every world currency except the Zimbabwean dollar, many Americans are ready to give up on the entire system.  Quite a few already have.

After watching gold more than quadruple in value in the same period, investors might be tempted to wash their hands of financial assets altogether, convert their savings to gold bars, and bury it in their backyards.  But frankly, I cannot fathom a worse idea.

Gold today is as risky as tech stock in 1999 and Miami condos in 2005, and the arguments supporting its rise are every bit as flimsy.  Let’s take a look at some of these arguments and how they stand up to a brief reality check.

Myth #1: Gold is an investment

Let’s start with the very basics.  I would define an investment as an asset that creates value and income over time.  Stocks, bonds, real estate, even livestock and some machinery for businesses would all qualify.   This is in contrast to “speculation,” which is a purchase based purely on the hope of selling at a higher price at some point in the future.

Ben Graham, the mentor of Warren Buffett and father of the investment profession as we know it today, had referred to speculation as the “greater fool” theory. The idea goes, “I know I am a fool to pay such a high price for a stock but I know that a greater fool will come along and pay me an even higher price.”

Graham was speaking of common stocks, but the same argument could be made about condos, Dutch tulip bulbs, or even baseball cards and Beanie Babies.  And it certainly applies to gold.

Gold pays no dividends or interest and produces nothing.  It’s an inert metal that you have to pay to store and insure.  And yes, your ability to profit from it depends on your being able to sell it to someone else at a higher price than what you paid, plus selling commissions and expenses. Is this a bet you’re comfortable making when it has already risen by a factor of four in a matter of years and the trade is looking increasingly crowded?

There is nothing wrong with speculating, of course, if you understand the risk.   The problem comes when you confuse it with investment.  And these days, many folks can’t tell the difference.

Myth #2: Gold is a store of value

Plenty of gold bugs concede the metal is not a traditional “investment,” per se, but argue passionately that its purpose is not speculative.  Instead, it is a store of true value in a world of paper fiat currencies and number games.

Unfortunately, the facts simply do not support this view.

That’s because gold is a great store of value—except when it’s not.   Had you become fed up with the inflation of the Jimmy Carter years and moved your savings to gold in 1980, you would have watched your “store of value” fall by 70% in the two decades that followed.  And this would have happened during a period of persistent (though falling) inflation.

Meanwhile, the raging bull market in gold since 2000 can hardly be considered “stable.”  Sure, no one complains if their purchasing power rises.  But if your stated purpose in buying gold is its role as a store of value, even volatility to the upside should be unsettling.  You can’t just create “value” out of thin air.

For an asset often touted as a “crisis hedge,” gold also performed remarkably poorly during the 2008 meltdown.  Gold went into freefall in September and October 2008 after the Lehman Brothers failure knocked the financial world off its axis.  Not a very effective insurance policy, in my opinion.

Lastly, if protection from the ravages of inflation is so crucial to investors, then why isn’t a piece of productive rental real estate an equally appealing option? Plenty of desperate owners would happily exchange their property for some of that “worthless” green paper. But somehow the idea of buying real estate at depressed prices to hedge against inflation and a plummeting dollar is seen as a fool’s errand, while buying gold at record levels is seen the only safe bet.

It’s easy to point to gold as a store of value when prices are rising. But they won’t rise forever.

Myth #3: Gold is a contrarian trade

This claim is almost laughable, but it wasn’t born in a vacuum.  Some gold bugs have lived on the fringes of the investment world for so long they view themselves as the perpetual voices in the wilderness, as rebels set against the Wall Street establishment.

But today, gold is every bit as mainstream as stocks and bonds.  It’s now on the front page of Yahoo Finance, for crying out loud, and every major city in America is littered with “We Buy Gold” billboards.

Also, American retail and institutional interest in gold has surged via exchange-traded funds like the SPDR Gold Trust (NYSE: GLD), and now Chinese investors are piling into gold via brand-new gold ETFs trading in mainland China.  Gold has even wormed its way into the Islamic banking system.  The Financial Times recently reported that several of Turkey’s sharia-compliant banks have begun offering gold deposit accounts, exchange traded funds and even gold-dispensing ATM machines.

Gold’s popularity transcends nationality, religion and culture — and its price has also moved in virtual lockstep with stocks and other “risk” assets since the bear market bottom of March 2009.  A popular investment that moves the same direction as all other risky assets… does this sound like a contrarian investment to you?

A true contrarian would view gold’s universal popularity as a warning sign.  They might also be concerned by the deterioration of gold’s primary traditional use—jewelry. Consider India has seen a decline in gold jewelry sales since 2005 despite an economic boom, and that worldwide there has been a massive shift away from gold use in luxury goods to gold in “investment” uses in the last decade. In fact, the portion of gold used for “investment” jumped by a factor of 65 from 2000 to 2010.

It’s worth mentioning that the last time this mega-shift towards investment uses happened was 1980—the year the last gold bubble burst.

This bubble will burst soon

I’ll end with two anecdotal signs that tell me the end of the gold boom is nigh:

First, Utah’s state congress rpresented the governor with a bill this spring that aimed to make gold legal tender in the state.  It was a political stunt, of course, since using gold bullion to buy a cup of coffee or even a car is impractical. But when any asset class has become this politicized, investors might want to keep their distance.

And lastly, finally, Ayn Rand’s magnum opus Atlas Shrugged is finally making it to the silver screen.  I admit, the libertarian in me really does like Rand’s work and her unapologetic defense of capitalism. But her work’s fixation on the arcane details of issues — like the role of gold in monetary policy – has long turned off readers.  It is no coincidence that the debut of Atlas comes at a time when gold is at an all-time high, and when such views are fashionable.

The bottom line is that gold’s bull run is based on weak arguments that don’t hold up to scrutiny.  Investors might want to follow Warren Buffett’s advice and move their attention to attractively priced stocks paying reliable dividends.

Or at the very least, avoid the herd mentality that is inflating the gold bubble right now.

Permission to share: you are more than welcome to use this post however you want, providing you give credit to Ren Carlton and link back to the original post from this website.

Even though I do not make a practice of firing clients, there are some core business reasons for firing clients and, should your client fit one of these profiles, this article by Thursday Bram gives advice on how to go about firing that client.  In the end, sometimes it’s just not healthy for the business or the client to be in an unhappy relationship.

Linked article by Thursday Bram.

http://freelanceswitch.com/clients/5-ways-to-fire-a-client/

What if I were to tell you that you can make more money and work fewer hours IN your medical practice?  Does it sound too good to be true?  After reading my article you’ll see how it’s not only possible, but conceptually fairly simple.

The emphasis on the word “IN” in the first sentence is not a typo.  One of the challenges faced by most professional services companies is the fact that these companies are trading hours for dollars. Whether it’s a medical practice, law firm, or CPA, almost all professional service companies have the unique challenge of maximizing the amount of cash they earn for the amount of hours they invest. And because most professional services companies rely primarily on selling time with the owners (e.g. the practicing doctors of the medical practice), this causes a series of interesting dilemmas.

Dilemma #1:  In order to make more money, the doctors/owners have to work more hours.  This is assuming you have the willingness and ability to work the number of hours you need to make the amount of money you want.  Most business owners I know want to work less hours, especially when they get older.  And at the end of the day you can only work so many hours.

Dilemma #2: You have to have a certain volume of patients necessary to work the number of hours required.  Most medical treatments are transaction-based, meaning once you treat a patient the service is complete. Most medical practices do not have a consistent, predictable, and reoccurring revenue stream from existing patients. This means you always have to be hunting for new patients. This holds true even if you’re only trying to maintain your current revenue level.  If you’re looking to grow your practice, this activity becomes even more important.

Dilemma #3: You get paid to work in your practice (e.g. treating patients) not on your practice (e.g. business planning, budgeting).  It’s only logical that most doctors spend majority of their working hours treating patients versus running their business.  The problem is that this leaves the business to run itself, which can be a formula for disaster.

All of this adds up to a very challenging business to operate.  Considering all of the above limitations, how can it be possible to make more money in your practice and work fewer hours? Have no fear fellow professional services provider, I have solutions!

My focus for medical practices is to help them achieve extraordinary financial results.  The main issue that I encounter is that most doctors don’t understand the importance or value of strong financial management.  Sure there are countless successful medical practices, but I would argue that most of these practices leave a lot of money on the table.  Although a lot of what we do is somewhat complicated and requires assistance from an experienced professional, here are a few simple ideas you can implement immediately to help improve the financial management of your practice:

• Delegate as much as possible.  Do you know how much your hourly rate is?  When I say hourly rate, I mean how much money your patients pay you by the hour (if they were actually going to hire you by the hour).  Let’s assume you calculate your hourly rate to be $600 per hour. That means you are capable of earning $10 every minute you spend on something.  If you’re worth $10 per minute, does it make sense for you do anything remotely administrative? It really surprises me that doctors don’t surround themselves with a swat team of support staff, freeing them up to treat more patients and make more money.  In my mind, the doctor’s activities should be limited to only two things, running their business and treating patients.

• Collect the money you have already earned.  In case you haven’t heard, revenue cycle management is the key to every profitable medical-practice. Simply put, it is collecting the money you should be paid for the work you’ve already done.  Most medical practices that fall short in this area fail to realize that this is an ongoing process that begins with client registration and continues throughout the life of the client relationship.

• Spend ahead.  It takes money to make money. In order to be successful, you have to spend ahead. You cannot sell a service you don’t know how to do (at least in this country).  You and your staff need to be properly trained and equipped to do the treatments you’re selling.  So how do you know which areas of your business you need to spend ahead and which ones you should ignore? That’s where business planning comes in…

Is there more? Definitely. But that doesn’t mean you can’t start implementing some of these ideas immediately in order to improve the financial performance of your medical practice, and of course work less hours.

Permission to share: you are more than welcome to use this post however you want, providing you give credit to Ren Carlton and link back to the original post from this website.

http://metromode.com/innovationnews/dynamicadvisorysolutionstroy0289.aspx

Troy-based Dynamic Advisory Solutions adds 10 jobs

Ren Carlton has a goal for Dynamic Advisory Solutions. He wants the Troy-based firm to become the No. 1 provider of CFO services in the U.S.

“Our goal is to go national, instead of relying on work predominantly in Metro Detroit,” says Carlton, president & CEO of Dynamic Advisory Solutions.

The 13-year-old company has been signing up more mass distribution partners for its services. It currently has two out-of-state affiliates in Florida and North Carolina. That sort of expansion has allowed the company to hire 10 people over the last year, growing its staff to 25 employees and the occasional intern.

Dynamic Advisory Solutions has watched its revenue grow by 40 percent over the last year as it lays the ground work to go national. It is now aiming for triple-digit growth in 2013 as it aims to sign up more distribution partners.

“I’d like to have more affiliate partners and more distribution partners,” Carlton says. “We’re looking to have 15 inside and outside of Michigan.”

Writer: Jon Zemke

Permission to share: you are more than welcome to use this post however you want, providing you give credit to Ren Carlton and link back to the original post from this website.