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Client Story: Fiera Private Debt

Client Profile

Fiera Private Debt, a subsidiary of Fiera Capital Corporation, is a leading pan-Canadian private debt firm. It specializes in providing financing to developers, property owners, and mid-market businesses, as well as securing corporate and infrastructure debt financing.

Headquartered in Laval, Quebec, with offices in Montreal and Toronto, Fiera is renowned for its highly disciplined, credit-driven approach to investments that creates significant returns for their investors through collaborative, proactive financial strategies.

The Client’s Need
When Dino Fracassi, Managing Director, Business Finance at Fiera, started working with his new client, a leading supplier of custom products to brick-and-mortar retail locations, he knew that they needed to go in a new financial direction.

His client had already extended their credit beyond their means, and had been put into the “special loans” category at their bank. Needing additional working capital to stay afloat, they approached Fiera for assistance.

Dino reviewed their organizational structure and determined that for the company to transition back to traditional lending from their bank, they needed a significant adjustment to their current financial and operational stewardship. To accomplish this, Dino turned to The CFO Centre.

“Paul Nagpal, COO at The CFO Centre, was already part of my professional network, and our two organizations had successfully partnered on previous occasions. I offered him the chance to help with my new client, and gave him an idea of the perfect CFO for this file: someone with retail and B2B manufacturing experience who had a proven track record of successfully navigating companies through rough financial patches. Right away, he told me about Barbara Palmegiani, one of his company’s principals. After learning about her credentials and speaking with her directly, we knew we had found the right person to help get my client where I needed them to be.” – Dino Fracassi, Managing Director, Business Financing, Fiera Private Debt

The CFO Centre Solution

Barbara went into Dino’s client as the full-time, interim CEO with a mandate to restructure the company by assessing and resolving the cash burn, and work collaboratively with the executive team to make the necessary changes to return the company back to profitability. Her previous executive financial and operational roles gave her the experience to identify immediate insights into what needed to be done in order to improve their strategic direction and implement the appropriate operational and financial processes and controls for a company of their size, including:

  • Prioritize cash management best practices
  • Identify and fix challenges to Cost of Sales
  • Take control over expense management optimization
  • Create financial, forecasting, and budgeting tools and processes
  • Coordinate cross business collaboration to efficiently align with corporate goals, objectives, and strategic direction
  • Replace their dated technology with current, cost effective financial and operational systems to enable the executive team to formulate insights that enhance strategic decision-making
  • Identifying, monitoring, and reviewing key performance indicators (KPIs) and adjusting where necessary to help maximize growth
  • Strategically reallocate human capital to help increase cash flow
  • Improve procurement and inventory management processes

Two other critical issues needed to be addressed in order to return the company to profitability:

  • The company owned a subsidiary in China created to directly serve the growing East Asian market. The location was proving unsustainable, lacking growth potential, and costing too much money to continue operating profitably.
  • Their domestic operation was currently working out of a 150,000 sq. ft. space. It was determined that they could operate more efficiently and at a significantly lower cost with less than half this space.

“Barbara’s commitment to helping my client succeed was impressive. She took a deep dive into every aspect of their business, and quickly identified the roadblocks that were causing cash flow and growth issues. Barbara continues to work transparently with Fiera and the executive team, having earned and built our trust.” – Dino Fracassi, Managing Director, Business Financing, Fiera Private Debt

The Results

Barbara put her plan into action, which continues to yield positive results for Dino’s client.  They are now able to focus from top to bottom on fixing the smaller problems, having developed a strategy to tackle the bigger ones, including:

  • An improved workplace culture driven by collaboration
  • Streamlined internal processes with minimal waste and duplication
  • Increase in cash flow due to better financial processes and controls, as well as a reorganized workforce
  • Better financial accountability and strategic decision making through monthly financial meetings and reviews
  • Additional financial support from government-sponsored pandemic relief programs

Thanks to The CFO Centre’s vast professional network, Barbara was able to connect with overseas legal and real estate professionals who could help transition the client’s operations in China, which resulted in immediate savings.

Barbara’s extensive background negotiating with landlords enabled her to identify and execute a win-win solution for both Dino’s client and their landlord, which will significantly improve their bottom line going forward.

In less than one year, Barbara’s involvement with Dino’s client has already set them on the path to better long-term financial health and sustainable organic growth.

“Working with Barb has been fantastic. We asked The CFO Centre for what we needed in a theoretical sense, and they connected us with a perfect match. We wouldn’t have been able to do that on our own. I’m excited for the future of my client’s business as they once again become able to maintain profitability, and ultimately be able to return to working with the bank. Thanks to Barb and The CFO Centre, it’ll happen sooner rather than later.” – Dino Fracassi, Managing Director, Business Financing, Fiera Private Debt

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Client Story: Walker Homes Ltd.

Client Profile

Located in Port Elgin, Ontario, Walker Homes Ltd. specializes in constructing beautiful new homes that stand the test of time. Co-owners Ryan and Brooke Walker carry on three generations of family homebuilding tradition, helping to develop thriving communities with each new build.

Walker Homes goes the extra mile for its customers by guiding them through each step of the home-buying process, all the way to closing day. Your family can then enjoy the 9-foot ceilings, Napoleon Gas fireplaces, luxurious Canadian-made kitchen cabinetry, and brick exteriors that come standard with each Walker home.

The Client’s Need

Walker Homes had been steadily busy for a number of years in a strong housing market. However, the company was quickly outgrowing their financial system, which consisted of manually entering projects, revenue, costs, and other important data into Excel spreadsheets. They also handled procurement verbally without a purchase order management system, and tracked hired contractors by cheque stub.

This system offered no way to generate financial reports, budgets, or forecasts hampering business growth.

In January 2019, the Walkers discussed their concerns with their accountant, who suggested they contact The CFO Centre for assistance in getting their financial management under control.

“Brooke and I wanted our time back from working with a system that no longer met our needs, so we were intrigued by what The CFO Centre had to offer. When we were introduced to Byron Dyck, we were thrilled to learn that not only was he intimately familiar with the Port Elgin area, but that he also used to run his own construction company before joining the firm. We couldn’t wait to get started.” – Ryan Walker, Co-owner, Walker Homes Ltd.

The CFO Centre Solution

Byron drove out to the Walkers’ location for a fact-finding visit to learn more about their business, listen to their pain points, and pull from his experience as a construction business owner and a CPA to discuss possible solutions that would be part of their overall action plan.

“Byron paid close attention to where the business was now and where we wanted to take it. It was refreshing to speak to someone who knew our business, understood what we were facing, and could offer the advice we needed to succeed. We felt so confident that he was the one who could help us that we signed the engagement letter that same afternoon.” – Ryan Walker, Co-owner, Walker Homes Ltd.

Byron reviewed his clients’ goals and created scenarios in order to put together an ambitious financial strategy to move their business forward. The highlights of the plan included:

  • Decommission the use of Excel for financial recordkeeping
  • Install specialized integrated construction software
  • Fully revamp their estimating, invoicing, cost reporting processes system to better track projects
  • Increase financial report frequency to once per month
  • Put budget and forecasting processes in place
  • Hold monthly financial review meetings to discuss results, make changes where necessary, and track progress
  • Negotiate better payment terms with creditors

Walker Homes also enabled Byron to work remotely from his location, granting him network access to their system so he can mentor them through the implementation and use of their new software in real time.

Byron set this remote system up because The CFO Centre focuses on collaboration, and fosters strong working relationships with their clients to implement strategies completely customized to their needs. The ultimate goal is to keep CFO Centre clients competitive and well-positioned for long-term sustainable growth.

The Results

After working with Byron to implement the plan, Walker Homes has seen an increase of 300% in sales volume. In addition, by the end of 2019 they had pre-sold their entire 2020 inventory, and as of November 2020 they’ve sold a vast amount of their 2021 inventory, even under the current year’s challenging economic climate.

Behind the scenes, the clients saw results that improved the overall operation and financial health of their business, including:

  • Significantly improved financial management across the board
  • Improved scalability for increased volume of projects
  • Monthly review of financial statements to report on individual projects
  • Seamless record keeping and retrieval
  • Favourable payment terms from their biggest creditor, improving cash flow to stimulate growth
  • Additional funding secured in response to the COVID-19 pandemic
  • Hiring of additional staff to support data entry work

Byron continues to work with Ryan and Brooke one day per week, on call to answer questions about their new systems and provide oversight to their entire financial structure. For almost two years, the strategic partnership between Walker Homes and The CFO Centre has solidified into a professional relationship built on trust and experience, something that the Walkers are quick to recognize.

“Byron is always there when we need him. All it takes is to send him a quick text and he’ll get on the phone or Facetime to answer a question or help us solve a problem. We’re happy with the results and the ongoing support from Byron and The CFO Centre as we keep moving our business forward. In fact, we think of Byron as more than part of the team – we consider him family.” – Ryan Walker, Co-owner, Walker Homes Ltd.

For more information about Byron Dyck.

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The Operator Highlights

Thriving in the New World Operator

In this series of Thriving in the New World, The CFO Centre explores what exactly it means to be an operator in the “new world” and essential elements that allow your business to thrive.

Most owner-operated businesses would agree that increased cash and more access to capital would help them exceed their business objectives.   Recent societal and economic realities have strained or even exhausted cash resources for many companies.   Even those companies enjoying unprecedented growth are scrambling to fund unexpected expansion.   The essential building block for liquidity has always been Operational Excellence, defined as consistent and reliable execution of each business’ unique processes to acquire and satisfy customers.

High performing operations processes have always been the foundation for generating cash from within the business.  Equally important for those business owners seeking to thrive in a post Covid world is the critical need to demonstrate operational excellence to third party financing sources.  Seeking to expand your credit line with your bank or pursuing additional investors will require the business owner to present a clear and compelling story for how the company will produce profits, cash and sufficient return on capital.

The traditional role for a CFO in Operational Excellence is to provide accurate financial information and act as leading voice in cost reduction.   Creating a truly reliable foundation for generating cash and profits; often requires financial leaders to contribute more than they have ever before.  The experience, attributes and mindset of many CFO’s positions them to act as a catalyst for delivering cash and profit maximization across the full range of business processes.

Fix the Finance Foundation

The processes and practices of the finance function must be viewed as rock solid by the owner and the rest of the organization to create a path for participation or preferably leadership of broader operational improvement initiatives.

There are three key functional outcomes that must be in place to give the finance team the credibility to extend its involvement to other operational processes.  Without these deliverables in place, the organization’s ability to undertake deeper process review will be severely impaired.

The first base level capability is timely, accurate and useful financial reporting.  If the leaders of the company are not receiving this level of financial reporting, then it is unlikely that the finance leader has earned the right to apply their team’s expertise to general operating processes.

The second must have competency from the finance team is an understanding of the cost drivers for the business. The understanding of costs does not have to be perfect; however, there must be a methodology in place to capture and analyze the complete range of items that form the cost of  products or services

The third requirement for finance team effectiveness is to have a solid grasp of the company strategies that will drive future growth and success.   If your finance staff are seen just as number crunchers it will be difficult for them to contribute to operational initiatives.   The first installment of our CFO contribution series suggests a practical approach to engage your finance leader in developing future proofing strategies.

Own Cash Flow

The responsibility of generating positive cash flow clearly belongs to the CEO and the entire organization; however, expanding the mindset of your financial leader to thinking and acting as the owner of cash flow can be a powerful tool.   Finance and accounting staff have historically only been tasked with producing cash flow forecasts based on inputs from other leaders.

We suggest making a clear organization signal showing reliance on the finance team to go beyond analyzing cash inputs and outputs. The new expectation should include concrete actions aimed at increasing the amount or timing of cash inputs while reducing the amount or timing of cash outputs.  One example of a high impact cash inflow recommendation is to convert the finance team’s experience with both external and internal obstacles to timely collection of receivables into operational practices that eliminate these obstacles in advance.

Refine and Revolutionize Business Processes

Each organization varies in complexity of business processes, capabilities of process analysis, and often very different levels of CEO interest or prioritization of process improvement initiatives.  Given the nature of many small to medium-sized organizations, there can often be aptitude and attitude gaps leading to under prioritizing  detailed data-driven process review work.

Even a small finance team can become the internal champions for generating improved results achieved through documenting and enhancing your most critical processes.   Elevating the CFO to, at minimum, a shared level of ownership with the firm’s operational leaders will apply complementary expertise to process review efforts.  Converting process improvements into additional cash and profit can often involve just a few additional questions that may be missed by other functional areas.

Create Compelling Capital Acquisition Content

There is a high probability that pursuing operational excellence will lead to capturing more cash from optimized processes and deliver positive returns in the short term.

The longer-term benefit of intense CFO involvement in the operational aspects of the company is the ability to work with the owner to put a more convincing investment case forward to potential sources of debt or equity financing.   Revenue growth is understandably the primary focal point for future investment; however,  the business case is significantly strengthened by a tangible action plan showcasing gross margin enhancement, profit improvement and positive cash generation.

Reviewing, examining and revising processes has always been part of running a successful enterprise.  Although most companies have made improvements over the life of their business; there is often a substantial opportunity to further optimize the organization’s capability to convert every dollar of revenue into more profit and more cash.   One of the positive byproducts of the turmoil related to the pandemic is that business owners, management and employees are more aware and likely more open to the need for change than ever before.   The time is right for businesses to count on their CFO to bring a thorough, disciplined methodology to deliver operational excellence and improved financial results. Uncover more.

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Thriving in the New World Strategist

Thriving in a New World Strategist

In the introduction to our CFO Contribution Series, Thriving In the New World Strategist, we suggested that most business owners may not be well served by high-level, third party driven, divergent strategic exercises. Certainly, there is significant value in undertaking far reaching, blue sky thinking. Most small to medium size organizations will be better served by incorporating their own foresight into targeted, most probable future scenarios developed by highly engaged participants directly linked to the success of the business.

There can be no doubt the Covid 19 pandemic has led to unprecedented change for most businesses. Revenue levels have plunged for some firms while others are experiencing unexpected increases in new customers and unforecasted demand levels. Supply Chains have been disrupted. Optimizing employee productivity and satisfaction have become more art than science. Short-term cash availability and long term capital requirements are highly uncertain. Even the most confident experts are reluctant to make a call on the economic climate we are likely to experience a year from now or even six months from now.

Success in this uncharted New World requires business owners to make effective decisions to address today’s challenges and to establish a strong market position in an uncertain future. We call this Future Proofing your business. The path forward will be unique for every enterprise. For most businesses, the contribution of an integrated senior financial leader can be a major factor in making the best decisions for steering the business towards a successful future.

Owner operators will particularly benefit by injecting their full time or part time CFO into idea

generation and implementation planning to future proof their business using the following four-step process.

Developing Most Probable Future Scenarios

The insight of the CEO along with sales and market-oriented management will understandably be

essential to develop and select three or four most likely market scenarios. Important dimensions for assessing your business’ future would include revenue outlook, new revenue sources, changes in access to customers or preferences of customers, competitive forces, regulatory factors and assessment of staff effectiveness. Identifying these factors specific to your business and your industry should be considered in conjunction with the team’s projections of potential future operating environments.

Involving a holistic professional with the ability to stretch the team’s future thinking to include the full spectrum of potential obstacles often leads to more robust, more complete future scenarios. Team members should expect the organization’s financial leader to embrace the uncertainties inherent in guessing at potential futures while also expecting them to act as a catalyst to describe the leading scenarios with sufficient clarity to facilitate resiliency testing and implementation planning.

Leveraging Emerging Technology

The pace of change over the past five to ten years combined with the recent accelerated societal and economic changes linked to the pandemic forces all businesses to adapt and respond quicker and more intensively than ever before. Adapting and responding effectively requires timely and appropriate application of emerging technology solutions to uncover new connections to customers and to unlock methods to streamline and enhance business processes.

A few of the more pervasive and perhaps highest potential technology trends destined to shape the future are Artificial Intelligence, Blockchain Technology and Internet of Things. Finance leaders bring essential analytical skills, as well as opportunity and risk assessment expertise. These attributes will help the business select the most advantageous solutions and deploy these applications to deliver favourable returns.

Stress Testing Scenarios and Strategies

Once the business has collaboratively generated their high probability future scenarios and articulated corresponding strategies to maximize results; a critical need emerges for disciplined evaluation to ensure the selected paths forward can stand up to expected obstacles and deviations.

The CFO’s involvement in scenario testing is likely to be most accepted and welcomed by the business owner and the future proofing team. A New World CFO is one that passionately embraces uncertainties and optimism while maintaining their proven ability to rigorously apply a check and balance approach to the team’s chosen future scenarios and strategies.

Commitment to Highest Impact Initiatives

The hardest decision for many organizations undertaking future proofing activities during today’s tumultuous environment will be to commit the necessary financial and human resources to those chosen few initiatives expected to best position the business over the next six months to five years.

Creating the internal and external confidence to act now often hinges on the development of concise, compelling business cases to define the initiative, its costs and expected profits. The involvement of your financial leader in the entire future proofing process will significantly enhance the quality and effectiveness of these strategic business cases. In situations where the organization is seeking external financing or participation from partnering organizations; the voice of an informed, engaged, credible CFO will be a significant factor in securing the desired external support.

Business owners and their management teams have the responsibility to navigate the firm through today’s urgent challenges and opportunities. They also bear the greater responsibility to establish direction and take action to prepare the organization to succeed for many years ahead. A New World CFO welcomes this responsibility and possesses the knowledge and dedication needed to deliver results today and in the future. Discover more.

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Thriving in the New World Leadership Series

Introducing the Thriving in the New World Series

Thriving in the New World series is The CFO Centre’s unique approach on how we can truly make a difference to your business. Explore how a transformational CFO, as a Strategist, Operator, Leader and Guardian, is essential to future proof your business.

The Covid-19 pandemic has transported almost every business into a new reality with greater obstacles and greater, or certainly different, opportunities. Many business owners are operating at ground level to address challenges that threaten the livelihood of their employees, the continuity of their customers and the future of their business.

Now is not the time for strategic retreats, or high-level consulting reviews. Entrepreneurs that thrive in this new world will be those that combine their experience and knowledge with the insights and expertise of involved, committed individuals. These entrepreneurs will possess the mindset to navigate each day’s most pressing issues while charting the course for the business to move forward.

Now is the time to ensure your business is enjoying the leadership and hands on guidance of a New World CFO. Accenture defines the new CFO as a “value-oriented individual who views the world through a different lens” . They see themselves as value architects whose primary focus is helping the organization drive profitable growth.

All businesses have staff or advisors in place to manage the financial requirements of their business.

Perhaps more than ever before, businesses of all sizes, and all stages of development will benefit from finance oriented leadership that goes far beyond the numbers, far beyond basic reporting and far beyond being the controller or watchdog for the business.

If you own and operate a small to medium-sized business, you may have gotten by without access to the “C” level expertise of an experienced CFO. Thriving in your new world may require access to a proven, holistic financial leader driven to grow your business profitably.

This four-part – New World CFO series will provide specific, understandable and implementable information designed to help your business thrive and survive. Uncover more about the benefits of futureproofing.

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