The early years of a new business can be an exciting challenge. The root of the challenge is that however solid its idea is, and regardless of its potential, a small but rapidly growing business simply doesn’t have the resources or the expertise. The emphasis is, quite rightly, on the coal face of the business – it’s all hands on deck for operations, sales and everything else that generates revenue – but that automatically places these businesses at an immediate disadvantage.
More often than not, small but fast-growing businesses don’t have the resources to employ a chief financial officer – or they feel that their finances are not yet complex enough to warrant the cost. While entirely understandable, this means that they are deprived of a valuable asset that could make a real difference to the business.
My previous article explored how the changing role of the CFO enables them to bring more value to a business, especially in terms of a forward-looking, strategic focus. An experienced CFO assesses the route ahead, looking for opportunities to grow and save costs, and analysing the risks and benefits of strategic decisions such as transformational digital projects.
Fractional CFO and consultancy services like BKL’s help businesses that aspire to grow rapidly. We work with owner-managers, providing the strategic input and support that drives the business forward and turns the ambitions of business owners into actions.
I see fractional CFOs (also called outsourced CFOs) as the business world’s version of a personal trainer. Some of you might go to the gym regularly, but it’s true to say that you would get far fitter, far more quickly if you had the help of a personal trainer. A trainer would take the time to understand what you wanted to achieve and design an exercise regime that would get you there. They would make sure that you kept working at the things that matter and encourage you to keep challenging yourself. Ultimately, you share accountability with them in meeting your goals.
Unleashing business potential
A fractional CFO offers an affordable way for a growing business to access top-quality strategic insights, business advice, and support. Typically, they start by taking the time to understand the objectives of the business owner. They then gather together and analyse all the data that the business collects, assess the most important KPIs for value growth, and then strategise and implement the improvements that could build the business’s value.
When BKL’s fractional CFOs and I work with businesses, we apply a six-element framework:
- Profit enhancement, including revenue maximisation, overhead efficiency and supply chain management
- Business operations, including risk management and employee engagement
- Financing and cash, including capital structure optimisation and asset financing and management
- Strategic innovation, including digital transformation and assessing new markets and products or services
- Corporate growth and strategy, from market mapping to deals
- Exit planning
In future articles, I’ll be explaining in more detail how we help businesses in each of these areas.
Ultimately, BKL and other fractional CFOs bring a level of strategic expertise, data analysis and technology to growing businesses that many could not otherwise justify on financial grounds. We act as a sounding board and trusted adviser to owner-managers, helping them face and solve challenges that they would otherwise have to tackle alone – closely supporting them, as a personal trainer would, to become the best they can be.
For more details about our fractional CFO service, please get in touch with your usual BKL contact or send us a message.
This article was originally published by Business Leader.