, ,

How to Hit the Financial Reset Button on Your Cannabis Company – and Thrive

How is the business really doing, and how can we take it to the next level? This becomes a burning question once cannabis startups get a couple of years under their belt and confirmation that their business has real promise (i.e., they’re profitable or they’ve built a strong customer following). Moving forward was top of mind two years ago for the leaders of Humble Root, a leading cannabis delivery service based in Sacramento, California. They knew their growing company had potential to go far, but exactly how wasn’t clear. They were operating under tight margins and a foggy view of their finances.

These are the steps the company took, with Kukuza Associates’ CFO expertise, to gain a better grasp of its business—based on timelier, more reliable financial information—so that we could together create a roadmap for growth.

get link hard to ejaculate on viagra alexis andrews accidentally gave me viagra https://lawdegree.com/questions/preventing-drunk-driving-essay/46/ go site testing cialis sports example essay cs402 midterm solved papers by moaaz all english news paper in pakistan follow teenage curfew argumentative essay qual mais forte cialis ou viagra how long till viagra good rx generic cialis does viagra work on women click https://albionfoundation.org/perpill/cialis-reklam-sahan/63/ source url https://vgdev.gtorg.gatech.edu/buyonline/lamictal-cholesterol/1/ https://laralafayette.org/classes/creative-writing-uh-manoa/91/ https://mswwdb.org/report/computers-pros-and-cons-essay/96/ herbal replacement viagra essay my school garden follow https://shilohchristian.org/buy/aids-research-paper-essays-about-education/54/ how to solve story problems http://kell.indstate.edu/chapter/summary-of-the-essay-deep-ecology-by-fritjof-capra/51/ a passage to india essay topics where to buy orlistat viagra without a prescription order what do you put in a cover letter death penalty in india essay Assess the situation—quickly. Humble Root saved a considerable amount of time in its financial turnaround effort by undergoing a rapid assessment of its financial and operational health. The pros at Kukuza walked them through a series of questions so that we could understand their financial situation and the leadership could think through where they wanted to take the company. Rather than making guesses or taking anything at face value, we used this assessment’s tangible findings to fix issues, put the company on more solid financial footing, and set up a plan to reach its goals.

Be open to what you don’t know. This is a mutual step for companies and the financial consultants they work with. Humble Root was open and receptive to our assessment, and wanted to gain a new perspective for improving their financial operations. Similarly, we didn’t make assumptions going in——we asked questions until we truly understood the business. As their CFO consultant, I listened carefully when I met with the key managers. I wanted to understand the company’s core competencies and how it stood out from the competition. While I was eager to help them at a strategic level, we also had to first get the accounting on solid ground, with ongoing, followable processes.

Solidify the financial foundation. Building off the insights learned from the rapid assessment, we took a deep dive into the company’s bookkeeping and accounting, including resetting its QuickBooks and getting accounts payable on track.

From there, we designated reporting data from a cannabis POS as the system of record for revenue, inventory and cost of goods sold. Setting up a timely, practical financial reporting discipline was a must. We set up the company with accounting process guidelines for eight critical accounting cycles and a monthly accounting close process. This included the development of a monthly reporting template and presentation format so that management will frequently be in the loop. Now, every month, they are triggered to have a fruitful discussion about the company’s financial results, with comparisons between actual results vs. budgeted, and a review of the previous year’s financial and operating metrics.

We also oversaw a wall-to-wall physical inventory of the warehouse, and listed and confirmed their fixed assets. The company’s financial picture was no longer foggy.

Create a clearer path for growth. With reliable, and more accurate, information along with documented procedures, the company has a firmer grasp of what’s happening and what’s possible. A strategic roadmap, with a prioritized agenda, leads the way while allowing for flexibility for when things change.

What’s Next?

It took about six months for Humble Root and Kukuza to reset the company’s accounting, and start the process of making changes that would affect the business. Early on, our efforts enabled the company to make better, faster decisions in its fast-moving, competitive environment, including a modest pricing increase that led to a significant rise in gross margins. With a broad, high-quality menu of products, the company has managed to weather the pandemic’s uncertainty and meet the heightened demand for delivery services, and it’s grown rapidly in sales and popularity.

In terms of the finance and accounting function, the company is set up to do more on its own—I’m currently facilitating the strategic review and budget framework for 2022 and evaluating to ensure that the learnings the company has gained have been applied. The CEO and management team have more confidence in the process, and the full-time, on-staff controller has what’s needed to keep the financial operations’ wheels rolling—to continue providing management with the level of financial information and insights for making the right strategic decisions.

Is it time to unlock your company’s potential? Find out more about our CFO advisory services and the Kukuza Rapid Assessment by contacting Kukuza Associates today.

As a consulting CFO for Kukuza Associates, Gary Potts knows the CFO role inside and out. He’s helped dispensaries, growers, and many other small and midsize companies’ power through their growth challenges and move forward. He previously worked at Service Champions, Maxoptix, and PwC.