The Mind 🧠 of a CFO
Read time: 2:01 minutes
Welcome to The Mind of a CFO newsletter. The newsletter is designed to help entrepreneurs grow in business 📈, mind 🧠, body 💪, and spirit🧘.
Each quarter we will give our CFO's take on a topic to grow your business profitably.
In addition, each month, we will provide you with two to three things we are listening to 👂, reading📚, or watching 👀 that we believe will help grow an entrepreneur.
♻ CFO’s Re-Take - Re-Engineering Your Financials to Tell a Story
Let's dive into how to make your financials tell a story. We’ll start with question #1 from earlier, "What services are most profitable?.” Let's use the following as an example:
Total revenue for rolling twelve months = $1,500,000
Service lines = 3.25 (more on the quarter later)
Service #1 uses direct labor only. Revenue = $500k
Service #2 uses direct labor and materials. Revenue = $250k
Service #3 uses subcontractors and materials. Revenue= 700k
Service #0.25 uses software and subcontractors. Revenue = $50k
The revenue piece is easy. There would be three income accounts: Service #1 income, Service #2 income, & Service #3 income, and there would be two decisions:
Is service #0.25 worth tracking separately? If so, create a separate account. If not, create a generic account called "other operating income" that would include other small services in the future.
Is there a customer or client that should be tracked separately? For example, Unicorn Client, Inc. makes up 50% of service #1; therefore, management should decide whether to create a separate account or sub-account for Unicorn Client, Inc.
Click here to continue reading.
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Brain 🧠 Food
📈 👂The labor shortages are not going away anytime soon. Therefore, looking for ways to automate processes will be critical to future business success. The podcast Automation Town is an entertaining way to spark ideas around potential automation.
Start with season two. Click here to check out the podcast Automation Town.
On the subject of automation, any business creating content needs to be aware of ChatGPT by OpenAI. Companies will be integrating ChatGPT into their tech stacks and products in 2023. This will create advantages for the companies using it.
Click here to check out some use cases with ChatGPT.
📈🧠🧘👂According to Atomic Habits by James Clear, goals restrict your happiness. You need to love the process. Tim Ferris dives into this topic with Jerry Seinfeld on his podcast.
Click here to listen to Jerry Seinfeld discuss this topic with Tim Ferris.
🧘♂️📚 Is buying happiness possible? Maybe according to this article, buying more time has been found to lead to more happiness than buying any material items.
Click here to read about buying happiness.
What did you think of this month's issue?
Thanks for reading, The Virtual CFO!
P.S. There are 2 ways to work with us to grow your business profitably.