Five questions with… Paul Prescott, FIDE Advisors LLC

An accomplished CFO/COO with extensive startup and entrepreneurial experience, Paul specializes in business plan development and execution, strategic planning, accounting, and financial management. He has worked for three firms that were successfully sold: serving as Principal and CFO for SourceOne, Inc. an energy infrastructure and management firm; serving as the VP of Finance and Administration for CCBN.COM, an internet based investor relations website provider, and VP Controller for a mutual fund distribution startup company, Funds Distributor, Inc. Early in his career Paul worked for The Boston Company, a private investment bank now known as Mellon Bank Corporation, as a divisional controller in their Securities Lending Group.paul prescott

Paul served as a panelist for the Publicity Club’s recent Masters’ Institute event covering the Financial Challenges of Growing a Small Business. Designed for seasoned corporate communications professionals, the discussion focused on what business leaders need to know in order to stay ahead in today’s rapidly changing environment.

Following the panel, Paul took a few moments to provide some insight into small businesses.

What are the biggest challenges facing small- and mid-sized businesses today?

The biggest challenges are being able to grow consistently, retaining and finding the talent, continual changing environment, and companies not having a predefined strategy. From a financial perspective continually projecting cash flow and having reporting which allows you to run the business is key. Billable hours tracking against capacity and budgeted versus actual hours by client are key for the Public Relations business.  Also, having a consistent sales activity is very challenging for agencies to maintain.

How big a threat is complacency in running a business?

Complacency is always a threat as things change all of the time.  Having an annual strategic plan developed with leadership of your company is a good way to thwart complacency.  This should force you to look at the competitive environment to confirm where you intend to compete and grow.  This should also break down into quarterly goals and reviews to determine where you are compared to your plan and help you reprioritize.  The company should also perform an annual SWOT analysis reviewing the company’s Strengths, Weaknesses, Opportunities and Threats.  Lastly, always ask the question what should we not be doing during your review periods.

How should business owners balance mitigating and taking on risk, particularly when looking at growing your business?

I always try to have a five-year strategic plan that is well thought out and developed by leadership of the company to begin with.  That takes the risk out of making tactical moves because they were well thought out.  The other thing is to always have a plan B and C for every decision you make. If you run 3 scenarios best case, worse case and most likely you should encompass the range of possibilities.  You then should have a plan if the worse case scenario develops shift budget resources, layoffs etc so you know what you will do if growth does not happen.

What are some of the biggest mistakes that you see made today, in terms of running and/or growing a small business?

The biggest mistakes usually come from not having a strategic plan and values established for the business.  Your company’s values should guide you in all decision-making processes.  The value of having a five-year plan that is continually reviewed on a quarterly basis allows business owners to assess where they are against plan and have there been any changes to the landscape.  It amazes me that businesses do not know who their competitors are and how they are competing.  I also find companies that do not have a consistent sales effort run into issues.  The other issue is owners work in the business and do not take time to work on the business.  Lastly, I find that a lot of companies are underadvised.  Opportunities should be explored to have “board of advisors” to see how your peers address similar business issues.  The panel mentioned that a national association might be more forth coming because they do not compete locally.

What do agencies need to understand about cash flow and the important role it plays?

Agencies need to understand cash flow and manage it especially the collection side of it. Companies should also continuously have a cash flow projection so they know where they are and what they have to do to make it through the cash squeeze cycles.  A lot of companies will get a line of credit to help with cash crunch times.