The document discusses the importance of cash flow and infrastructure for businesses. It outlines 4 stages of a company's cash flow from infrastructure creation to potential outgrowth issues. The final sections provide advice on avoiding the "danger zone" of having cash needs exceed available cash through proper planning, reporting, and focusing on sales generation rather than day-to-day operations.

1. Ca$h Flow
The Lifeblood
of Your Business
Infrastructure, Cash Flow
& Corporate Health
Chris James
Partner
B2B CFO®
972.955.5743

2. Cash… the Lifeblood
What’s Your Pulse?

3. Unofficial Organization Chart
• Finders – owners, future
thinkers, relationship builders,
risk takers
• Minders – historical view,
lives in past, desires order,
resists change
• Grinders – live for today,
non-dreamer, non-delegator,
the doer

4. 4 Stages of Cash
Stage 1: Infrastructure Creation
Owner’s Activities
• Building relationships with customers
• Creating relationships with vendors
• Delegating tasks to employees or associates
• Causing sales and cash to come into the company

5. Stage 2: Infrastructure Peak
The result of Infrastructure Creation is Infrastructure Peak
• Few customer complaints
• High customer service
• Low overhead
• Company runs “lean and mean”
• Short cash collection cycles
• Personal sacrifice by the Finder

6. Stage 3: Outgrowth
Result of running lean is burn-out of owner and employees
Attitudes change, owner thinks:
• “I should have a raise”
• “We need more people so we can take time off”
• “We need a better building”
• “I need a new car/house/vacation……”
• “We should buy more equipment or inventory”

7. Needs Change During
Outgrowth Phase
Heightened Need For Infrastructure
• Cash Flow Forecasting, Budgets, Goals
• Expense Control
• Policies and Procedures
• Employee Training
• Management Expertise
• Planning – to Avoid “The Danger Zone”

8. During Outgrowth
Needs of a Finder Change
FOCUS ON THE PAST FOCUS ON THE FUTURE
• Historical reports should • New Tools are Needed to
be used to identify Ensure Financial Stability
• Trends & Growth
• Baseline (KPI’s) •Budgets
• Areas for •Cash Flow visibility
improvement •Strategic Planning
•Experienced Managers
•Flash Report
The Finder is a visionary who knows that yesterday
cannot be changed, focus is on the future while applying
the knowledge gained in the past

9. Business Styles
PRO-ACTIVE RE-ACTIVE
you drive the business the business drives you
• Weekly Flash • Poor Visibility
• Cash Flow Visibility • Putting Out Fires
• Process Improvement • Lack of infrastructure
• Creating opportunities • Long hours
• Setting goals • Lack of clear goals
What’s Your Pulse?

10. Re-Active Organizations
•Lack of appropriate infrastructure
•Cash problems
•Fire fighting mentality
•Long Hours
•Customer Service problems
•Lack of goals
•Frustration sets in
Due to these issues and staff limitations
…the Finder shifts towards being a Minder,
Working IN the business rather than ON the business

11. The Result ?
The Danger Zone
The Danger Zone is created when the cash
needs of your company far exceed the cash
available to meet those needs

12. Danger Zone
Potential Outcome
• Loss of current and future customers & vendors
• Damaged business relationships
• Lost enthusiasm or energy of the Finder
• Damaged relationships with family members
• Death of the dream of the founder
• Death of the company

13. Avoiding the Danger Zone
• Leave Minding activities
to other capable persons
• Weekly Status reporting
(keep your finger on the pulse)
• Timely and Accurate
financials
• Sales or cash? – let
others find the cash,
Finders need to generate
sales with good margins
& set goals

14. Rescuing the Finder
from The Danger Zone
• Stop trying to solve all the problems
• Rely on others for Minding
– Find someone who is good at it
– Bring in someone the Finder can trust
• Return the focus to finding new customers
• Refocus on product and market factors
• Create a reporting system that measures the Pulse
of the business
– Meaningful financial and performance reports
– not Quickbooks/Peachtree standard formats

15. Reports for Finders
Forward looking
Sales by Month
Dashboard
300000
250000
200000
Plan
Sales
150000
Actual
100000
50000
0
1 2 3 4
Period
Analytics
Sales per Employee
Plan per EE Actual per EE
6,000
5,000
4,000
3,000
2,000
1 2 3 4
Period

16. Reports for Finders
Ca$h Flow Model

17. Cash Flow Forecast
Why Companies Fail
Cash Out exceeds Cash In
Finder is drawn into Minder duties
The plan was to grow but lack of
planning results in:
Poor Management
Overspending
Surprises Firefighting
slow vendor payments
& time spent seeking new vendors
poor morale turnover
poor collections
poor customer service
loss of customers
FORECASTING alerts you to possible
future problems and allows time to:
•investigate alternatives & take action
•find additional funding
•improve performance
•Survive & Grow

18. The Economy
Danger Signs
• Prompt payers begin to slow
• Orders decrease
• Bad Debt will increase
• Surprise order from new customer
(prior vendor shut them off due to non-payment)
• Employee Fraud increases
Planning
• take advantage of the 2008 Economic Stimulus
Package to reduce tax liability
• run Lean, cut costs now
• surround yourself with experienced advisors
• know your cash balance and projected cash balance
• "In a true crisis you are managing cash, not managing the
numbers… In a turnaround situation, there is no cost that
is fixed." - Bettina Whyte, Advisory Board Chairman,
Bridge Associates

19. Survival & Growth
• Surround Yourself With Talent and Information
• CEO & Business Roundtables
• Flash Reports
• Budget vs. Actual reporting
• Seasoned professionals you can trust
• Forward looking (realistic) projections
• Identify & Take Action
• Company Strengths and Weaknesses
SWOT Analysis
• Employee Strengths and Weaknesses
let competitors hire your weak employees
• Customer Strengths and Weaknesses
will they weather the storm
• Vendor Strengths and Weaknesses
establish 2nd sources
• Be a Finder
• Build an infrastructure that allows you to be a Finder
• Find the right Minders
• Visit customers, maintain excellent relations
• Impart your vision to the staff
• celebrate successes
and keep your finger on the PULSE

20. Chris James
Partner
972.955.5743
cjames@b2bcfo.com
www.b2bcfo.com