Services
No two companies are alike, even if they are in the same industry. How their owners deal with problems is similarly unique. As a result, every one of our client engagements is highly personalized. We resolve the specific issues of each business owner by eliminating barriers that are getting in their way and enabling them to meet their individual goals.
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How do we decide which services to provide?
The answer is simple: whichever ones will remove the barriers limiting cash going into the business and reducing business value. Here is our simple but effective three-step process:
1. Preliminary Analysis
After meeting with the owner, we conduct a no-cost analysis of the business and recommend a plan to address the fundamental issues. Included in the proposal is the cost of implementation and execution, as well as the time expected for completion. Owners wishing to adopt the plan then sign a contract, and work commences.
2. Plan Implementation
Next, we meet regularly according to the plan to assess progress and agree upon achievement of specified milestones.  If the plan needs modification, we then perform further analysis as required, agree to the necessary changes, and proceed accordingly.
3. Post-Plan Support
After the plan is complete, we may decide to continue working together to ensure proper maintenance, prevent new cash-flow problems, and address additional areas in need of improvement.
Services That May Be Included
Financial Statements
Running a business without timely and accurate financial statements is like driving a car without the dashboard.  Without statements, there will be little sense of direction or progress. More often than not, making sure the owner regularly reviews and understands the financial condition of the business is the starting point for our services in the Plan Implementation phase.
Planning & Analysis
Financial statements allow an owner to look back on how the business has done historically. To look forward, an owner needs a business plan, forecast, or budget. We make sure each owner has a plan describing how much will be spent, as well as where and when. Progress is then measured against the budget—if the business is over-budget, steps can be taken early to address problems and ensure cash does not run out.
Maximizing Cash & Cash Flows
Cash flow measures the money coming into a business against the money going out. An owner cannot run a business successfully without plans to maximize the inflows and minimize the outflows. Alongside the owner, we identify the most impactful cash-flow strategies—increasing revenues, reducing unnecessary expenses, improving customer collections, eliminating slow-selling inventory, spreading out capital improvements—and make them a part of the plan or budget.
Capital, Banking, & Lending
Many owners need to look beyond their businesses or personal resources to capitalize their companies. Banks are only one source of cash, and they are often the best. Other times, however, equity financing might be called for. Aronstam CFO can connect you with investment bankers if they are what you need. Occasionally, the situation calls for non-bankable funding, such as to finance a major sales or purchase order. We can introduce you to our network of alternative financing professionals.
Profit Improvement
Improving profits is not as difficult as it may seem. It occurs when revenues are increased, costs are decreased, or both. We have extensive experience in the profit-improvement process and have many profit-improvement solutions.
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We start with a line-by-line analysis of the profit and loss statement, reviewing each component to identify opportunities to increase revenues or reduce costs. We may also benchmark against other similar businesses to identify variances for future corrective action and to establish targets, which we include in the budget.
Strategic Planning
A successful businesses owner uses strategic financial planning to set long-term goals. For example, a goal may be to reach a certain level of revenue by the end of 5 years. Once the goal has been set, we help the owner determine how to achieve it. This might include changing product mix, new pricing strategies, new marketing strategies, increased staffing levels and compensation.
Working Capital
Working capital is a financial measurement that represents a company's operating liquidity. We often hear from business owners that their companies have significant profits or sales, but are short of working capital. This can result in the inability to make payroll or pay vendors despite significant profits or sales.
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When working capital is not adequately managed, deterioration of cash flow may critically affect a company's ability to fund operations, reinvest in the business, and ultimately, survive. We provide services to make sure this does not happen. With adequate working capital management, cash flow supports a company that thrives in the marketplace.
Gross Profit Evaluation & Optimization
Gross profit (total sales revenue minus direct costs) is what remains after costs associated directly with sales, such as materials and direct labor, are paid for. This is an extremely important number for every business to manage, as it determines the breakeven point and the amount of profit earned beyond that point. In other words, it directly impacts risk and return.
Business owners need to be aware of factors affecting gross profit margins and pay close attention to them. If gross profit margin is not tracked and managed, a company may encounter cash flow problems. We help companies benchmark gross profit margin using industry averages to provide a targeted goal. Tracking keeps owners aware that factors impacting gross profit margins may change over time. For instance, if costs increase due to inflation, then we may suggest a compensatory price increase.
We are also experienced in planning for a business after a transaction, including people and systems integration, the achievement of any synergies required to achieve transaction goals, and the creation of expected shareholder returns and value.
Increased Sales
Business owners can usually increase business sales significantly when they are allowed to spend time being visionaries, idea generators, and catalysts for change. We have experience helping companies improve their infrastructure in order to free owners from many administrative and operating duties, thereby enabling them to spend more time building relationships and formulating ideas. This typically results in a significant increase in sales.
Expense Reduction
Expense reduction starts with a business plan identifying every activity and related expense. We 1) determine which costs can be pared back, 2) identify which costs may not be in alignment with the core business, and 3) develop a plan to evaluate two to three fixed costs per month and take action if these costs exceed the plan. Essential activities are also reviewed to determine if they can be reengineered or renegotiated to cut expense.Â
We then develop reporting to compare planned with actual expenses. We evaluate significant negative differences between actual results and the plan, and assist the owner in taking corrective actions. This reporting also allows us to calculate break-even points in terms of units sold, dollars sold, hours billed, or any other revenue driver applicable to a business. Owners then know their minimum sales goals by period.
Exit & Acquisition Strategies
Business exits or acquisitions can take many forms. Having the right plan to exit or buy a business puts the owner in the driver's seat.
We have considerable experience with the tools and processes required to complete a transaction. We understand how to value an acquisition target by reviewing financial and marketing information, conducting financial due diligence, and applying valuation metrics. We are experienced in partnering with other key players on M&A deal teams: the internal subject matter experts and external financial, tax, valuation, and legal service providers needed to build a business case. We know how to present analyses and findings to owners/senior management and potential buyers, sellers or investors. Having lived through M&A transactions, we understand their impact on pro forma company financial statements and long-range forecasts.
