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Thriving in the New World Guardian

Thriving in the New World Guardian

Thriving in the New World requires a CFO to expand their Guardian role for the organization.  The CFO must see themselves driving the organization’s efforts to harness increasing levels of complexity while embedding behaviours and systems to defend against existing and emerging threats to business continuity.

Organizations of all sizes have relied on their financial leaders to develop internal control systems and financial compliance with taxation and regulatory bodies.  The business owner and key stakeholders will better navigate the future by ensuring their financial leader is accountable for maximising the organization’s overall information integrity and for broadening the compliance framework.

Successfully achieving this broader mandate will require the CFO to elevate their collaboration and partnership with other functional leaders.  Success will also depend on how intensely the leadership team commits to sharpening their ability to convert information into insight.  There are two initiatives your CFO can pursue to create greater visibility of information related opportunities and potential compliance challenges.

Harnessing Digital Transformation

The recent pandemic has accelerated the digital transformation for every business.  Over the past year, it has become clear that companies who want to win must consistently adopt emerging technologies to exploit the opportunities offered by digitization. Businesses who select the right solutions will convert the promise of richer information into higher revenue and lower costs.

It is likely your business is headed towards larger technology investment. Business leaders must, of course, rely on their technology advisors and their market oriented leadership to drive digital transformation; however, the contribution of the CFO should not be overlooked.   Owners and CEOs should seek to pair their technology advisor with their financial advisor to ensure the technology selection process is sufficiently thorough and holistic.

Decision makers often desire greater amounts of information; however, there is no guarantee it leads to better decisions.  For most organizations, their finance teams have the most experience in digesting large amounts of information and structuring it to make recommendations.   Fostering collaboration between finance staff and your digital marketing leaders will promote more streamlined, more accurate, more actionable information.

Creating a Compliance Culture

The reality is that discussions regarding “compliance”  are low on the excitement list for most individuals, and almost certainly not the driving force for most CEO’s or owner operators.   For finance and operations teams, compliance may not be their primary passion; however, their functional success links directly to processes that ensure compliance requirements are visible and achieved.    The challenge for compliance in a post pandemic world has grown. Workers remotely accessing business systems and confidential data puts greater pressure on protecting customer information and maintaining adherence to internal practices.

It is no surprise that the first step to creating a compliance culture begins with the leadership team. For many business the choice to task the CFO to take on compliance culture responsibilities will reinforce to employees the organization’s commitment to a disciplined overall compliance framework.  Your CFO should bring a compliance mindset to the organization. Equally importantly, they should bring proven methods to establish compliance systems.

Once the initial building blocks of leadership commitment and senior level accountability are established, the CFO can work with their colleagues to put in place three additional elements that have proven effective in financial compliance.  These elements are Visibility, Review and Corrective Action.   These three elements have been essential for every finance leader to demonstrate a reliable compliance framework to tax authorities, regulatory bodies, and financial stakeholders.

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Fear Of Seeking Funding Might Stop You From Growing

What Ancient Rockers Can Teach You About Making A Profit

At an age when they should (or we just wish they would) hang up their leather trousers and retire disgracefully, more and more ancient rockers are embarking on yet another tour.
This year alone, the Rolling Stones (of course!), Madonna, The Who, Neil Young, Rod Stewart, Pearl Jam, Queen and even Ringo Starr are performing on stages around the globe. Given that many of them are nearing or way past grandparent-age, you might wonder why they’re still bothering so many years after their first taste of fame.
The performers will say it’s because they love it and that they ‘don’t want to let the fans down.’ But there’s another hard-nosed reason to get their weary old bones back on the tour bus. And it’s this: touring boosts their profits in a way that digital music sales and royalties can no longer do.
Digital music generates very little return. Peter Tschmuck, a professor at the University of Music and Performing Arts in Vienna told Business Insider’s Rob Wile that the return on investment from selling a digital copy of a song is 12% compared with about 36% for CD’s. That’s before the revenue is shared between various title holders.
“With digital music so freely and widely available, hardly anyone makes money off sales or royalties these days,” reported Mike Rowell in an article for Forbes and Zocalopublicsquare.org.
“Often, these bands seem to approach nostalgic tours as the most expedient way to make bank; choice seats for top acts—Fleetwood Mac, Elton John, the Rolling Stones, and Stevie Wonder—can run in the hundreds of dollars,” he said.
Top concert draws can take home 35% of the night’s gate sales and up to 50% of the money made from merchandise sales sold at the show, according to Forbes’ journalist, Peter Kafka. Their record labels are likely to receive none of that.
That means the stars—including Paul McCartney, the Rolling Stones, Neil Young, The Who and Roger Waters—of what has been billed as a ‘once-in-a-lifetime’ mega-concert this October are likely to receive a whopping payout for their performances. Tickets for the concerts (taking place over two weekends) were snapped up within hours of going on sale and topped a hefty $150 million, according to Billboard sources. Think how many downloads those artists would have to sell to get anywhere near that kind of money!
Singing aside, what can you learn from the likes of Mick Jagger and Keith Richards when it comes to your business?
To focus on the part of your business that brings the most profits. The Rolling Stones could have retired decades ago and waited for the income from album sales and royalties to trickle in. Instead, they made the decision to continue to tour and have generated many millions as a result. In just under three years, for example, the band’s overall concert grosses topped $401 million, according to Billboard.
If you would like to read our brand new report on how companies can greatly increase their profit through detailed analysis of the numbers you can do so by Clicking Here
The following story illustrates why it makes sense to focus on the most profitable part of your business. A major US direct marketing company with over $1 billion in annual sales recently reviewed its database to determine where its profits were coming from, B2B or B2C. At that time, 50% of its sales were to consumers and 50% to businesses. It was shocked to discover that the profits on the business sales were 500% better than those to consumers. Most consumer sales weren’t even profitable even though they represented the majority of customers, transactions, and expenses.
The decision was made to focus on B2B sales. It required a significant turnaround in the business: at that time, the company employed 500 people taking inbound calls from customers and only 100 people making outbound calls to businesses.
The change took two years. By the end of that period, 95% of its sales were to businesses and only 5% to consumers. Sales flourished. They had been growing at 21% before the turnaround but by the end of the two years averaged 50%. Profit growth was equally dramatic.
So what can you do to boost your profits besides cutting costs? For a start, identify your most profitable customers and then do everything possible to increase sales to that segment of your business. Focus on attracting more customers like them.
Fortunately, it’s not something you have to do alone. A part-time CFO or Finance Director (FD) will help you to accomplish a more profitable company with less stress and hassle than if you were to try to do it on your own. You can watch our 3 minute video here which explains the part-time CFO/FD model.
Make it easy on yourself: book your free one-to-one call with one of our part-time CFOs now to learn how your company can become more profitable. Just click here now.

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