CFO Offers Advice on Managing Businesses

“Improvement really means moving a business closer to where you want it to be,” CFO Joe Cioni told members of the last Tuesday night at .

Cioni has over 40 years experience as a chief financial officer and primarily deals with struggling businesses. A skilled assessor in bringing failed businesses back to life, with three significant turnarounds under his belt, the Chamber invited Cioni to speak about ways of improving a business’s efficiency.

In his presentation Cioni noted there are many different types of businesses in Mineola and his advice for improving one type of business does not apply to others.

“If you want to increase your customer base, increasing your customer base for a service business has a different mindset than increasing your base for a merchandising business and increasing your customer base for a manufacturing business is a different mindset,” he said.

Because of the wide variety of businesses in Mineola, Cioni decided to put a different spin on his talk.

“I decided to talk about not how to improve your business, but how some people unimprove their businesses,” he said.

Through a few anecdotes, Cioni stated rules to follow in order to keep a business running, the most important being “cash is king.”

Cioni explained that without cash, one cannot run the business: businesses need cash to function; vendors, employees and loans all need to be paid in order to maintain a business.

Most of the companies Cioni has dealt with experience trouble because they do not know how to manage their cash flow.

“You need to understand how to preserve your cash and how to make sure your cash flows stay even at least with your business,” Cioni said.

Part of preserving the cash flow is watching receivables, bills the client owes for some type of goods or service.

Cioni told business owners it is their responsibility to make sure clients stay within their credit terms.

“I don’t care how big they are, I don’t care how important they are, keep them in terms because the minute you stop watching them you are going to have a bad debt on your hands,” he said.

Another telltale sign of inefficiency in business is maintaining inventory even if it isn’t moving when it could be sold at a loss to generate cash and free up space for new inventory.

Cioni advises owners to keep an eye on their inventory because it will tend to “grow legs” and disappear.

“No matter how good your controls are over inventory look at them again because they’re probably not good enough,” he said,

Cioni estimated that approximately five to 10, “maybe even a higher percent” of employees are either drug users, abuse alcohol or have gambling habits and will look to their employer’s stock to steal and then sell when they need extra cash.

“I am convinced that inventory is easier to steal than cash,” Cioni said.

Lastly, in an effort to save money and increase productivity businesses need to reevaluate themselves.

“Every once in a while take a look at what you’re doing and maybe there’s a better way of doing it and a cheaper way of doing it,” Cioni said.