As the economy begins to emerge from beneath COVID-related restrictions, many uncertainties remain in the small business sector. But one step you can take to right-size your risk and improve your opportunities for future growth is to make sure you have good financial management and tighten your financials, according to John Ruther, managing director for consulting firm O’Keefe. He was interviewed by Sheri Welsh for The Welsh Wire podcast, sponsored by the Family Business Alliance.
“Making sure that somebody can see three to five years of really good solid financials, that you can’t poke holes in, it turns out to be really valuable,” he says.
Ultimately, the goal of good financial management is to create value for the future, Ruther says.
“And obviously, if something’s not valuable anymore, then there’s not a need for it. So as long as you’re keeping it valuable, then that makes all the sense in the world.”
Ruther also says it’s also important to expand company knowledge and expertise beyond the firm’s founder.
“In a lot of cases, you’ll see that the people who work for or work within that company look to that person to make all those decisions. So when it comes time to look to either pass it on or exit or take a look at even expanding the customer base, [if] it’s that person that is the reason that the business is so successful [then] it’s really important for you to start to pass that information on to somebody else.”
He also says you can help future-proof your business by spending time now in strengthening relationships and building trust with suppliers, bankers, etc.
The Family Business Alliance serves to advance family businesses in West Michigan with the tools, strategies, and partners to achieve multi-generational success. We provide educational opportunities, events, and resources that will assist you to elevate leadership, navigate governance and create connections.