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Consultant Allen Engstrom on the Biggest Mistake Small Businesses Should Avoid

3 min read

Allen Engstrom is the managing director of CFO Network of North Little Rock. He previously worked for Motorola Semiconductor and Intel Corp. in finance, strategy and business development roles. Even before joining CFO Network, he was involved in small-business development and mentoring, serving on the planning committees of both the Arizona Venture Capital Conference and the Arkansas Venture Forum.

Engstrom has also worked with universities such as Arizona State on developing technology into growing companies. He has an MBA from the University of Texas at Austin.

CFO Network, founded in 2004, provides accounting, analysis and consulting services to businesses.

What are the most common financial mistakes you see small companies make that would keep them from growing to their full potential?

Probably the biggest is not investing in proper instrumentation. And its close relatives are not understanding and not responding (either correctly or rapidly enough). At some point you have to shift from managing by walking around (intuition) to managing by the numbers. That takes a different mentality and discipline.

There are certain critical metrics that you need to be monitoring on a regular basis, and you need to have confidence in them. A small-business owner needs to know how to read and use financial statements. We have also seen a lot of problems with not managing growth properly. The byproducts of poor growth management are employees who are burned out, customers who are unhappy and unexpected cash flow crunches. Proper business planning is the key.

What should businesses expect from a consultant, whether from CFO Network or any other firm? Is the work you do for clients similar to what a financial planner does for a household, or is it something else entirely?

What our clients expect from us is to deliver a superior value. For us that is a unique combination of solid accounting with value-add analysis, collaboration and planning aligned to specifically quantified goals for the business. The accounting is our foundation. The plan is our framework we use to help CEOs achieve their goals.

Accounting for money in and money out is one thing, but the best CFOs seem to be engaged in predictive modeling and “what if” scenarios. Does CFO Network fill both of those roles? And does it make a specialty out of certain industries?

Most CEOs don’t know what to expect from a CFO. We deliver services on par with what CEOs of the best-performing companies in the world expect, which include a seamless view of their business from past to present to the future. We help our clients leverage their assets, minimize risk, maximize profitability and “see around corners,” which includes the ability to act proactively.

How do you recruit consulting CFOs? What do you look for when hiring, and what should businesses look for when hiring their own?

We have worked hard to put in place a structure that allows people with a lot of potential to come in where they are and then create a path of promotion internally. We look for people who are ethical, smart, passionate, self-driven team players and put them in position to be successful.

Finding a good CFO is challenging. We know from our experience working with hundreds of CEOs that they need some mix of strategic and detail orientation, as well as finance and accounting skills. The right mix of that is rare to find in one human brain. We eliminate that problem by bringing a team of specialists to the table. We leverage our bench strength for our clients’ benefit by pulling together the right mix of resources that meet the need when it is needed at a price that’s affordable.

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