2021 Candidate – LLS Man & Woman of the Year Sharai Lavoie

2021 Candidate – LLS Man & Woman of the Year Sharai Lavoie

Lavoie’s CEO, Sharai Lavoie, has been selected to participate in the 2021 Man & Women of the Year (10-week challenge) to help raise funds for the Leukemia & Lymphoma Society (LLS) for Blood Cancer Research. The competition kicked off in March 2021, and she needs our help!

Sharai shared, “As you know, everyone wins when cancer loses. There is still much work to do.  When I look across my life and experiences, cancer has touched so many of my family members and friends in varying forms.”

There are many ways to support Sharai and participate in this local Man & Woman of the Year campaign. If you are driven to find cures for blood cancer like Sharai is, we’d love for you to join her Change for Change challenge: changeforchangechallenge.com. Contributions of up to $5,000 will be matched by Epic Notion at a 1:1 ratio to a total of $10,000.

If you want to donate directly to Sharai’s team page, you can click here

All donations are greatly appreciated and tax-deductible. They’ll not only support LLS research, but patient services, advocacy, public and professional education, and community services as well.

At Lavoie, we know it’s important for our team to get involved in the community and look forward to supporting Sharai on this 10-week fundraising journey. Thank you for supporting this great cause.

    What is Man & Woman of the Year?

    The Leukemia & Lymphoma Society’s (LLS) Man & Woman of the Year campaign is a 10-week philanthropic competition for leaders in local communities across the United States.

    Candidates and their teammates raise funds for LLS in honor of local blood cancer survivors, the Boy & Girl of the Year. The title “Man or Woman of the Year” is awarded to the candidate whose team raises the most funds during the competition. The top man & woman candidates in the country are awarded with the national title.

    The 3 Financial Strategies You Want To Remember in 2021

    The 3 Financial Strategies You Want To Remember in 2021

    An organization’s financial strategy is critical to the health and success of the business. A well-crafted financial strategy enables an organization to optimize operations and can present additional opportunities for growth. In contrast, a poor financial plan can hinder an organization’s operations and drive even a profitable company out of business.

    Despite the importance of financial planning, the process of building a robust financial plan does not have to be complicated. By following a few simple strategies, an organization can avoid many of the common pitfalls that result in a flawed financial plan and hamper the growth of the business.

    Three Important Financial Strategies for 2021

    1. Remember That Cash Is Still King

    It is vital to remember that a company’s money (revenue) is not the same as the money that a company has been paid (cash inflow).  While an organization may be profitable on paper, it could be broke in reality based upon the ratio of revenue to expenses.

    Bills can only be paid with the money that a company actually has on-hand, making cash management an essential component of an organization’s financial strategy. 

    This includes setting the terms of contracts to ensure that they are paid promptly and taking advantage of opportunities to minimize expenses, such as the use of automation to reduce payroll expenses.

    2.Keep It Simple

    Overcomplicating its financial strategy is a common mistake that businesses make.  To optimize its operations, an organization may break expenses into many buckets and independently monitor and analyze each.

    While this is intended to increase visibility and optimize expenditures, it can end up costing an organization more money in the long term.  Additional complexity and analysis require additional headcount to complete.  Since payroll is typically one of a company’s largest expenses, up to 70% of the total, the potential gains made due to increased visibility and optimization are likely to be overwhelmed by the corresponding analysis cost.

    A better approach to expense management is to apply the Pareto Principle: 80% of consequences come from 20% of causes.  Identify those few things that make up 80% of your expenses (likely payroll, marketing, and rent) and focus optimization efforts on those for maximum impact.

    Financial analysis can also be simplified and optimized by the use of automation.  By transitioning manual accounting processes to automated ones, an organization can achieve the same level of analysis while minimizing the associated costs.

    3. Bring Management Together & Make It Meaningful

    One of the most common mistakes made by founders and entrepreneurs is maintaining too tight of control over a business’s operations.  By trying to do everything themselves, these leaders end up spending more time working “in” their company (day-to-day tasks, putting out fires, etc.) rather than working on their company (strategic planning, long-term goals, etc.).  As a result, the company can stagnate and fail because it lacks a clear path forward.

    This also applies to an organization’s financial planning.  A crucial part of building a successful business is hiring competent people and handing over control of the tasks they are more fit to manage.

    When developing a financial strategy, an organization’s management likely has a better view of the current state of the parts of the company under its direct control than the CEO.  Asking them about their departments’ current state, their needs, and potential opportunities to decrease expenses without sacrificing revenue can provide invaluable data for crafting an organization’s financial strategy.

     

    Preparing Your Financial Strategy for 2021

    The most effective financial strategies are based upon experience.  Optimizing cash flow requires knowledge of how to manage contracts best.  Simplifying financial analysis requires an understanding of what is and isn’t important.  Reducing expenses via automation requires the ability to select platforms that provide a tangible benefit and return on investment.  Crafting a strong financial strategy requires knowing the right questions to ask subordinates and take the right actions based on their answers. 

    A good starting point for acquiring some of this knowledge is reading Lavoie’s Guide to Strategic Financial Planning. 

    This ebook provides best practices and tips for developing an effective financial strategy.

    However, in many cases, there is no substitute for experience.  Lavoie has over 25 years of financial planning experience and can manage your accounting for you, allowing you to focus on running and building your business.

    The Most Common Financial Mistakes CEOs Make

    The Most Common Financial Mistakes CEOs Make

    Many CEOs don’t have a background in financial planning yet are expected to develop strategies and make decisions that dramatically impact an organization’s financial health. As a result, CEOs make several common mistakes that can dramatically impact their company’s financial health and success.

     Where CEOs Go Wrong

    Getting too comfortable with “how you do things.”

    Past performance is not indicative of future results.  While an organization’s strategies may have worked in the past, situations can evolve, forcing changes to “how you do things.”  CEOs must be ready and willing to adapt, not stuck in a rut.

    Denying that every decision a business makes has some financial implication

    Every decision that a business makes impacts its finances.  Everything that a company does affects its ability to operate in terms of additional or lost revenue, productivity, expenses, etc.  If nothing else, making the decision to do one thing means that the organization likely lacks the resources to do something else.  All business decisions should take into account the associated financial implications.

    Making every decision in a vacuum

    As the CEO, you will be called to the carpet for every choice you make, financial or otherwise, so it is vital that you justify the decisions you make.  Decisions should be made based upon the best data available and incorporate the input of all stakeholders and subject matter experts.  Making decisions in a vacuum increases the probability that a poor decision will be made based upon incorrect data or assumptions.

    Forecasting based on what is in the bank account at that time

    An organization’s current bank balance is a snapshot in time.  It can change rapidly and in unexpected ways.  For example, something as simple as a vendor depositing a check earlier or later than usual can result in a significant discrepancy between what an organization’s current bank balance is and what it “should” be.

    For this reason, an organization’s financial strategies should not be based on projections based on a current bank balance.  A range of different factors could affect this and render any projections based on it erroneous and unusable.

    No visibility into what you are owed and what you have to payout

    Visibility into an organization’s liabilities and receivables is essential for a CEO.  For example, do you have more liabilities than what you are expecting in your receivables? You could have 600k in receivables but 800k in liability.

    If this is the case, then a CEO needs to develop a strategy to decrease expenses and liability relative to receivables.  However, without visibility into the current state of liabilities and receivables, a CEO is unaware of the need to change.

    Ignoring investments that don’t show up on the P&L

    An organization’s profit and loss (P&L) statement summarizes its revenue, costs, and expenses during a specific period.  However, it is not necessarily comprehensive and should not be treated as such.

    Investments that do not show up on an organization’s P&L statement should still be incorporated into its financial strategy.  While they may not impact long-term revenue and expenses, they will show up in cash flow.  Failing to account for them could leave an organization looking financially healthy on paper but broke in reality.

    Not considering seasonality

    Many businesses have seasonal ebbs and flows. Such as an increase in work for construction workers in summer and increased e-commerce sales in the months approaching Christmas.

    For others, the reasons may be less obvious (such as having more sales in summer because customers have more money), but these cyclic changes will still occur and should be incorporated into a CEO’s financial strategy.  For example, building up cash reserves going into a dry season may be necessary to cover expenses while waiting for sales to trend upward again.

    Planning once and refusing to iterate as things change

    A business’s profitability is determined by a number of internal and external factors.  While the COVID-19 pandemic and its economic impacts are a high-visibility example, businesses experience smaller changes much more frequently.

    Adaptability is a critical component of an organization’s financial strategy.  While the company may have certain goals and plans in place, if internal or external factors demand a change, it is essential to adapt rather than insisting on continuing with a course that isn’t working.

     

    Avoiding Common Financial Mistakes

     Understanding how financial planning can go wrong doesn’t tell you how to develop a financial strategy correctly.  To learn more about this, check out Lavoie’s CEO’s Guide to Strategic Financial Planning.

    Strategic Financial Planning In 2 Questions

    Strategic Financial Planning In 2 Questions

    Developing a strategic financial plan can seem daunting; however, it can be boiled down into two questions: what are you doing now and where do you want to be? This article walks you through the process of answering these two questions, providing a foundation for developing a financial strategy for your organization.

    Question 1: What Are You Doing Now?

    Every journey has a starting point and an ending point. Before you can implement a plan to achieve your financial goals, it is important to consider where you are now.

    Current State of the Numbers

    The current state of your organization’s numbers are a good starting point when determining your organization’s capability to meet its financial goals.  Some important questions to ask include:

    • Are you in a position of stability? Financial stability is vital to reaching “stretch” goals.  If the organization is not currently financially stable, it is important to identify this fact and develop a strategy for achieving stability as a first step in the planning process.
    • What is actually coming in/out the door? Knowing the size of the company’s cash reserves is not enough for financial planning.  How much revenue is coming into the organization and how much is going out again as expenses?
    • What is fueling the majority of your expenses? While increasing sales is one way of improving the organization’s financial footing, the ability to do so depends on the market and potential customers.  Identifying and minimizing expenses increases profits as well but is less impacted by external factors.

    Culture

    Achieving financial goals requires the support of the entire organization.  Take a moment to consider your organization’s culture and if the company has the maturity and ability to meet its goals.

    • Do your decisions match your vision and mission? An organization’s goals and procedures are important, but actions are even more so.  Are your decisions, both recent and historical, helping to move the organization towards its goals?
    • Would your employees agree? Employees throughout the organization can have different perspectives, insights, and recommendations.  Ask those “down in the weeds” how well the company is following its vision and mission and how they believe things could do better.

    Question 2: Where Do You Want To Be?

    The effectiveness of a strategic plan can only be effectively measured if there are usable metrics.  Before starting to build a plan to improve the organization’s financial position, it is necessary to define success and failure.

    Targets

    The first step in defining “success” for a financial strategy is defining concrete targets.  From there, the next question to ask is what do you need to achieve your targets?

    • Human Capital.  Does your organization have the human capital necessary to achieve its goals?  This not only includes headcount but access to the specific skill sets required now and in the future.
    • Acquisitions. Does your organization have the capabilities that it requires?  Are there areas of your business where things could be done more effectively or efficiently?
    • IT Investments. The IT landscape is evolving rapidly, and new solutions have the potential to dramatically improve operational efficiency and effectiveness.  Are there any IT investments that the organization should make that would help in reaching its targets?

    Expenses

    A failure to properly monitor and manage expenses is one of the most common ways that businesses fail to achieve their financial goals.  Gaining visibility into past, present, and future expenditures is an essential part of financial planning.

    • How can you gain more visibility into your expenditures? Visibility into expenditures is essential to identifying opportunities for optimizations and cost cutting.  How can you achieve a higher level of visibility into business operations?
    • Do you have an idea of your cash flow on a daily, weekly, and monthly basis? What level of visibility do you currently have into your organization’s cash flows?  Examining cash flows at the daily, weekly, and monthly level can help to identify potential inefficiencies and opportunities.

    Beginning Your Strategic Financial Plan

    Answering the questions that were asked in this article enables you to lay the groundwork for developing your organization’s financial strategy.  To learn about the next steps in your financial planning process, download the CEO’s Guide to Strategic Financial Planning.