#331: See Clearly into the Future: Forecasting Cash Flow and Value Driver Scenario Planning with Joel Beyer

Ep.#3 [THEME SIX]

Do you know if owning and running a business is worth it for you? I have been hearing that question a lot lately. Today’s episode is all about figuring out the best way to answer that question.

I have never met an entrepreneur or business owner that doesn’t know how to tell one hell of a story about where they have been, where they are, and where they want to go…however, I find most entrepreneurs don’t have the confidence to hit the throttle because they are afraid of the plan not working, running out of cash, and don’t have a clear sight into whether that plan will help them hit the future equity valuation they want in the future.

On today’s episode we have my new partner at Arkona, Joel Beyer, on the show. Joel owned a multigenerational company that sold to the private equity firm my other partner, Matt Buskirk, sold to (and ran). Joel truly understands what it takes to build a plan, execute like hell, and course correct as things change.

Today Joel and I talk about why the current method of planning, budgeting, and forecasting is broken, what it can (should) look like, and what to do about it.

Joel breaks down why it’s important to normalize all of your company data under one dashboard; how to get started collecting your data, tying the short-term plan to the long-term equity target, and how to create a rolling forecast that updates your plan each month based on what was actually accomplished; and then updates your plan and progress toward your long-term goal.

This was a super fun conversation that was heavily rooted in planning and finance…all without a bunch of financial jargon. I hope this helps you answer the most important question we all need to answer….“Is this worth it?”

WATCH THE INTERVIEW ON YOUTUBE: Intentional Growth™ Podcast

What You Will Learn

Why the current method of planning, budgeting, and forecasting is broken.
What bad financial planning looks like and what needs to be done to fix it.
How to tie your operational data, workforce data, and financial data together into a holistic plan that actually makes sense to the brain of an entrepreneur.
How to create value drivers into your plan so you can clearly see where you need to invest and why.
How to spot future bottlenecks or tight cash positions.
How to get visibility into the tradeoffs between distributions, funding growth, and taxes.
How to answer the question, “If I hit the gas on our plan, what is the future impact on cash flow and valuation of the company?”
How to eliminate “spreadsheet hell” because you are creating spreadsheets that are in isolation and not tied to the financials.
What makes up a good foundation to start your planning process to grow the equity value of your business.
How marketing should be tied into your financials.
The data sources you need to connect and use to predict your future cash flow.
Why you can eliminate the drudgery of annual budgeting by creating a roll forward plan that is always updating your future plan based on what you actually did.
How to make sure taxes are never a surprise again.
The difference between a locked plan and a roll forward plan.
How to use your plan when you need to pivot.

// USE YOUR FINANCIALS TO CLARIFY A PATH TOWARDS A MORE VALUABLE BUSINESS: Intentional Growth Financial Assessment

Bio:

Joel Beyer started his career in a family business, working in all facets of the company. After acquiring the company, he focused heavily on business optimization and automation. Joel then led the company through a successful sale to a PE firm. He became the EVP of Strategy and Business Improvement at Impact group and continued to focus on optimization through a sale to a strategic buyer. His goal in joining Arkona is to use his previous experience to help business owners optimize their companies to achieve full potential.

Interview Quotes:

11:31 - “It was a heavy lift for a year and a half to get all that data working together and doing all the changing of the management with the people as well. But it’s so important to peel the onion all the way back and then rebuild stronger.” - Joel Beyer

15:24 - “If you lose a big client, you remember that one. But maybe you lose five small ones that don’t really hit your radar, that add up to a mid-sized client. And that doesn’t carry over in your feel of your churn rate. A lot of companies are actually surprised by their churn rate.” - Joel Beyer

23:12 - “The first thing you need to understand is, ‘Do my historical financials, are they accurate? And are they granular enough to understand my business?’” - Joel Beyer

25:32 - “Processes that you ultimately put in place around bookkeeping and organization of your financials helps you inform the future. If you can count on your historicals, you can have a much clear view and be more secure in your planning.” - Joel Beyer

45:46 - “We’ve got different types of data coming in that need to get connected. Where we’re connecting it or where we’re going to report from it, needs to understand it in a certain way.” - Joel Beyer

01:04:40 - “The first plan we’ll do is we’ll build those drivers to do a role for that plan.” - Joel Beyer

01:12:39 - “You get monthly feedback on how you’re executing against a goal. And that’s so important, I can’t stress that enough.” - Joel Beyer