Measure the customer number before a lender or a buyer does
Customer concentration is the first thing outsiders compute about a manufacturer and often the last thing owners track. A lender reads it straight off the receivables aging before pricing your operating line; an acquirer prices it into any offer; and inside the plant it decides quietly who really sets your prices, your payment terms and your capex priorities. If one relationship funds the building, every renewal conversation is asymmetric.
The CFO treatment is to make it a managed number. We report the top-one and top-three revenue shares monthly, agree a ceiling you are willing to live with, and treat the moves that bring it down as budget lines rather than intentions — a funded sales pipeline, capacity deliberately held back for new accounts, and contract structure on the anchor account itself, because a blanket order with scheduled releases is a different risk than a relationship renewed one PO at a time. Concentration shows up in terms too: an anchor account that stretches its payments is quietly financing itself out of your operating line, and that cost belongs in the account's real margin.
Pass-through is a pricing system, not an apology letter
When hydro, resin or steel moves, the plants that keep their margin are the ones whose paperwork moved first. That means quote validity windows matched to how long your suppliers will hold prices; material clauses in longer agreements indexed to a published price, so repricing is automatic and arguable from a document instead of a phone call; and a standing review of which products have quietly become loss-makers since their price was last touched.
Energy has an Ontario-specific lever. Plants with average peak demand above 500 kilowatts can opt into Class A under the Industrial Conservation Initiative, where the global adjustment — a major component of an industrial electricity bill — is billed on the plant's draw during the grid's five annual peak hours. Once you are in, curtailing or rescheduling energy-hungry processes on likely peak days becomes a finance decision with a calculable payoff, and it belongs in the monthly numbers next to the shift plan it disrupts.
The second shift or the second machine
Sooner or later demand outruns the day shift, and the two answers deserve the same arithmetic: contribution per machine-hour after premiums and financing, not revenue. Skilled labour is the constraint that usually decides it — in the GTA the machine is often easier to find than the people to run it at night.
| Question | Add a shift | Add a machine |
|---|---|---|
| Cash it takes | Premiums, supervision and more working capital | A down payment plus years of financing |
| How fast it arrives | Weeks, once you can crew it | Lead time, rigging, commissioning |
| What it strains | Supervision, the maintenance window, the labour market | Floor space and the balance sheet |
| When it wins | Demand that might not last | Demand under contract, or a bottleneck process |
| Backing out | Hard on people, easy on paper | Hard on both |
We build the model with your real loaded labour rates — the ones the books already carry, as our manufacturer accounting page describes — so the premium, the utilization assumption and the financing cost are yours, not industry folklore.
Working capital, and the cadence that makes any of this stick
A plant's cash lives in raw stock, WIP and receivables on whatever terms the anchor customer dictates, which is why profitable manufacturers still hit cash walls in growth years. We run a rolling 13-week cash forecast beside the monthly statements and size the operating line against inventory and receivables the way a credit desk actually margins them — work that draws directly on Walla Assaf's banking years, with Business Financing Advisory preparing the package when the line or the next machine needs a lender. Inventory gets the same treatment as cash, because that is what it is: the pack tracks turns by product line and flags stock to move while it can still be sold, before it ages into a writedown.
The rhythm of Fractional CFO work is deliberately plain: a monthly pack with utilization, scrap, on-time delivery, contribution by product line, the concentration shares and the cash runway, then a working session where one or two of these decisions actually get made. No dashboards for their own sake. Scope and fee arrive as a written quote after a free 15-minute discovery call, for manufacturers across Mississauga and the GTA.
