Corporate Finance Strategies

Profit, not revenue, is the key to success. Here's a 5-step Margin Analysis framework to track profit vs revenue As a financial consultant, I've worked with businesses struggling with profitability due to a lack of in-depth margin analysis. Managing your margins can be a game-changer for your bottom line. I work with clients on shifting their mindset that margin analysis isn’t just a one-time strategy; it’s a continuous process. To help clients stay on top of their game, I put together a checklist of daily, monthly, and quarterly habits to be sure you’re always optimizing your margins. Daily Habits: 1) Review Sales and Cost Data: Do a quick check if daily sales are in line with your projections and monitor unusual changes in costs. 2) Track Key Performance Indicators (KPIs): Focus on daily KPIs such as gross margin percentage and average order value to identify issues. Monthly Habits: 1) Analyze Margin Trends: Compare your current month’s margins against previous months to spot trends or anomalies. 2) Update Financial Projections: Adjust forecasts based on actual performance and any market changes. 3) Review Profitability by Product/Service: Identify which products or services are underperforming and consider adjustments to pricing or cost structures. Quarterly Habits: 1) Conduct a Comprehensive Margin Analysis: Deep dive into your financial statements to assess the health of your margins. Look at (COGS), operating expenses, and net profit margins. 2) Reevaluate Pricing Strategies: Based on your margin analysis, adjust your pricing strategy to ensure optimal profitability. 3) Optimize Cost Structures: Review your cost management practices and look for opportunities for cost reductions or process improvements. Hope this simplifies the process, and helps to start building these habits. Also, I've attached a brief guide on How To Strategically Improve Profit Margins If you need help developing and executing a financial strategy DM me ___________________ Please share your thoughts in the comments Follow me, Beverly Davis for more finance insights

Your financial report shows 40% growth.  But investors just pulled out. What are they seeing that you're not? The startup founder couldn't understand what happened. His reports showed impressive growth metrics. Yet investors were walking away after reviewing his financials. His executive team was confused. His board was losing confidence.  His funding round was in jeopardy. His reporting? Beautiful dashboards hiding critical structural problems. Here's what we discovered: - The reports were technically accurate but strategically misleading: - Revenue recognition was aggressive - Cash burn was buried in supplemental schedules Key risks were minimized or omitted. The framework we implemented: 1️⃣ Investor Lens Analysis – Restructured reports to highlight what investors actually care about 2️⃣ Cash Reality Spotlight – Brought cash flow to the forefront of all reporting  3️⃣ Metric Standardization – Aligned KPIs with industry benchmarks investors recognize  4️⃣ Risk Transparency – Created dedicated sections for contingencies and challenges  5️⃣ Narrative Alignment – Ensured story and numbers told the same truth The results? ✅ Funding round successfully closed  ✅ Investor confidence restored  ✅ Leadership gained true financial clarity Later, the founder admitted: "We were reporting what made us look good, not what would build trust. The difference cost us millions." Financial reporting isn't about showcasing strengths. It's about building credibility through transparency. Don't let poor financial reporting sabotage your growth. I help startups create investor-ready financial reporting that builds trust. DM "Reports" to learn more. #financialreporting  #businessgrowth  #finance

Think this deal is safe? Think again. Most people chase returns. They see double digits and their brain hits “GO.” But that’s the wrong first question. The right one is What risk am I really taking to get that return? Before I ever say yes to a deal, here’s what I look at 1. Risk vs Return Do I have the liquidity and the stomach for this? If not, it’s a no even if the numbers are shiny. 2. Borrower Strength Track record, decision-making under pressure, and ideally… a phone call that doesn’t raise red flags. 3. Financials & Skin in the Game I want to see capital invested, not just effort. Do the operators have real dollars in play? Is the balance sheet healthy, or built on duct tape and hope? Strong equity. Solid reserves. Real commitments. 4. Market Demand Are people moving in or moving out? Is the job growth and are the industries balanced 5. Exit Strategy If this borrower gets hit by a meteor tomorrow, can someone else finish the job and sell it? Quick Checklist ✅ ☑️ Risk fits my personal liquidity ☑️ Sponsor is solid, references check out ☑️ Financials show strength: reserves, margin, and room for error ☑️ Market demand is real, not wishful thinking ☑️ Multiple exit options Too many make emotional investment choices. Cold logic beats hype 10 times out of 10. If you want long-term wealth, you don’t just buy the return… You underwrite the story behind the return. Do you lead with return or risk when investing? Want a better framework to vet deals fast? Let’s swap checklists.

How This Space Tech Startup Secured $5.5M (Without Giving Up Equity). Last year, I invested in Raven Space Systems. They developed a novel way to 3D print aerospace hardware: • Faster • Cheaper • More efficiently Before pursuing VC money, they secured $5.5M through grants from NASA, Air Force, and The National Science Foundation. This was pure capital for R&D to: • Validate their technology • Access specialized facilities • Build government & commercial credibility Incredible benefits, yet not without challenges. Applications are competitive, time-consuming, and often come with restrictions on fund usage. 6 steps for capital-intensive startups to access non-dilutive funding: 1) Find the Right Grant Programs → Focus on SBIR (Small Business Innovation Research) → STTR (Small Business Technology Transfer) programs. → These offer billions annually in non-dilutive funding for early-stage R&D. Key Agencies: NASA, NSF, DoD, (AFWERX), USDA, and others. 2) Prove Your Tech Solves a Big Problem → Funders want mission-critical solutions over "cool" innovations. → Eg: NASA funds projects that improve performance in space exploration. → Use data or case studies to demonstrate the urgency of the problem → And the effectiveness of your solution. 3) Develop a Clear Proposal → Specific R&D milestones → Measurable outcomes → Commercialization plans Align your proposal with the funder's mission and values and highlight how your project advances their goals. 4) Leverage Strategic Partnerships Strengthen by collaborating with universities, labs, or prime contractors. E.g: Raven partnered with the University of Oklahoma for material testing and technical validation. Partnerships mean specialized equipment and critical expertise. 5) Engage with Grant Officers → Reach out to program managers before applying → For insights on aligning your application with agency priorities → Clarify any ambiguities and tailor your proposal accordingly 6) Iterate And Improve → Treat rejections as opportunities to learn → Many startups win grants on attempt 2 or 3 → Refining on feedback can significantly improve success rates After validating their tech with grants, Raven then raised VC to: • Scale manufacturing • Build sales teams • Enter new markets Validate with grants. Scale with VC. Combine both for a winning position. ____________________________ Hi, I’m Richard Stroupe, a 3x Entrepreneur, and Venture Capital Investor I help early-stage tech founders turn their startups into VC magnets Enjoy this? Join 340+ high-growth founders and seasoned investors getting my deep dives here: (https://lnkd.in/e6tjqP7y)

62% of June.so revenue comes from the US, but our entire engineering team is in Europe. If you’re not in the US, it can feel impossible to break in. But here’s the truth: it’s not. Less than 18% of early-stage funding in Europe crosses borders. Founders aren’t failing to raise—they’re failing to expand. Breaking into the US market is hard. Competitors build trust by simply being local. But it’s not about Americans looking down on outsiders—it’s about opportunity: “If you’re not here, someone else will be.” Here’s how we made it work at June: 1. Start a US snowball We launched at YC, where 50% of our batchmates became users. Word of mouth from that initial group keeps compounding today. 2. Offer strategic discounts After YC, we approached US accelerators and incubators, offering discounts to track portfolio performance. It worked—our US user base grew fast. 3. Be US-friendly Charge in USD. Support US hours. Write your website in American English. It seems small, but it matters. 4. Immerse in the US Hire people who’ve lived there. Keep a founder in SF. Join the conversations US buyers are already having. 5. Use your split as an advantage Being in Europe is a strength—it lets one founder focus there while another builds momentum in the US. _____ If 60% of your market opportunity is in the US, you can’t wait. The longer you delay, the harder it gets. Start today. Would love to hear your thoughts.. What’s worked for you when expanding internationally?

33% of CEOs don't trust their CFOs. The 5 areas I focus on (first 90 days): 𝟭) 𝗥𝗲𝗱𝘂𝗰𝗲 𝗘𝘅𝗽𝗲𝗻𝘀𝗲𝘀 The first thing I do with a new client is lower their expenses. This provides a quick win and frees up resources. Common cost-cutting opportunities I see: • Extra licenses • Unused subscriptions • Costs that feel worth it but are not –– 𝟮) 𝗦𝗵𝗮𝗿𝗲 𝗜𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝗖𝗹𝗲𝗮𝗿𝗹𝘆 If the books are messy → I clean them up. If the books look good → I put together the core financial statements and make sure everyone understands them. I like to involve the whole team by opening the curtains wide on the company’s financials. This increases trust and accountability. –– 𝟯) 𝗢𝗽𝘁𝗶𝗺𝗶𝘇𝗲 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗣𝗿𝗼𝗰𝗲𝘀𝘀𝗲𝘀 I work with clients to streamline: A) Invoicing Many of the cash flow issues I see with clients can be traced back to slow collections. So I make sure invoices are going out in the correct amount and in an easy-to-understand format. B) Closing the books faster I understand the urge to close the books and move on. But clean books don’t mean much if you don't study them shortly after closing. That’s where I work with clients to get their books ready in about half the time. The result is ample time for reviewing performance. C) Monthly financial reviews A good financial review = meeting with the accounting team to study the P&L and Balance Sheet and investigate any budget variance Your goal is to explain each variance and put together an action plan to reverse any concerning trends. –– 𝟰) 𝗖𝗿𝗲𝗮𝘁𝗲 𝗮 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗣𝗹𝗮𝗻 We set goals and KPIs, determine what’s doable, and come up with a specific roadmap. For your strategic plan to work, it needs to tie back to the financials and be broken out into manageable steps. –– 𝟱) 𝗜𝗺𝗽𝗿𝗼𝘃𝗲 𝗖𝗮𝘀𝗵 𝗙𝗹𝗼𝘄 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 I’ve yet to work with an SMB that didn’t have any room for improvement here. Collections tend to cause the lion’s share of cash flow issues. But clients often overlook the other side of the equation: when and how they pay their own bills. It’s pretty common for owners to pay bills as soon as they get them. But I don’t recommend it. It's better to wait until the day they’re due and set them up for autopay. This way you keep cash in the business longer without running the risk of dinging your credit. Took me a LOT of scrambling in my early days to have this clarity... But after helping over 75 SMBs, I feel confident these are the first steps a CFO should take with a new client. If you enjoyed reading this, let me know and follow me for more strategic finance, SMB, and business content. — Need help with your finances? Feel free to send me a DM. Always happy to help.

EBITDA isn't everything. Recently, I had an enlightening conversation with a business owner who was contemplating a merger with a partner service provider. On the surface, the synergy seemed promising — two companies of similar size, complementary services, and a shared history of collaboration. However, as we delved deeper into the financials, we uncovered critical insights that could have easily been overlooked. While revenue and earnings are often the main early focus in M&A discussions, we discovered that the cash conversion cycles of the two businesses were markedly different, one business was using expensive debt (with no returns, revenues were falling), and differing strategies on operational expenses. Key takeaways: 💸 Cash Conversion Cycle Matters: It's vital to understand how quickly a business can convert its investments into cash flow. A lengthy cash conversion cycle can signal inefficiencies that can derail potential synergies post-acquisition. ⚔ Debt Usage is Double-Edged: While debt can fuel growth, mismanagement or the wrong debt can choke it. Analyzing the debt levels and capital structure is crucial to assess the potential risk and financial stability (and potential opportunities) of the acquisition target. 👑 Culture & Strategy are King: These are important topics to explore when considering M&A. While the black and white figures in a P&L are not the full story, the financial statements can be indicators for cultural and strategic differences to explore. For the right acquirer, these areas can be "low hanging fruit," areas ripe for improvement. For a business where owners will now be partners, it could be a source of ongoing tension or worse -- instead of 1+1=3, the businesses are worse off together than when they were apart. This business owner was super sharp, and had a sense of some of the concerns I raised. However, this is the value of having an advisor in your corner. In a few minutes, I was able to outline a handful of areas to discuss deeper or consider fully as they considered this potential transaction. #mergersandacquisitions #finance #entrepreneur #investmentbanking

Static budgets are insufficient for most long-term planning. Rolling forecasts effectively complement annual budgets, allowing organizations to adapt more quickly. Here's the framework I use. 1. Define the Objective Understand the purpose of the rolling forecast. Identify who will use the forecast and for what decisions. 2. Determine the Time Horizon Decide how far into the future the forecast should go. Choose appropriate forecast increments (weekly, monthly, quarterly, yearly). 3. Assess Forecast Detail Evaluate the risks of inaccurate forecasts. I always ask "what's the cost of being wrong?" Invest more effort for higher accuracy if the consequences of poor decisions are significant. 4. Select Contributors Who are the contributors and who are the stakeholders? Include those who are the point-people on getting, sanitizing, and preparing the data. In one large telecom company I worked with, there were close to 30 department heads accountable for their rolling forecasts. They were responsible for delegating responsibility within their groups. 5. Identify Key Value-Drivers Focus on critical business drivers and dimensions rather than every line item. Determine both quantitative and non-quantitative elements that drive value. 6. Vet Data Sources Ensure data quality and accuracy. Use reliable sources to feed into the rolling forecast. 7. Establish Scenarios and Sensitivities Utilize 'what-if' analyses to explore various financial outcomes. Update scenarios as new information becomes available to stay current. Be careful not to create too much noise in the forecast to distract from what's important. 8. Track Performance Actualize the forecast and monitor variances between actual and forecasted performance. Understand the causes of deviations and adjust strategies accordingly. What other steps would you include?

Learn about Departmental Budgeting 👥 Departmental Budgeting is one of the best ways to build a bottoms up budget that is both accurate, and defensible But the process can be complex & labor intensive, especially if it’s your first time Let’s do a deep dive on how you can create a departmental budget ➡️ What exactly is Departmental Budgeting? Departmental Budgeting is the process of preparing a budget based off of the inputs from Department Heads ➡️ When Should You Prepare a Departmental Budget? There’s no right or wrong time, it can all depend on your: ⚫ Size of your company ⚫ Amount of departments ⚫ Transparency level available to Each Department Head ⚫ Tools & systems in place for tracking & forecasting The general idea is that Departmental Budgeting is something that companies start to think about as they grow to a larger number of hires ➡️ How Do You Prepare a Departmental Budget? Step 1 → Start by Understanding the Existing Structure of your Data Do you have your P&L set up so that each department has it’s own section? Or do you utilize a CLASS feature, allowing you to drill into an added dimension to see departmental figures? Step 2 → Outline Who will do What Once it’s clear how your data is being tracked, make a list of each of your department heads Ask yourself… 🤔 Who will be accountable for each department? 🤔 What information will be shared with them? 🤔 What is their level of knowledge with Finance & Accounting? Step 3 → Export your Existing GL Information In order to best provide a projection… you’ll want to first provide any information on what is CURRENTLY happening in their department Step 4 → Prepare intake forms Now that your department heads have information on what is CURRENTLY happening… it’s time to provide them with a form in which they can enter in new spend for your forecast. This is typically done via what is called an “intake form”. Step 5→ Forecast your Headcount by Department Now that you have your expenses forecasted by department, it’s time to move on to the last and most important area of your opex… Headcount. Here you’ll want to showcase who is currently in each department, and all of the associated details with each hire, leaving room for department heads to enter in new hires. Once you have all of this information collected, you can combine each intake form into your Financial Model === It’s important to remember that Department heads most likely don’t have a strong Finance & Accounting background, so they may need your assistance in completing this process Once you are finished - don’t stop there! Provide ongoing reporting to ensure that the company continues to stay aligned on it’s plan, and it’s progress against that plan. These are my suggestions from my experience preparing Departmental Budgets - what would you add? Let us know by joining us in the comments below 👇

Before fundraising, we were bootstrapping. This "profit-first" mindset taught us how to track all costs. Controlling cash flow was in our DNA because, without it, our business could fail quickly. We even had different banking accounts for different purposes: taxes, expenses, reserve funds, and profit. When we received revenue, we allocated a % of it to specific accounts. It helped us not to overspend. So, I learned a lot from that period. And I have my 7 favorite hints that I still use: 1️⃣ Think of 2 categories of expenses: non-strategic and strategic. The first one doesn't make any money. Here you have all your operational expenses. The second category is about expenses for product improvement, revenue growth, entering new markets, etc. Keep the first category small and invest more money in the second one. 2️⃣ Monitor the revenue per employee dynamic, not just revenue growth. It helps to analyze the efficiency of growth. 3️⃣ Read P&L in the next order: Revenue ⇒ Profit ⇒ Expenses When you review expenses after seeing profit results, you analyze them differently. You ask yourself if these expenses were truly necessary. 4️⃣ Share the monthly profit and loss (P&L) statement with the team and ensure everyone knows how to read it. When revenue grows, expenses also rise. Begin by encouraging everyone in the company to prioritize profit. 5️⃣ Think twice before incurring new expenses. Increasing expenses is much easier than cutting them. I always keep in mind the strategy of holding off on funding item A until its necessity is clear. 6️⃣ Start with the profit per unit you sell. You can create a simple calculator to try out different ideas about costs and prices before making decisions. Ensure that all team members use it and understand the impact of their decisions on unit profitability. It also helps you focus on more profitable products. 7️⃣ Monitor daily or weekly cash flows and balance. Don’t forget about budgets and budget vs. actual analysis. 🟩 In the end, I want to share one inspiring story from our conversation with Bolt’s CEO Markus Villig on how they won the market with a cost-efficient strategy: “Our philosophy from day one has been that to win in this industry, you need to be a cost leader. So what we did from the very first days of the company was that we would be the most efficient transport operator in the world so that we would keep our costs really low. And we always monitor the costs as a percentage of our GMV. So what it means is that if let’s say your cost to run the business is 5% of GMV, that means that if you change your drivers, let’s say 10%, you will have a very healthy 5% margin. So what we saw many of our competitors do was that they had an extremely high-cost base, so maybe it was 15 or even 20% of GMV. And therefore, they had to take a very high commission from every trip as well. And that made them just under competitive against us” And May The Profit Be With You 💚