Case Studies - Part-time CFO
Restaurant Needs Financing for Expansion
A $2 million restaurant and banquet hall experiencing cash flow problems cannot obtain financing for needed expansion.
- Incumbent lender unwilling to loan additional funds for expansion.
- Regulatory reporting and payment of taxes were in arrears.
- Financial Statements were incomplete and inaccurate.
- No budget or forecast existed to determine how the addition to restaurant and banquet facilities would impact profitability and cash flow.
- Outside accountants were not receiving the financial information needed to complete their work.
- A Part-time LauberCFO was engaged to get arms around the situation and provide clarity.
- Began by updating the accounting system and correcting prior financial statements to reflect accurately the financial results of the company.
- Prepared cash flow analysis to forecast seasonal cash flow problems and allow the company to make changes to prepare for those times.
- Prepared a capital budget for the building addition, as well as expenditures for additional furniture and equipment.
- Developed a five year forecast of income statements and balance sheets of future operations.
What this meant to the company:
- Utilizing the updated financial information and forecasts, the business was able to obtain favorable financing for the project after the Plan was presented to three banks for review and proposal.
- The expanded banquet and restaurant operation with its improved appearance and visibility led to Increased revenues and profitability.
- Control of operating results through monitoring of financial information lead to management changes which further enhanced financial performance.
- The cash flow projection helped the company avoid cash flow crises and provided the ability to meet vendor and regulatory requirements on a timely basis.
- The LauberCFO added a high level of financial expertise to the management team which was utilized in many areas.
The value of a Part-time LauberCFO:
- Trusted adviser to owners.
- Improved relationship and trust with lenders and vendors.
- Financial management concepts integrated into operations.
- Ability of owner to sleep at night knowing that obligations were being met.
- Advisor to bookkeeper as to accounting questions and improved efficiencies.