Procedural Support

Day-to-day financial stewardship includes adhering to policies and procedures.  As your company grows, the makeshift processes that worked at the outset soon become inadequate and inefficient.  We can help you implement the tools and expertise you need into practical financial procedures.  Our support services will give you direction on how to handle the following areas: …

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Expert Financial Analysis

Your success depends largely on the tools you have to work with.  Our financial management tools are designed to help you determine where you want to be and provide the data to keep you on track.  The key insights you need to make the right business decisions are usually buried right in your own books.  …

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Financial Management Tools

Your success depends largely on the tools you have to work with.  Our financial management tools are designed to help you determine where you want to be and provide the data to keep you on track.  The key insights you need to make the right business decisions are usually buried right in your own books.  …

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Putting Your Profitability on Track

CFO Alternative Inc. provides small- to mid-size firms with the financial expertise, tools, analysis and procedural support that big businesses enjoy, without the lofty CFO salary.  Our experienced and proven Chief Financial Officers can give you the financial data, direction and control you need to take your business to the next level.  From strategy validation …

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Procedural SupportExpert Financial AnalysisFinancial Management ToolsPutting Your Profitability on Track

Are You Building a Business or Funding a Lifestyle?

Often times I deal with business owners who have over extended their personal life and draw too high of a salary to pay for it. They try to justify their higher than normal wage by explaining they deserve to be paid that much because they work hard at their business. However, my question to them is:  “Are you building a business or funding a lifestyle?”

Here are some tips to avoid this:


Tip 1: Take a fair Market Value Salary, build up profits and equity and then take a higher salary and increase your lifestyle once your business can support it.

There is nothing wrong with running a business to support your lifestyle, but there are consequences to that choice. Do not get frustrated when there is little profit left and you require money for that big customer you finally landed, and the banks say no to your request for an operating line or an increase because your lifestyle is over extended. Banks do not want to support your lifestyle; they want to help your business grow.


Tip 2: Strategically build your business. Think about what amount of salary you can draw or what amount the company can afford and then let that drive your personal lifestyle.

The same thinking will work on the type of vehicle you should buy. Simply because you want to drive a brand new BMW, does not mean that you should at this time. Ask yourself, “How much can the company afford to pay in vehicle expenses?” Let that amount drive the type of vehicle you use.

 

Tip 3: Do not over extend in lifestyle luxuries until your business can support it. Once your business can support it, go for it! You deserve it!
All too often I run into small business owners who are driving the best cars, using the latest in phone technology, eating at the best restaurants, renovating their homes, etc. but then wonder why, at the end of the year, they have no profit.  So my question to you again is, “Are you building a business, or funding a lifestyle?”

There is nothing wrong with either one, but with each one come a different set of consequences. Figure out what it is you are doing and accept the conditions that come with the decision, if you do, you will find your stress levels will be reduced.

 

Lessons Learned:

  • Take a Fair Market Salary as income
  • Do not over extend in lifestyle luxuries
  • Strategically build your business