You could probably invoke all sorts of business-school metrics to answer this one, although a better measure might be your chronic insomnia. Plenty of entrepreneurs battle anxiety, says Ken Kaufman, founder and CEO of Utah-based CFOwise, which provides part-time CFOs to small and midsize businesses. It’s a common symptom among business owners who don’t have a solid grasp of their firm’s financial picture. “Anxiety turns into fear, which causes lots of bad decisions to be made,” Kaufman says. If you’re not sleeping well, he believes getting professional help might be just what you need to help bring order to your firm’s finances–and to help you get some shut-eye. Beyond sleep patterns, I have developed some metrics of my own.

  • Lack of Financial Compass:  We are so busy dreaming that we don’t actually formulate a vision for the long-term and goals for the short-term.  I once had a boss that would say “the devil is in the details”.  You’ve got to have a detailed financial plan, especially for how you will manage your cash, in order to drive the behavior that will allow your vision to come to fruition.
  • Complexity: If your business produces a single product from a single site for just a handful of nearby clients, your financial picture should be fairly simple to navigate. But if you’re making scores of products for hundreds of clients, you’re obviously looking at a more complex operation–one more likely to require the services of a finance professional.
  • Rate of change: Whether you find your business rapidly spiraling downward or growing at breakneck speed, a CMA might be needed to help you respond to a quickly changing financial landscape.

An in-house CMA can also bring intangible benefits. The entrepreneur can delegate the financial management to an outside professional who knows how to identify problems before they strike.  This can help owner/operator to feel empowered because they weren’t managing this well. And thus ensure, finally, a good night’s sleep.

Flickr image by Alyssa L. Miller. CC BY 2.0 license.