Hired gun: Gene Siciliano spent years as an in-house financial officer, gaining clout as he moved to successively smaller firms, before marketing himself to small businesses.

THERE'S a familiar problem among entrepreneurs: Many lack the financial skills to manage cash flow or calculate their debt-to-equity ratio to qualify for a bank loan.

For 17 years, Gene Siciliano has offered an answer. CFO for Rent, the marketed name of his company, Western Management Associates, targets clients with revenues in the $3 million to $50 million range.

"I could fill your ears with all the things these people don't know," Siciliano said. "The problem is they are intimidated by finance and don't want to admit that to the people around them."

CFO for Rent's clients, mostly technology, manufacturing and distribution companies, often run into similar problems, such as not understanding that they can run into trouble when they lack the cash flow to keep up with the rising inventory costs.

Siciliano will shorten the cash flow cycle, so collections come in sooner. One way to do that is to force smaller customers, who often take longer to pay, to pay on delivery (by credit card if need be) and offer larger companies discounts for early payments.

Hiring a plant manager to enhance production efficiency sometimes factors into the equation.

"For many small company CEOs, the most challenging insight for them is understanding the huge difference between net profit and net cash flow," said Siciliano. "They think that because they are profitable, everything must be rosy."

Cutting costs

At any given time, Siciliano has four to 10 clients who agree to pay at least $3,000 for a minimum six-month consulting contract. He said some companies have retained him for as long as five years.

Western Management itself operates out of a small suite near Los Angeles International Airport, where his overhead costs are only $3,500 per month. Its only employees are an office manager and a telemarketer who builds and maintains relationships with trade groups. (Minimizing overhead is another key tenet in the gospel he preaches.)

Speaking fees ($5,000 for a half day, $6,000 for a full day) account for 20 percent of Siciliano's estimated $210,000 in annual revenues. The consulting business generates 75 percent, while educational products, including instructional tapes, comprise the remaining 5 percent.

Siciliano, 63, worked for a decade as a CPA in the Los Angeles office of what is now Grant Thornton. After that, he held a series of financial management positions at El Segundo-based Computer Sciences Corp., before stints as chief financial officer at two smaller companies.

His last job was the mid-1980s as chief operating officer of a Monrovia-based start-up making lens casting equipment for eye doctors It eventually went out of business

"If you look at the pattern of my career, I had taken larger and larger positions of responsibility in smaller and smaller companies," said Siciliano. "If I went to another company, I would be restricted to that company's problems, politics and environment. I wanted more flexibility and more options."

Siciliano also provides audits of companies' financial departments, but farms out much of that work to two colleagues, also former chief financial officers.

"Gene will refer me projects that require long-term, day-to-day involvement with a client," said one of the two, Roni Fischer of Sherman Oaks. "I refer projects that are more suited to his expertise. Turning around an accounting department is one area."

Laying down the law

Siciliano holds a client to two rules: pay him on time and take his advice. "If they listen to my advice and don't take it, I have the option of firing them," he said. "And I have on several occasions."

Among the clients Siciliano has kept is Ely Co., a Torrance-based aerospace parts manufacturer that Harry Senff bought in 1956 when it was a small metals research and development outfit.

When Senff died last year, his sons realized their father and his accountant were the only ones who knew the company's accounting practices and business plan.

After a falling out with the accountant, the sons called in Siciliano, who installed new computer software so the accounting could be handled in-house. He also restructured the company's financial model so it could budget according to Department of Defense programs' high and low cycles.

Another part of the plan was establishing a target goal for shipping volumes so the company would stay profitable.

"We didn't have much planning," said Walter Senff, Ely's president. "We were rolling with the ups and downs. We now are using a nine-month plan to see a trend."

Siciliano's next step is to expand the public speaking portion of his enterprise. He is developing two full-day workshops, one geared toward operational planning and the other a financial planning workshop for boards.

"Building companies isn't about the money, the accounting for the financial reports," Siciliano said. "It's about the people you work with. When people know how to do their jobs, they shine and the company succeeds."

PROFILE

Western Management Associates

Year Founded: 1986

Core Business: Financial management advisory services 

Revenues in 2002: $186,000

Revenues in 2003: $210,000 (projected)

Employees in 2002: 3

Employees in 2003: 3

Goal: Create planning workshops for private-company boards

Driving Force: Small-company executives who lack knowledge of financial management