Welcome. I am Gary Patterson, the Fiscal Doctor. My forte is helping people and I love to help people move to sustainable, profitable growth. I have been in every C-suite office along the way in most industries.

I have an interesting background. I speak different languages fluently, things like accounting, marketing, and sales. My experience and background: undergraduate accounting, Stanford MBA, Big Four CPA, and then a series of growth companies. I have been a key member of two Inc. 500 companies, global pilot for a Fortune 500 re-engineering project, and in essence I was a premier site for JD Edwards, but my sweet spot is either middle market companies or helping coach, mentor, and advise early stage companies, from those for whom revenue is an alien concept to “you have a great idea and you need someone to help structure.” I look forward to helping you today pick up some tools that several gray hairs and more gray hairs ago I learned so you don’t have to.

The Fiscal Checkup

The leaders I help like a process. I’m guessing most of you do not want to be CFO or CPA types. You’re great at sales, engineering, or technology, but it’s sort of a necessary evil to have people like me around. I have a process that I developed over the years that I think you will benefit from and enjoy. I have what I call a fiscal clinic checkup. Think of this is as four steps: checkup, diagnosis, treatment, and wellness.

A checkup can really be you listening to talks like this one. You go in and find somebody who can quickly and strategically tell you what’s going well and what isn’t. Perhaps there’s a best-kept secret that you’re not taking advantage of, or there is a scrawny little gorilla out there rapidly feeding to become King Kong—i.e., an 800-pound gorilla—at the absolute worst time. Once we’ve got this, it’s time to do a treatment to fix things. I’m big on priority and focus. Priority and focus get stuff done and make you money, and when you start making more money, then you can do whatever you dream or desire. As an entrepreneur or a small business owner, there’s a reason you went into this business and there’s a reason you want to make money. As my mentors Bill and Eileen used to tell me, if you make more money on the top line and keep more of it, life usually is more fun.

In a world where you really don’t have all the money, people, and time you want, where should you look for either a blind spot to avoid or a place you can build on as a strength. I have five comments I’m going suggest today.

Know Where You Make Your Money

Number one is, you need to better understand where you make your money. A question that I ask is, “How comfortable are you that you really and accurately know your ten best customers by profitability?” I’m not talking the biggest. I’m not talking the nicest. I’m talking about where you make your money. If you think you know that, then where can you do a better job to bid and control projects that are the lifeblood of your business?

Know How to Spot Change

Another issue that you really need to think about is the 800-pound gorilla that everyone talks about but no one does anything about: change. Think of it this way: Last month I went to Orlando to speak at a conference. I pull out my phone and I call an Uber. Why is that important? Because five years ago I would have called a cab, a limo, or a shuttle. And now I can pull out my phone and get something that is cheaper, cleaner, better, quicker, and I can see where it is. It absolutely demolishes an industry. Where is someone out there looking to demolish you? Eat or be eaten.

Know How to Plan for Change

Another area that can be either an opportunity or a risk is the issue of what I call “overly optimistic balance sheets or processes.” Let me explain a little more about that by going back to Uber. I mean, it works. It was a lot cheaper than a cab. Think of that cab company; think of the people that own a cab company or depend upon those cabs for tasks such as servicing them; they were not prepared for change. The cab company wasn’t and the people for whom those cabs are a major customer probably got blindsided because they weren’t thinking about how something could change their client and major customer, or what to do if it happens? So change can be good. Or evil. Good is better.

Understand Opportunity Cost

Then there are good, old-fashioned opportunity costs. You have heard about the idea of sunk costs and today, I’m going expand on that by talking about two things: money and processes.

First, money. Continuing with Uber, most of the cab companies own what is called a medallion, meaning they have bought something at up to half a million dollars, plus or minus. What do you think happens to the value of a medallion for a taxicab that’s running around Boston, New York, or Atlanta and all of a sudden Uber just shows up. They sign somebody up. That medallion probably isn’t worth as much as it used to be.

Second, processes. I’ve been there with some of these growth companies. We were so proud one time of how well we had reviewed the processes and we put up the butcher paper on the wall and we did everything and it was great. We come back about two weeks later and the rest of the executive team and I were feeling pretty good.

We did something, which you should do: we asked, “How do you like this process flow?” They said, “Oh golly, we stopped doing that after two days.” The world has changed. It is hard to keep control of processes, and yet if you don’t, it costs you more. If you don’t know what your people are doing, you had better document those processes and do a better job of getting them to help tell you, which we thought we had done. We evidently needed to redo it again. So money and processes change. How good are you at periodically reviewing A) your processes and B) thinking about where you might be a little too optimistic on that balance sheet.

Know When You Are Kidding Yourself

One more issue for the day. You can call it puffery or you can call it facing up to the truth, whichever you prefer. Say you’re good at selling. There’s a point at which, when the stories become too much far-fetched, you start to kid yourself, you start to drink the Kool-Aid, which is not too good. Here is the really bad downside to that: your key stakeholders start drinking your Kool-Aid, too. They don’t know any better, and your people who are trying to run the business, if you are giving them inaccurate facts and an inaccurate basis to run their part of your business, they’re going to make mistakes. How do you balance this? It’s not easy. Sales are necessary. No sales, no company. Too much puffery, too much not facing up to the facts, and you create your own problem.

Normally when I do an interview, people ask me either what I am concerned about or what I am telling my clients at this time. So here are three things I’m going to suggest you consider. First, where might you be taking one of your key stakeholders for granted a little too long? Perhaps it’s an employee, a customer, the bank, your key people, your spouse, or a friend. Next, where is your cash going to be six months from now? And third, where is there a little itty-bitty 75-pound scrawny gorilla happily and contentedly growing up ignored until they’re going to become the 800-pound gorilla at the absolutely worst time possible? It’s pretty inexpensive to give yourself a very reasonable fiscal checkup to see where you need to diagnose or treat for wellness.