Case Studies - Part-time CFO

Restaurant Needs Financing for Expansion

A $2 million restaurant and banquet hall experiencing cash flow problems cannot obtain financing for needed expansion.

Challenges:

  • ¬†Incumbent lender unwilling to loan additional funds for expansion.
  • Regulatory reporting and payment of taxes were in arrears.
  • Financial Statements were incomplete and inaccurate.
  • No budget or forecast existed to determine how the addition to restaurant and banquet facilities would impact profitability and cash flow.
  • Outside accountants were not receiving the financial information needed to complete their work.

Solution:

  • A Part-time LauberCFO was engaged to get arms around the situation and provide clarity.
  • Began by updating the accounting system and correcting prior financial statements to reflect accurately the financial results of the company.
  • Prepared cash flow analysis to forecast seasonal cash flow problems and allow the company to make changes to prepare for those times.
  • Prepared a capital budget for the building addition, as well as expenditures for additional furniture and equipment.
  • Developed a five year forecast of income statements and balance sheets of future operations.

What this meant to the company:

  • Utilizing the updated financial information and forecasts, the business was able to obtain favorable financing for the project after the Plan was presented to three banks for review and proposal.
  • The expanded banquet and restaurant operation with its improved appearance and visibility led to Increased revenues and profitability.
  • Control of operating results through monitoring of financial information lead to management changes which further enhanced financial performance.
  • The cash flow projection helped the company avoid cash flow crises and provided the ability to meet vendor and regulatory requirements on a timely basis.
  • The LauberCFO added a high level of financial expertise to the management¬† team which was utilized in many areas.

The value of a Part-time LauberCFO:

  • Trusted adviser to owners.
  • Improved relationship and trust with lenders and vendors.
  • Financial management concepts integrated into operations.
  • Ability of owner to sleep at night knowing that obligations were being met.
  • Advisor to bookkeeper as to accounting questions and improved efficiencies.