Objective

FBTI’s Financial Management Consulting and business development services are designed to assess the financial viability of client firms, recommend constructive corrective action to increase that financial viability, and position firms to sustain short and long-term growth in order to create and sustain jobs. These services engage businesses in a three-phase process that includes a financial baseline, gap analysis, and the development of a near-term action plan. By meeting with the clients monthly during roundtable sessions, we are able to receive financial updates and assist clients through on-going business challenges.

 

Approach

Financial Baseline
The purpose of the financial baseline is to take a snapshot of the firms’ financial vital signs and to examine the extent to which fundamental financial management tools and practices are being utilized.
Business owners participate in one-on-one sessions with a technical advisor team that consist of a CPA, a business management consultant, an engineer with business management and technical experience, a business development officer, and a finance consultant. During the one-on-one session, the advisors interview the client to attain a broad understanding of the firm’s financial management approach, financial viability, immediate risks, and ability to sustain growth. Advisors collect information in two ways; financial diagnostic review and review of current financial documents. Firms are evaluated based on their current financial management practices and their ability to meet existing financial obligations.
During the financial diagnostic review, business owners respond to the following series of questions, which get to the core of the firm’s financial management approach.

• Does the firm have a relationship with an Accountant?
• Does the firm routinely produce financials?
• Does the firm generate financial measures?
• Does the firm have adequate debt service cash flow?
• Does the firm compare its financial performance to industry financials?
Responses to these questions help advisors to understand whether or not the firm is accurately tracking and utilizing financials.
• Does the firm have a relationship with a bank?
• What is the borrowing capacity?

The responses to these questions exhibit the firm’s ability to borrow.
• Does the firm use financial management, project management techniques on the project level?
• What is the state of backlog work?
• What is the mix of revenues and customers?

These questions help advisors to determine how well the firm is managing future opportunities and resources.
An on-site visit is conducted separately from the one-on-one session to review and evaluate firm operations.

GAP Analysis

The gap analysis is a direct response to the baseline assessment. The purpose of the gap analysis is to identify management areas needing corrective action and to make the appropriate recommendations to complete this corrective action. In this analysis, the advising team identifies gaps between the firm’s current practices and the practices necessary to minimize business exposure. Initially, this analysis focuses on firm financials to determine whether significant financial building blocks are being utilized.

Next, advisors evaluate additional firm exposures which could lead to substantial risk, including but not limited to lack of contract/job pipeline, lack of accurate estimating, lack of diversity in the client revenue pool, job management and scheduling, and resource utilization.

During the gap analysis, advisors evaluate the firm’s strengths and opportunities. Referring back to the results of the baseline assessment helps advisors to focus firm goals on areas of strength, minimize firm weaknesses, and take the greatest possible advantage of opportunities available. Carrying out this analysis is illuminating both in terms of pointing out what needs to be done, and in putting problems into perspective.
Once the initial analysis has been completed, advisors work with firms to help them understand the logic of the changes that need to be made in order to adequately limit firm risk. This process allows for firms to understand their internal challenges and be a part of the creation of tailored solutions.

Near Term Plan

Each firm requires an individualized plan of action to mitigate risks and eliminate exposure. The resulting document of the GAP analysis, the Near Term Plan is created by each firm in conjunction with the consultant team. The document outlines the action items that the firm must complete to reach short and long-term management and growth goals and rough timelines within which those actions should be completed. The Near Term Plan provides the firm with a road map for growth, development and sound management. The plan includes projected revenue, underlying assumptions of the projected growth, marketing efforts required to drive the growth as well as the human and financial capital necessary to meet these development needs.

Examples of typical Near Term Plan recommendations include:
• Actions for improved financial management
• Required near term financing; contract financing; working capital
financing or asset/equipment financing and bonding
• Strategies to become ‘bankable’
• Strategies to become ‘bondable’
• Strategies to reduce/eliminate identified risks
• Technical knowledge or guidance that could be addressed through a mentor
• Training needs
• Improvements in computer based tools
• Action for improved project management and scheduling

Each firm is responsible for implementing the recommendations of their Near Term Plan into their existing financial and business management model. Firm development is closely monitored on a monthly basis for up to 24 months from the time of the financial baseline assessment. Support in meeting Near Term Plan goals is available through the advisor team for the duration of that time.

Features and Special Benefits

FBTI’s approach to Financial Management Consulting addresses more than a firms accounting and financial practices; we assess every aspect of firm viability and potential risk. Through a thorough evaluation of factors from pipeline management to financial management, to business management, we gain an understanding of each firm from the inside out that allows us to diagnose and treat both long and short-term problems.

Through our holistic approach to financial management, FBTI is able to improve a firm’s current financial status and understand each aspect of assistance that a firm needs to become sustainable in the long-term. Instead of resolving symptomatic challenges, we focus on resolving core business and financial management issues thereby eliminating negative outcomes.