The other day, I met the founder of a new company near my home. The business is in an industry which I have great personal interest and I thought it would be a good opportunity to provide financial assistance. They needed help. The company had been recently featured in the local newspaper, was in a rapidly emerging technology and was really starting to generate a buzz. As a potential CFO, my first meeting with the founder went better than expected. It seemed like a great fit.



We decided to move forward: After the appropriate non-disclosure agreements were exchanged, I obtained from their Dallas lawyer their business plan, which I suspect had been quite expensive to produce. I was appalled; Numbers didn't add up. What few assumptions expressed in detail were so optimistic they should have been represented as waiting for miracles. Nothing made sense. I'd seen this kind of fluff before, mainly in China in the early '90s, where state-sponsored businesses had goals, but no coherent plans on how to reach them - simply because as subsidized businesses they didn't know how to build and articulate plans that would enlist investment or outside participation. Let's be clear: Objectives are NOT plans. The team near my house realized their business plan needed help, but what became patently obvious was that their expectations of their incoming CFO were really what was out of whack. CFOs can drive business goals, but they can't work miracles.

The devil is in the details. I next asked the tough questions, ones any investor would probe: Headcount ramp-up? Sales? Production and supply chain numbers? Capital schedules? Contingency plans? Scalability, etc? A healthy company would have responded along the lines of, 'Let us explain, draw a roadmap. . .' Instead, warning flares went up. One comment was, "We need team players, not someone who second guesses our executives all the time." Bad idea! Think how investors respond to this kind of nonsense. They don't! . . They leave. They know there's nothing there. An executive team without a plan, who can't attract and sell to the investment community, is doomed. The CFO, being the member of that team with the most to lose professionally, is point man, with his credibility on the line at all times. So investors inherently trust the CFO more than the SVP of marketing, or sales, or even the CEO. CFOs are hired guns for investors, objective and fair at all times, working above the noise. Any CEO who expects differently, or who shoots his own CFO in the foot, will be quickly dismissed by even the most tolerant investors. That kind of CEO isn't going to make it.

Attracting investment is like fishing; Toss out a shiny lure and you may get some bites from small fish, but they won't fill your frying pan. To land that big fish you need more. That is how the investment community is today. In the DotCom days, business plans were done on napkins at the corner coffee house. VCs were in a feeding frenzy and thought if they did not take the deal and run, no matter how badly planned, they would lose it. We all know those days are long gone.

A few months ago, I had a series of meetings with a small, private investment firm. They stopped investing in start-ups because of the high rate of failure and the time it took to get a reasonable return on their investment. Today, these firms focus on more mature businesses that run profitably. They don't necessarily have to be high tech, bio tech or the like. They want to invest in good companies, coach them to increase in value and achieve an outstanding rate of return. So a business that has good financial controls, a plan, and working operational processes is better than one that is in disarray, one that will need a lot of attention.

Recent events on Wall Street are shocking, to say the least. Investors are running for the side-lines and holding their cash tight .if they still have any. The disaster of the mortgage industry has been brewing for years and few people thought the government would have to implement a bail-out this huge. The dire situation is compounded by a rapid rise in the price of oil that has finally awakened everyone to the fact that we can no longer postpone the adoption of energy conservation and more fuel efficient vehicles. Automobile companies, long the back-bone of the U.S. economy, must reinvent themselves in a very short time period, while tolerating lower sales in the meantime. This will ripple across other industries in a matter of months, perhaps not as dramatic as the mortgage industry, but not too far behind. Where does this leave your company? If you want to attract even a dribble from the shrinking pool of capital funds, it makes it all the more important to have each and every one of your ducks in a row: Technology, management, systems, sales & marketing, customer support. None can be ignored and all need to operate like a well-oiled machine. There are too many companies needing cash, and far too little cash to go around. You'll need to fight for every nickel.

So the point is clear.the executive team must keep their eyes on the ball, manage the whole business, in order to successfully grow and reach the next level. This is nothing new. This is where the people at Thomas Financial Services (www.thomasfinancialsvcs.com) can help. They have the experience and knowledge to analyze, create and roll out the roadmap for a stronger and more efficient company through the development of internal processes such as finance, accounting, planning, forecasting, internal controls, project management, and the whole customer experience.

Little companies can succeed. Big companies fail every day. Failure to anticipate and plan kills your future. Recent blowups like Lehman and AIG drive home the point that when even the big boys take their eye off the ball, they strike out too. Chief Financial Officers turn organizational discipline into credibility with investors. Make sure your executive team is truly a team. Stay on top of your game. Plan your work, work your plan.