Less is more: simple spreadsheets

Recently I created 2 very simple spreadsheets to show and solicit feedback on monthly business results from 2 of the management teams I work with.  My accounting team (which for these 2 companies includes the same remote, part-time controller) puts together great, detailed, multi-tab workbooks that are sophisticated closing packages that are perfect for me to dive deep into every detailed account.  Since I manage cash tightly, this is crucial as I examine, for example, many of the balance sheet items.

For my audience in build-stage companies, this proved less useful.  Typically what you want there is to balance transparency and accountability with a digestible level of information that helps manage more effectively.  Until recently in both situations, I think the balance was off.

It turns out that creating a simple spreadsheet is a lot more work than a complicated one.  You have to make conscious decisions about what information is truly relevant, how to format it for easy consumption, and how you want the management team to use it to make operational decisions in fluid environments.  This is an important part of what a build-stage CFO does and I think I’m improving at this.

Your Home is a Coworking Hub – now what?

Here is a copy of a post I wrote for Workbar, which is one of my companies.   When all of this is over, companies will discover that they don’t need to have massive offices, and individuals will find that working from home looks great on paper until you try it all the time for real.  Workbar is right in the middle of these 2 trends.

Here’s the link to the blog post on their site (which looks a lot nicer than mine, I admit)…

And here is the text…

……

I have a friend who hates his commute and sometimes will idly say something like “I wish I could work from home all the time!”  I’ve told him that this might sound great, but trust me: it’s not what you really want. He’s always ignored that advice because there are some things you have to experience to understand.

After the last 5 days experiencing working out of his busy home with small children running around, I think he is starting to understand. 

My home too is now a coworking center.  My wife works from home, my teenage daughters are doing school online, we have an extra guest here all week, and our dog continues to expect to be walked, fed and entertained.  He is greedy that way. We are on top of each other all day, and still have to get stuff done.  

Luckily I work at Workbar (I’m the CFO) so I’ve learned a few things along the way about to get set up for success.  We’ve implemented some of these best practices in my house, and maybe they’ll help in yours too.

    • Write it down – we developed a “coworking constitution” (see pic) that we all agreed to and signed.  It’s important to have rules and buy-in, especially if you have teenagers who tend not to be interested in either of those things.  Workbar has an operating manual, so we decided we need one too. What are the operating hours? Who can come and go? How do you register guests?  
    • Have “neighborhoods” – one of the things that makes Workbar go is that our spaces are separated into quiet areas, collaboration areas, call-centric areas, and common spaces.  We did the same in our house. This required some imagination; for example, our dining room (which we don’t use at the moment because no one is coming over anyway) is now the quiet area.  My wife’s office is next to the main TV room, so we had to compromise and make that TV room a collaboration area instead of a loud space. Etc. Make this specific and try to stick to it.  
    • Set limits – We implemented a rule around lighting candles (again, see pic).  This one is for me. Basically it means “no scented candles when dad is downstairs because they smell like a store in a mall and it makes him crazy.”  Set “must haves” in your rules.
    • Take reservations – just as you can reserve conference rooms at Workbar, we set up a Google calendar for different rooms in the house to block them off if needed.
    • Decide on roles – At work, I usually hide that I once used to be an IT person, because once people know this, you will be tech support forever (BTW – don’t tell my Workbar co-workers).  I can’t pretend at home though, so I am the technical support person of the family. My daughter Lily is (more or less) the Community Manager. We all load the dishwasher with dirty glasses by the way; some jobs are too much fun for only one person.
    • Get tech enabledWorkbar invests a lot of time and money in our systems.  If you can afford it and haven’t done so yet, invest in a good printer/scanner and in a webcam if you don’t have one on your laptop already.  Get good headphones for long days on calls that used to be meetings. We can help with recommendations if you need us to. Another form of technology that you haven’t thought of is your chair.  We buy chairs for Workbar that you won’t notice after 8 hours in them; that’s on purpose. We want people to be comfortable and productive. A dining room or folding chair, believe me, is not going to work for long.  If you can, invest in something with decent support.
    • Be socialWhat makes Workbar more than a place to work is the community and other people around you. It’s harder to enjoy that these days, but that doesn’t mean you can’t check in with each other occasionally.  If you have young children and can swap off who is watching them for specific periods of time, I recommend that too.  

 

 

 

 

 

If you are working from home in these uncertain times, consider yourself lucky.  I know I do. Hopefully, these tips will help make the best of that situation and keep you productive and sane.

 

It’s strategic

A sentence that usually sets off alarm bells for CFO’s is “It’s strategic”.  This is usually code for a decision that seems to make no economic sense, but is so important to the business, the company “has to” do it anyway.  Examples of this include, but are not limited to (1) an acquisition that the numbers don’t really justify, (2) launching a new product line that’s not correlated with the current one, (3) geographic expansion to a far corner of the world, (4) overpaying for a certain employee, and (5) going all-in on a particular trade show exhibit or booth construction.

Mainly, I have 2 issues with this approach.

First of all, most things that management teams call “strategic” are actually tactical.  M&A is a tactic.  It should get you into a market segment, a geography, a product category, and be tied to a broader strategy.  In theory, your company will have done a build/buy/partner analysis against that strategy and decided that M&A is the tactic that best gets you there.  Even in build stage companies, where deals are often opportunistic buys of smaller or faltering competitors, it’s only a tactic.  If you’re chasing a deal because it’s “strategic”, something has gone awry already.

Second and maybe more importantly, a major decision that cannot be grounded in numbers of any kind is almost certainly going to go badly.  For example: an acquisition that is dilutive on its face should get to being accretive because it helps you raise prices, lower costs, increase sales volume, cut G&A, something that has an economic return.  This return should be based an assumption that an investor can see clearly and question, including seeing the sensitivity analysis around it.  After all, it is their capital or stock you are proposing to use.

If an acquisition does none of these ‘strategic’ things, and is still dilutive except with heroic assumptions, it doesn’t make sense.  Full stop.

Trade shows are trickier.  I shiver a bit when I hear that a particularly splashy trade show presence for a build-stage company is necessary because I know from experience that nine times out of 10, it leads to heartache and lost ROI.  I shiver even more when I hear that it’s for “brand building”.  Brand building is a very expensive game.  And, if we’re spending a lot to build our brand at a trade-show, I would advocate that this needs to be part of a broader strategy including customer service, how we package and deliver our products, fit and finish, you name it.  You can’t overspend at CES and make these other things go away.

As CFO, you have to keep your eye on what matters.  In my experience, something that is truly strategic will show up in the numbers.