Mike Ford’s Advice for Managing a New Business’ Financial Risk

Recently, Forbes asked PBO Advisory Group’s Managing Director & Founding Member Mike Ford for advice to business owners regarding financial management. Mike is a member of the Forbes Finance Council, a group of senior-level finance executives who write and comment on various issues.

Mike’s advice is:

“Make sure you have plenty of capital. Develop a financial pro forma that includes revenue and cost of goods/services assumptions. Ensure profit margins are within industry standards. Earnings before interest, taxes, depreciation, and amortization [EBITDA] should be 15% to 20% of revenue. Include a contingency for unexpected expenses. Complete a cash flow projection and obtain appropriate financing. Do not bootstrap a business — well-capitalized businesses are more likely to succeed and weather unexpected obstacles.”

See Mike’s comments on the Forbes website and get more tips from his colleagues on the Finance Council here.

Share This Post

probackadmin