Since the 1990s, Kathy Gregory has guided businesses to take charge of their financial health and long-term strategy. As the Head of Forecasting for Lookahead Advisory, her forecasting and CFO experience have taught her that spreadsheets don’t drive successful operations.
When getting to know clients, “we try not to talk about numbers. Instead, we talk with business owners about their businesses in their own words,” explains Kathy. “They tell us their story, and we learn how the business works.”
When Kathy and her team grow that deep comprehension, they put together not only where the business is. They can see its path to further success.
Every business owner and entrepreneur who works with Lookahead Advisory came because they couldn’t resolve a pain point in their business. It might be cash flow, expansion, personnel, or matching their goods and services to their market. No matter the cause, it’s holding back the business’s potential.
“They are trying to make decisions that they don’t feel confident about, leading with gut instinct instead of being data-driven,” says Kathy. “The decisions usually involve spending or risk in some way, and they don’t have enough good information to make solid decisions.”
“Your business model is unique to you. We connect with owners on the reason they came to us, and we solve those pain points right away,” says Kathy. “Then we take them on a journey.”
However, business advising isn’t just about solving an immediate problem. Short-term fixes don’t necessarily resolve bigger issues, such as resource bottlenecks, long-term profitability, rightsizing headcount, or deciding where and how to grow an enterprise.
That model comes to life via a bigger-vision business model of viability, strategy, and fulfillment. As Kathy understands your business, she’s considering not only key performance indicators (KPIs), but your larger goals. She might be examining invoicing terms or vendor pricing, but Kathy’s also asking questions about where you want to be in five years or why you wanted to pursue this business in the first place.
“These regular ole KPIs have been around forever,” says Kathy. “They’re good for you to know, and we’ll build them out, along with other KPIs that are distinct for their business.”
Different owners want and need to know different things. Part of Kathy’s role isn’t just organizing and presenting data or forecasts. It’s figuring out each owner’s strengths, limitations, challenges, and goals, and customizing the model to present it in the way that works for that owner.
It’s also a process that can take time.
Part of why Kathy describes her work as a story? She understands that owners sometimes need time to be ready to process and act on the information and perspective she’ll provide.
“A spreadsheet can show the simple things that the owner needs. We can even color-code it,” explains Kathy. “But it might take two years to get that client to where they could see the list.”
A common pain point that brings clients to Kathy and Lookahead? They’re struggling to realize better profits—and stop having cash crunches.
“Often when clients come to us, they’ve only been focused on cash. Profit and cash both matter, but they’re different,” says Kathy. “What in their business is driving profit? How do you turn that profit into cash?”
It can be hard to tease apart the difference. The first thing Kathy and her team dig into?
“Gross profit margin simply is the difference between what you sell something for and what it costs,” explains Kathy. “Margin is that number as a percentage.”
Your goods or services need to be profitable on their own, first and foremost, from a gross margin standpoint.
“It has to generate enough profit to run the business and cover overhead, such as rent or paying yourself and your staff.”
Making decisions based on that difference is crucial not only to long-term growth, but to maintaining stronger reserves of cash on hand. A business working with Kathy comes to understand not only what parts of their business are driving profit, but how those profits can more effectively be turned into cash.
“We look at industry benchmarks for where gross profit should be, generally 50% or above,” says Kathy. “The other 50% should be able to cover operating expenses to make sure that the business is generating a profit.”
The tricky thing, however, is that profit margin is not the same thing as money in the bank.
“Profits are not tangible. They have the potential to become cash, but only when you collect them,” says Kathy.
When profits become cash, they become the financial assets that make it possible to cover bills, pay wages, and build a stronger case for additional financing.
“You sell a thing, collect money, pay out bills, and the net remainder of that is your net profit,” says Kathy. “That’s also the cash you have in your bank.”
At least, it is once you’re paid. Turning profits into cash requires timely and regular diligence, not only to collect fees, but to contain costs.
“If you’re paying big banking fees, not collecting from clients, or not paying right with vendors, then cash gets awry,” explains Kathy. “If cash isn’t coming, such as with extended vendor terms, then that owner winds up in a cash problem.”
Every business owner can benefit from understanding the metrics that illustrate a business’s performance. That understanding doesn’t replace or supplant the owner’s experience or intuition. It can augment them and fill in gaps that might keep them from identifying and resolving problems in their business.
“Even if a business has a small staff, they still have departments,” explains Kathy. “They have marketing, operations, finance. Each has metrics that matter. Each piece of that puzzle has to work together. We can show you the performance of each of those pieces.”
Kathy encourages clients to put financial decisions in context with their total profit, future cash, and other relevant metrics, such as
• Seasonality
• Cost of goods
• Gross margin
• Net profit
• AR and AP days
• Breakeven point
• Cash flow and cash burn
As Kathy shines light on these and other metrics, the owner can implement fresh decisions that bring about both short-term improvements and long-term growth.
“They understand their numbers and what they need to be paying attention to,” says Kathy. “Profits usually increase by about 1-3% by the end of the first year of working with us.”
One pain point can open up a broader perspective throughout the entire operation, as Kathy found when working with one client.
“When she came to me, she didn’t understand her marketing metrics or what marketing metrics to know,” recalls Kathy. “I came up with a way to show her the whole thing. We now show her all the metrics.”
Marketing and advertising have quantifiable and trackable financial metrics, but the key indicators aren’t just about intake, traffic, or sales numbers. Whether finance, marketing, or other departments, each area of the business has its own metrics.
It also took time, discussion, and deep collaboration for that client to work her expanded knowledge and data into her operation and strategy.
“Small business owners are tradespeople,” says Kathy. “They know their trade, but they don’t always know how to manage a business. We teach owners to run their business with a combined knowledge of numbers, instinct, and experience.”
Just as Kathy builds not just metrics but story into her business modeling, forecasting, and performance reviews with each client, she structures her communication style to the client’s preferences on every interaction based on what her client needs and how they best take in information.
“Clients want someone to interpret the numbers, not just inform them.”
Kathy has clients who want the numbers right in front of them. Other clients bring in the entire team, so their full staff can assess the company’s performance review.
“We’re in such a rhythm on their performance review, we do it weekly,” says Kathy. “We actually do go through P&L. When they see this, they understand. When a sale or other number changes, they see how it flows to their cash and bottom line.”
However, the review and main information always come back less to metrics and more to the underlying impressions, emotional motivations, and intuitive assessments.
“When we look at their pipeline, I ask how things are going with this prospect and that prospect,” says Kathy. They’ll run scenarios in the forecasting tool.
“They love watching how one change can flow all the way down.”
That works for some clients. Other clients make it clear they do not want anything like this.
“Other clients just want to know spending limits, or how many services they need to provide to hit their profit number,” explains Kathy. “We know where we’re taking them based on the goals they articulated.”
Drawing from a background spanning project management, financial forecasting and analysis, plus strategic planning, Kathy focuses on ”uncomplicating finances” so she can provide the information and advice that owners need so they can make decisions with confidence.
When a new client comes on board with Lookahead, Kathy and her team spend the first 1-3 months on onboarding and upfront planning. Kathy’s also building out her understanding of how that owner thinks, what they focus on, and how best to fill gaps in their knowledge or goal-setting.
“How we connect with the owner is what matters. We’re trying to not only help the owners achieve their goals,” says Kathy. “Some want to grow and exit. Some want a long-term cash cow. Some want to be acquired but stay on, build a second location, or acquire generational wealth. You have to find the thing that resonates with them.”
Drawing from a background spanning project management, financial forecasting and analysis, plus strategic planning, Kathy focuses on ”uncomplicating finances” so she can provide the information and advice that owners need so they can make decisions with confidence.
Each business is different, and its goods and services vary in how each contributes to revenue, expenses, and net profit. Combined with data from the business’s financial or operational systems, Kathy can build out a business model that adapts as the enterprise grows and changes.
“It’s an evolving process to learn more about their business model. It takes an initial couple of months to understand,” says Kathy. “Even in the second and third year, we learn more that contributes to the understanding of their business model. We change up their revenue planning to dig into their sales pipeline and really understand the things that affect it, so they can predict sales.”
As Kathy examines product pricing, the number of clients served, or other factors, she can distinguish between the business’s overall constants and the variables. The variables, such as seasonality, are where Kathy can run forecasts and modeling.
“We circle back every month for a performance review with our clients. It incorporates actual results with looking ahead,” says Kathy.
Yet those reviews are rarely about just numbers and spreadsheets.
“Even when I give them the data and the performance reports, I rarely show them numbers on a screen,” she explains. “There are charts, sure, but mostly I talk to them in narrative.”
Most clients think of their business less in numbers or profit and loss statements, or P&L
“I’ve worked with itty-bitty companies and Fortune 500 public companies. The only business people who think in terms of P&Ls are people reporting to Wall Street, like public entities,” says Kathy. “Nobody else thinks that way. People who are running businesses think in terms of narrative. What’s going on in my business today or this month? That’s a story. It’s not numbers.”
Employees and management focus on how their clients are feeling or how people are spending, or the challenges staff are facing.
“The last thing I ever want to do is ask my small business owner clients to tell me their numbers,” says Kathy. “I’ve already figured out what contributes to their numbers.”
For the first quarter of working with a client, Kathy focuses on building out numbers, following the sales pipeline, and modeling the clients that the business is trying to attract. Every insight and piece of data feeds back not just into metrics, but the broader understanding that becomes a business model journey to success.
“I figure out the things that build those numbers, but I’m not asking about the sales numbers. I’m asking about the sales trip,” explains Kathy. “I can get the numbers and figure that out. Business owners want to tell you those stories. That’s how they’re thinking already.”
For every Lookahead client, Kathy and her team come back to a focus not only on optimizing cash management and building higher profits, but on leaders who can make more confident, more informed decisions.
All that comes from the deep work it takes not only to understand the business as it is, but to go on a journey with that client to where the business could go.
“What do they need to know that they can put into action on their end?” says Kathy. “We then figure out the path to get them to the goal. You meet people where they are.”
Then she guides them on where they could go.
