⏳This is a 7-minute read📚
Hey Fast Tracker!
In this edition…
1️⃣ Expert Insights: 💡 Carl Seidman is my podcast guest in this week's episode of FP&A Fast Track. With a background anchored in the Big Four and extensive experience in distressed business consulting, Carl now channels his expertise into helping companies as a fractional CFO and FP&A advisor.
2️⃣ Brain Snacks Book Bites: Your Exit Map by John F. Dini 🧠 In FP&A, we are often tapped to evaluate acquisition targets. Understanding how business owners think about exiting their business is helpful in analyzing any acquisition. John F. Dini is widely recognized as one of the nation’s leading experts on business exit planning, and this week, we take a bite out of his book Your Exit Map.
3️⃣ 💡 Fast Track Tip of the Week: On the FP&A Fast Track podcast, Carl Seidman and I discussed assumptions we use for financial projections. In this week's tip, we look at some best practices for assumptions.
🎙️ Expert Insights from the FP&A Fast Track Podcast with Carl Seidman.”
With a background anchored in the Big Four and extensive experience in distressed business consulting, Carl Seidman now channels his expertise into helping companies as a fractional CFO and FP&A advisor. His commitment to nurturing leadership and advancing communication skills makes him a valuable mentor and strategic partner for entrepreneurial businesses.
Read below for key takeaways from my interview with Carl, or watch the full episode here.
5 Key Takeaways
1️⃣ Recognizing Unique Abilities for Personal Growth: Carl Seidman emphasizes identifying and leveraging one’s unique skills and expertise for career growth. By reflecting and seeking external feedback, as he did from 25+ people, professionals can better understand their intrinsic value and build confidence, underscoring the importance of self-awareness and validation from others.
2️⃣ Communication and Leadership Evolution: As professionals progress in their careers, strong communication and leadership skills become paramount. Carl advises gaining public speaking experience, identifying mentors, and engaging in continuous learning. Using platforms like Toastmasters can provide a safe environment for honing these crucial abilities.
3️⃣ Adapting to and Managing Business Disruptions: The unpredictable nature of the financial world requires professionals to make informed decisions in the face of incomplete or incorrect information. Carl draws parallels between forecasting and gambling, highlighting that intuition backed by solid data and intelligent decision-making can guide professionals through business uncertainties.
4️⃣ The Dynamic and Holistic Nature of FP&A Roles: The FP&A function has evolved into a more formal and structured role that now requires a broad understanding of business strategy, operations, and various departments. Carl stresses the importance of business acumen, problem-solving, and insight-driven approaches as key differentiators from traditional accounting roles.
5️⃣ The Importance of Continuous Learning and Curiosity: Both John and Carl advocate for a mindset of continuous learning and curiosity. John’s extensive career and Carl’s journey from corporate to entrepreneurial roles demonstrate that staying curious and pursuing knowledge beyond set goals can lead to significant career advancements and deeper professional satisfaction.
🔍 Episode Selected Chapter Index
03:05 Chose business over science, pursuit of relatable work.
13:36 Financial analyst gains valuable experience through mentorship.
17:18 Emergence of FP&A in careers.
21:50 Discussion on inflation and financial decision-making process.
26:21 Preference for driver-based planning in forecasting methods.
28:23 FP&A relies on good assumptions for forecasting.
33:52 Unique expertise and credibility in software consulting.
42:55 CPA partners excel due to communication, leadership.
A more complete index is available in the full episode.
📚 Leveraged Learning: Learn in minutes, Use for a Lifetime.
This week's book bites are from “Your Exit Map” by John Dini. For the complete summary of this book, in less than 15 minutes, go listen to, or read, it here.
Here are the key takeaways, explained simply!
Why Selling is Tough
1. Boomers’ Business Boom: After World War II, lots of babies were born, and they grew up wanting better lives. These Baby Boomers started tons of businesses.
2. Too Many Sellers, Not Enough Buyers: Now, Boomers want to sell their businesses to retire, but there aren’t enough Gen X-ers (the next generation) to buy them.
3. Different Priorities: Gen X values work-life balance and personal happiness more than owning a business, which makes them picky buyers.
The Solution: Exit Planning
To sell your business well, you need a solid plan. Here’s what you should do:
1. Triangulate Your Plan: • Know Your Net Worth: List your assets, excluding your business. • Set a Retirement Age: Decide when you want to retire. • Calculate Needed Retirement Funds: Figure out how much money you’ll need for your retirement lifestyle.
2. Get a Valuation: • Know Your Business’s Worth: Get your business valued professionally so you know if it matches your retirement needs.
3. Growth Strategies: • Hire a Growth Expert: If your business isn’t worth enough, work with an expert to grow it until it meets your goals.
4. Identify Buyers: • Explore All Options: Consider selling to industry folks, investors, strategic buyers, or even your employees. Weigh the pros and cons of each.
5. Execute the Plan: • Prepare for Sale: Think about how you’ll transition out, handle confidentiality, and inform your team and clients about the sale. Conclusion Selling a business is tricky, but it’s workable with a good plan. Start planning early, get professional help, and you’ll be ahead of the curve.
For the complete summary of this book, in less than 15 minutes, go listen to, or read, it here.
💡 Fast Track Tip of the Week
One of the topics Carl Seidman and I discussed on the FP&A Fast Track podcast was financial projections. Anyone who makes projections will tell you that using good assumptions is the heartbeat of a good projection. But how do you develop the “right” assumptions for your model? Let’s look at some best practices.
Rely on Historical Data and Trends
Want to make smart assumptions? Start by looking at your own company’s past performance. Check out things like sales figures, customer growth, and operating costs. This data can show you patterns that help predict the future. But remember, the market can change, so don’t assume everything will stay the same.
Conduct Thorough Market Research
Reports from firms like Gartner and Forrester can be very helpful. They dig deep into industry trends, market shares, and pricing, using tons of data and expert opinions, making them invaluable for your research.
Consult Industry Experts and Peers
Talk to people who’ve been around the block. Industry pros, consultants, and peers can offer real-world advice you might not find in books. Their insights can help you make more grounded assumptions and spot challenges you didn’t see coming. Don't ignore the experts in your own backyard. Nobody knows your company better than the people IN it, so talk to the people who are the boots on the ground that keep things running. They know what drives the numbers.
Utilize Financial Modeling Best Practices
When building your financial models, keep them flexible and clear. Authorities like Mosaic and Growthink suggest models that are easy to update as things change. Avoid making them too complicated - you don’t want to get stuck with a confusing mess.
Adopt a Conservative Mindset
Being optimistic is great, but it’s often safer to be conservative when making assumptions. This means not overestimating revenue or underestimating costs. If things go better than planned, that’s awesome; if not, you’ll be prepared.
Continuously Monitor and Adjust
Your assumptions aren’t set in stone. Regularly compare them to actual performance and tweak them as needed. Adapting to market changes quickly can keep your financial planning on track.
In Summary
Combining your company’s data, market research, expert opinions, modeling best practices, and a cautious approach can help you make the most reliable assumptions. And remember, staying agile and ready to adjust is key to successful financial forecasting.
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See you in the next edition.
John Sanchez
Managing Director of FPA Group
FP&A Fast Track Podcast Host
