Tag Archives | business

Business Accelerator

See also:
Dilemma of Financing a Start Up Company
Why do most startups fail?
Financing a Startup

Business Accelerator Definition

The business accelerator definition is a program that includes mentorship, education, and typically a “demo day” where companies are able to pitch their business to the business community. This business community is typically comprised of potential vendors, investors, partners, and customers.

Start ups, early stage companies, or subsidiaries of existing companies participate in business accelerators to accelerate their sales, operations, and financials.

Business accelerators are either publicly or privately funded. Publicly funded accelerators are funded by the government. They typically do not take any equity. But they generally focus on a specific industry – including biotech, fin tech, med tech, and clean tech. Whereas privately funded accelerators are funded by private entities. Because there is a higher risk for the investors, they typically take some equity or provide capital as debt.

Regardless of the type of business accelerator, it’s important to note that they are highly competitive. Application processes are usually extensive as each accelerator needs to protect their reputation – the companies they “pump” out.

As an introvert, business accelerators can seem daunting, but it is great networking place! Click the button to download our Networking for Introverts Guide.

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Purpose of a Business Accelerator

The purpose of a business accelerator or accelerator programs is to grow young companies by nourishing them with the support, connections, and knowledge they need to be successful. Many times universities will have an accelerator program to monetize the intellectual property created. Likewise, governments will host these programs to fill a gap in their initiatives.

Should You be a Part of a Business Accelerator?

Now that you know what an accelerator can do for you, should you be a part of an accelerator? It all depends on the size of your company, whether you need further mentorship and coaching, and if you are preparing for a round of financing.

Need to Mentorship & Coaching

Many of our clients don’t realize how valuable mentorship and coaching until they become coaching participants in our Financial Leadership Workshop. Mentorship and coaching can help further your network, your product, your process, and your brand. They provide a non-filtered, un-biased support that, while may sometimes be harsh, will help further your company.

Preparation for Financing

If you are preparing for your Series A, seed capital, venture capital, or angel investment, it’s important that you see all your options. As more companies are starting up, you will see the investor pool growing. Just because you know only one Angel investor now does not mean that is your only option. Accelerators help connect the right investor for your company to you.

Business Accelerator vs. Business Incubator

One question we get often is, “what’s the difference between a business accelerator and a business incubator?” A business accelerator can often last anywhere from a couple weeks up to a year. Whereas a business incubator holds companies from a year up to several years. An incubator’s goal is to develop a successful company, so until they are ready to fly, they continue to incubate them.

Need guidance in networking and taking advantage of your business accelerator experience? Download your free Networking for Introverts guide and start building your network today.

Business Accelerator, Business Accelerator Definition, Purpose of a Business Accelerator

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Business Accelerator, Business Accelerator Definition, Purpose of a Business Accelerator

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Knowing Your Economics: The Discipline of the Financial Leader

knowing your economicsMichael Gerber said it best in his book, E-Myth Mastery, “there is nothing in the creation and operation of a company that so seemingly conspires to confuse, intimidate, overwhelm, complicate, rationalize, and metastasize the plain ignorance of the average business guy, or woman, then money” (172). But why is that so? It’s because as humans, we tend to overcomplicate and twist even the simplest of things… Because it can’t be that easy! As we dig into the discipline of the financial leader and knowing your economics, let’s get on the same page. Money can mean different things to different people, but in the end, money is meaningless without people – just like business is meaningless without people.

The Discipline of the Financial Leader

Over the past 25+ years, The Strategic CFO has made it our mission to convert number crunchers into financial leaders. Anyone (relatively speaking) can account, but it takes someone specific to be a financial leader. The financial leader is simply that, someone how leads the company financially. But it’s often difficult when you have multiple leaders in the company without a focused vision or goal. Thus, Michael Gerber expands that “to the degree the enterprise leader is clear about her vision, the financial leader can build a financial model of that vision…” (174). That being said, you need to be in constant communication with your entrepreneur, CEO, and executive team. Sometimes the best conversation is where the financial leader is listening. That communication will transform you from a financial guru to a leader – where you need to be if you’re going to succeed. Knowing your economics or financial statements is just the first step to becoming a discipline financial leader.

When you discipline yourself to knowing your economics (or financials), knowing your cash position (balance sheet), knowing how every decision impacts the bottom line, you will find yourself leading the company forward. The basics are critical. Often, we find that accountants, Accounting Managers, Controllers, CFOs, etc. are only concerned about the costs. But they also need to be involved in the sales and operations of the business. There shouldn’t be a day that you as the financial leader do not think about the entire business.

A best practice that our leaders have implemented is to walk the plant, go out to the field, and spend time in the manufacturing facility. The key here is to get out of the office.  Having conversations with the field people and shop people can often lead to great ideas the financial leader can implement.

Knowing Your Economics

Again, it seems simple… Do you know your numbers? So many times when we come into a company, we find that not the CFO, CEO, COO, CMO, or anyone in leadership truly knows their numbers. The numbers we’re talking about are your unit economics. Unit economics shows your revenues with their direct costs associated with that one unit. Look at the following example for a simple unit economic breakdown:

   Revenue       $10

COGS          $3.5  

   Gross Margin  $6.5

It’s best if you can allocate each cost to a single good. While it may take some work to do that, some companies neglect to address SG&A when they look at their unit economics. That results in false economics or financial results; and eventually, you will find yourself out of cash. While the example above is really simple, it works. If you find that it doesn’t work, then you may not have a good costing system in your manufacturing facility, your margins may be off, and again, you income statement may not be accurate.

If your income statement not profitable or need to be improved, click here to download our free Know Your Economics worksheet. It walks you through how to become more profitable, starting with the basics.

Once you have accurate financial statements, the only way they will be of any value is if and only if they are completed timely.  Getting your financial statements 1 or 2 months later does no good and does not provide decision makers timely information they need.

Improves Decision-Making

Knowing your financial situation helps improve your decision-making. When you know how much you sell a product for, what its associated costs are, you know how much margin you have. If your costs go over a certain threshold, then you will be unprofitable. Knowing your unit economics is a simple test to know if a decision will be a profitable one or not.

Using the same example above: if you want to implement a new software that would automate the sales but it costs an additional $7 per unit, then you would be unprofitable. As a financial leader, express this with your sales team. If they cannot provide evidence or sales projections that increases the number of units sold (thus reducing the software cost per unit), then the decision is no.

Expands View of Business

When you know the economics, margins, and financial position of your business, you are able to see a lot more. It’s the basics of doing business – much like eating and exercising. You need it to remain healthy. Ingrain the economics of your business in your entire team. Marketing, sales, finance, operations, etc. need to know how each decision impacts the profitability of the company. When you do this, each employee is able to think more constructively. In addition, you build a culture of financial leadership. With the basics under your belt, you are able to expand your view of the business.

For example, when we bring on interns in the summer, we drill our unit economics. Then as they get further into their internship, they bring more value because they know how the business works. They may see something that we as long time employees/leaders don’t.

Weather Storms or Sunshine

Unfortunately, recessions roll around occasionally. Economic crisis is a natural cycle. Then sales start booming and you can’t fulfill those orders fast enough. Whether you are weathering storm or sunshine, it’s critical that you know the basics of your business. When you know your economics, you can shape your economics to result in profit – in storm or sunshine. If you need help shaping your economics, click here to download your free Know Your Economics guide.

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The 5 Stages of Business Grief

In her 1969 book On Death and Dying, Elisabeth Kubler-Ross outlines the five stages of grief individuals experience when faced with catastrophic personal loss. The five stages are as follows:

The 5 Stages of Business Grief

In one form or another, businesses too experience these five stages when faced with crisis or catastrophe. These 5 stages of business grief are related to loss. For a business, this can be loss of income, customers or the enterprise as a whole.

While an individual must progress through the grief cycle at their own pace, it’s important for businesses to arrive at the final stage of acceptance as soon as possible so that corrective action can be taken before things get too far out of hand. The following is an illustration of how each of the 5 stages of business grief might play out in a company.

Stage 1 – Denial

The first stage of business grief is denial. The business owner may try to shut out reality or create an alternate reality that is preferable. They may also try to convince themselves that the situation is just temporary or that the crisis won’t affect them or their industry. Some may even hire consultants to validate the status quo rather than deal with the problem.

Stage 2 – Anger

The delayed reaction caused by denial gives rise to feelings of anger. At this stage of business grief, the business owner may start to play the blame game. Why are greedy suppliers flooding the market and driving down prices? Also, why are my customers so disloyal and squeezing me on my pricing? Why can’t my people just do their jobs right? Eventually, some owners may turn the blame inward and chastise themselves for not seeing the crisis coming.

Stage 3 – Bargaining/Rationalization

At this stage of business grief, business owners will often reach out to third parties to weather the storm. Some will ask vendors to extend payment terms. Some will negotiate with bankers for cushion on debt covenants or to extend lines of credit. Many daydream about the big contract they’re about to win that will turn things around.

Stage 4 – Depression/Despair

Oftentimes, bargaining during a crisis doesn’t solve the problem. Vendors are often over-extended to their suppliers, banks are having to tighten up on controls and customers are hesitant to take on new projects due to uncertainty. When the reality of the situation dawns, owners may fall into despair. After all, what’s the point in soldiering on if the underlying cause is out of your control?

Stage 5 – Acceptance

Most business owners are made of pretty sturdy stuff and will not allow themselves to wallow in self-pity for long. Consequently, they will make peace with the threat and begin to develop a strategy to deal with it. How? By focusing on what’s working and eliminating what isn’t. Transfer resources to more profitable products and eliminate those products that kill margins. Hug their best customers and fire the problem ones. Unleash the creativity in their best employees and purging the ranks of bad hires.

Crisis and catastrophe are inevitable in a business. The key is to recognize the crisis and resolve the 5 stages of business grief quickly to get back on track.

To learn more financial leadership skills, download the free 7 Habits of Highly Effective CFOs.

5 stages of business grief

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5 stages of business grief

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5 Stages fo Business Grief

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Feasibility Study

See Also:
Current Ratio Analysis
Comparison Analysis
Customer Analysis
Mixed Economy
Variance Analysis

Feasibility Study Definition

The feasibility study definition is the study of the feasibility of creating benefit from a given project. It is one of the first steps in evaluating a business idea. Basically, a feasibility study proposal is the analysis which establishes whether a business or project is a worthwhile investment of time.

Download The How To Be A Wingman Guide

Feasibility Study Explanation

A feasibility study, explained as the smart first step to starting any business, must be done. In regards to starting a business, a feasibility study outline is done by asking the following questions. It all starts by asking if it is possible.

Are the business operations even possible? If so, how would the company make money? Are there customers that are willing to buy the product? Once this is established, marketing feasibility must then be studied.

How many customers are there? And how much of a similar product do they buy? What amount will we sell? How would the company let customers know that it exists? How does the company persuade customers to use their product? What does the marketing and sales process cost? Will the business make enough money to support this? How much will the company charge for products? Operational questions come next when creating a feasibility study report.

How much would the operations, which create products, cost? How many units of products will the company have to sell, with the above amount of profit from each unit, to cover marketing and operational costs? Finally, you must ask financial questions.

How much will the company make in a year? How much will the entire startup costs, with employees, equipment, and marketing expenses, be?


In conclusion, a feasibility study follows this method. It establishes, first, if the project is even possible. Then it follows the method listed above to finally establish if there will be any benefit to owning the company after you put all of the effort forth. Do the feasibility study analysis this way, before opening operations, to prevent an expensive mistake.

The above feasibility study example provides the main questions to ask when considering starting a project or business. You will need to answer additional questions based on situational needs. Though no single process decides the answer, you can assume an indication of the results before the company is created.

A feasibility study checklist is available in books or online. Find a few books and reports you like. By following the methods in each of these books, you will be able to answer all of the unique questions and prove the company concept over time.

Guide your CEO by conducting the feasibility study to vet their ideas. Click here to learn how you can be the best wingman with our free How to be a Wingman guide!

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Click here to learn more about SCFO Labs

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