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Fighting For Funding

Updated: Aug 18, 2021

Dealing with your CFO can be like jousting — use this advice to hold steady and gain financial backing more easily.

By Kevin Smith, COO, Ferrandino & Son, Inc.

What is capital budgeting? If you answered “the planning process for evaluating, appraising and determining project expenditures,” Webster’s Dictionary would say you are right — but my answer would be different.

I would say capital budgeting is today’s version of a medieval joust, where each participant must strategically craft their approach and, most importantly, understand the other “combatant” better than they know themselves. Of course by combatant, I mean your CFO.

OK, while not a combatant in the literal sense, your CFO is somebody who will be aggressively pitched by every department for funds they “need” to keep their own projects moving forward. So how do you stand out from the crowd?

There are three things you should know about your CFO. First, they care about the bottom line. The second and third things? They care about the bottom line.

Now that I have stated the obvious, here are 10 tips that I gathered from conversations with 10 different Multi-Site FMs. While COVID-19 has certainly changed priorities, how you position your pitch hasn’t changed much.

  1. Calculate the Costs Always have a detailed breakdown of the total cost of the project. This includes being able to estimate costs not yet identified and also understanding the cost impact if the project gets pushed to a subsequent fiscal year.

  2. Think Like a CFO What do you think the objections will be from your CFO? Determine that, and enter the room with the answers before they can ask the questions. Use the tools they use to assess the project. This may mean prepping other members of the finance team before your pitch to see how the CFO will measure the cost of the project.

  3. Calculate the What-ifs Consider any risks if you move forward with the project. What happens if the project falls behind? Will there be a negative impact on sales? Have contingencies in place, and be prepared to discuss them.

  4. Explain the Non-financial Value It is not enough to say your project will make something better. Instead, focus on mitigation around compliance to policies or procedures in the company. Also, don’t dismiss the impact to the brand if you complete the project and, even more importantly, if you don’t. Does it impact the future requirements of life after COVID-19? Be sure to call it out.

  5. Look at the Plan from All Sides Will your project drive up costs for other departments? Will existing service agreements have to be revised after the project is completed? Are there any “surprises” as it relates to costs once the project starts? Have the answers, and discuss them as part of your presentation. They will want to know you have considered every scenario.

  6. Consider the Impact Portfolio-Wide What is the impact if only a portion of the portfolio is benefiting? More importantly, if your project goes well and the rest of the portfolio wants the same benefits, what will that cost? These are total-ownership concepts that should be flushed out before pitching your CFO.

  7. The CFO Will Need to See the Terms Bring the contracts along with you — your CFO will want to see the details. If there are potential concerns in the contract, call them out before they find them. If there are some unique terms in the agreement, explain why they are included and the reasons behind them.

  8. What Inside Resources are Needed to Execute? If your project will require staffing, that cost needs to be factored into your proposal. This includes staffing at the site level, as well. Have you considered assigning this project to an existing resource to reduce costs? Your CFO will definitely ask.

  9. How Will You Measure Success … or Failure? What does a win look like for your project? Does it look different in the short or long term? What if the project fails? What would that look like for your company? Regardless of results, what’s the next step when the project is completed?

  10. What is Your ROI? You have to know the answer to this one, no matter how complex it may be to determine. You should lay out how you will track it and what that would look like. Can’t determine the ROI? It may be a hurdle that, if not resolved, could derail your project before it even gets funded.

Final Thoughts

Conducting 10 phone interviews over a three-week span provided amazing insight into the project funding process. With all of the amazing stories, though, one theme stood out: The idea of anticipating questions or possible hurdles, documenting the answers and then providing the answers before the questions were even asked. I call it the “‘8 Mile’ Approach.”

Not familiar with it? Watch the last 15 minutes of Eminem in the film “8 Mile.” It should be considered a must-watch for every facilities professional.


Watch Kevin Smith on The Daily Grind

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