If you are the CEO or CFO at a business who banks with SVB; here are some things you CAN do over the weekend

1. Build a 4 week rolling daily receipts and payments style cashflow forecast.

2. Gear up finance team to actualize & reforecast every AM by 10am

3. Schedule a Daily Cash Management Crisis call for 10am every day. CEO to chair

4. Redirect any future cash receipts / revenue into non SVB accounts. Don’t throw fresh money on the fire.

5. If SVB is your only current bank. Open accounts with 2 other AA or A rated banks.

6. Go supplier by supplier and grade them a, b or c
a - showstoppers
b - pay if you can
c - don’t pay

You want as few a’s as possible, ideally none.

7. Find out how to get your $250k FDIC cash.

8. If you are able to pull any deposits or bonds back into a non SVB account. Do it. Put hands on any liquid you can.

9. Communicate a salary deferral plan with your top team. CEO takes the most pain $ and %. Important signal.

10. Elevate sign off of all new POs to CEO and CFO jointly. Don’t sign any off.

11. Make a list of ‘survival headcount’. The bare minimum on which the business can operate.

You may need this to prioritize payroll later.

Whilst accountants know how to prepare a BALANCE SHEET… 95% don’t know how to read them.

Interpreting balance sheets is the HARD bit.

So, here are the first 3 things I look for when reading a balance sheet.

Pull up a chair.

Let's go! 👇

When I review a balance sheet, I need a detailed picture of how the business is funded.

I’ll build out a picture under 3 headings;

1. Capital Structure
2. Working Capital Profile
3. Liquidity Headroom

Let's tackle them each in turn

1. Capital Structure.

The capital structure tells you how a business is funded / owned.

Is the business funded by debt or equity? What is the mix?

Who are the investors and what are their motives? And what are the rights and obligations attached to each?

Take each debt or equity instrument in the balance sheet and get clear on the following:

Who owns it?
How much have they put in?
What are they owed today?
What does their return look like if things go well
What are their rights if things don’t go well?
When does it mature?

I visualize this in a table.

I put the most senior ranking debt at the bottom.

Yes, this is upside down to the way you may have seen this presented before.

What can I say, I'm a rebel 😎

How does a CFO prep for an earnings call?

Short answer … it’s a shit ton of work.

Here’s what I do 👇🏼

1. Stay on top of performance

No good waiting until the quarter is gone. I use weekly reporting and monthly a management accounts to track performance vs plan inside the quarter.

If something comes off, I’m onto my Business Unit CFO to ensure there’s a recovery plan.

I’m tracking yoy sales, yoy EBITDA, & free cash generation in absolute.

If something falters I’ll keep digging (through monthly management reviews) to ensure we understand the root issue and got the right plan.

Ensure accountability is in right place, and monitor relentlessly

Sounds easy, but the art is creating the right organisational tension in the right place to make the right people jump at the right time.

And accordingly fix the root problem…

This is important because if the numbers are shit, it’s important that I’m able to explain what we are doing about it.

AND even more importantly, to already be doing it by the time the call comes round.