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Hiring Best Practices: What to Look for When Hiring a Part-Time CFO

 

Are you looking to hire a CFO that will oversee the financial side of your business?

As you start to consider what to look for in a CFO and who would be the best fit for your business, your first instinct might be to interview full-time candidates only. However, you’ll be missing out on the many benefits that qualified, part-time CFOs bring to the table.

 

The Benefits of Hiring a Part-Time CFO

 

Immediacy for Urgency

When the needs of a business are urgent, it is usually easier and quicker to hire a part-time employee to help out, instead of instigating a full-time position. Given the nature of their role, part-time CFOs can act quickly on fulfilling specific needs, whether it is identifying business pain points or ways to make the business more profitable. Although you may only request your part-time CFO to work once a week, they will be ready to help whenever you need them, and they are always just a call or email away.

 

Financial Leadership

Other than solving immediate challenges, a part-time CFO can also act as a strategic business partner and help grow your business in a sustainable way. For example, they can prepare financial forecasts, develop annual plans for revenues and expenses, and assess the competitive landscape and long-term cash flows. As a result, this would help free up any business owner’s time, so they can focus on other aspects of the business.

 

Affordability

Aside from solving a company’s short and long term goals, one of the biggest benefits of hiring a part-time CFO is that you can have access to an experienced CFO at a fraction of the cost of a full-time CFO. A full-time CFO delivers all the benefits of a part-time CFO but at an increased cost and financial commitment, and most SMEs do not require that skillset or experience every day of the week. Instead of investing in extra recruitment and hiring costs to find a full-time candidate, your business can reap the benefits of a part-time CFO who has practical, financial, and strategic skills to offer.

 

Flexible & Customizable Work

Flexibility is becoming more acceptable in today’s business landscape, allowing for part-time CFOs to fit right in with their varying schedules. Once you hire a part-time CFO, they will take on a variety of different tasks, based on what and when you need them for. Depending on the part-time CFO’s experience, they can also cater to different business markets and fulfill various needs. Overall, this results in an efficient solution for both parties, where clear roles and responsibilities are established and no time is wasted.

 

Open & Honest Dialogue

An advantageous quality that most part-time CFOs (and part-time employees in general) have is their ability to be candid with their employers. You can expect a qualified, part-time CFO to challenge you in ways that a full-time employee might feel uncomfortable doing. An employee’s honesty and transparency tend to lead to meaningful discussions that push businesses towards their goals and bring clarity in times of confusion. Since part-time CFOs are independent workers, you can also confide in them about any departmental issues you may be facing.

 

Expertise in Local and International Markets

Depending on your business needs, you may require a part time-CFO who is familiar with the local and international markets – companies such as the CFO Center provide access to a network of local, national and international teams to support a diverse variety of needs that an individual CFO cannot offer. There are also over 60 experienced part-time CFO’s to choose from who have expertise in various sectors.

 

Finding A Suitable Candidate

 

There are many qualities to look for in a CFO, however, we have outlined some of the most important below:

 

Big Picture Thinking

A CFO who can see beyond the numbers would be a valuable asset to your company. This individual would be able to interpret data in a meaningful way and provide analysis that encourages positive growth for the company.

 

Communicative Team Player

Considering that a part-time CFO will not operate within a consistent schedule, they should be able to communicate often with others and provide extensive detail whenever necessary. It is also important that they are a team player who gets along with other employees, otherwise, they will not be able to work efficiently and successfully with your team.

 

Multi-Faceted Experience

To make the most of your part-time CFO’s skill set, you should consider how much experience they have with different companies and within various industries. Individuals with an impressive range of previous experience can provide valuable perspectives on different problems, strategies, and goals that other employees may fail to see.

 

Life-Long Learner

Ideally, your part-time CFO should be excited about building upon their skills and developing their career, to ensure that they stay up-to-date in their respective fields. Without this attitude, your business will not be able to grow and progress from a financial standpoint.

 

Interested in hiring a part-time CFO of your own? Browse our selection of America’s most qualified, part-time CFOs.

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Sale Leaseback (SLB) – How businesses can benefit financially without losing control 2

Sale Leaseback (SLB) – How businesses can benefit financially without losing control

 

Sale Leaseback, as a concept is not new – the use of SLB as a strategic financial tool has been available for businesses for many years.

It has consistently grown in numbers over the last decade and gained further prominence in the current economic environment due to the convergence of a) businesses in need of operating capital in a challenging credit market and b) investors in search of higher yield against the historically low returns from Treasuries. Data shows that the SLB transactions in the U.S. went up more than 4-fold, from around 200 in 2010/11 to around 900 in 2019/20, while the 10Y Treasury during the same period dropped from around 2.5% to below 1%.

 

What is a Sale Leaseback (SLB)

The basic structure of a sale-leaseback transaction is evident from its name. The sale-leaseback allows a business to improve its cash position by selling owned real estate while retaining the right to use the property through a long-term lease.  The sale provides the business (now tenant) with swift liquidity which could be used to reduce debt, reinvest in its core business, acquire other businesses or just maintain adequate liquidity. Potential investors, meanwhile, are looking for quality, income- producing real estate with tenants who are willing to sign a long-term lease. A win-win for both sides!

Typical sale-leaseback leases have initial terms of 10 to 20 years with several options to extend the lease; most leases have multiple extension options in favor of the tenant (Note: State title transfer regulations will need to be considered while determining the total extension period)

While sale-leaseback properties occupied by credit tenants command the best prices on a per-square-foot/lowest capitalization basis, real property occupied by tenants with lesser or even troubled credit is also in demand in today’s economic environment.

Compared to a traditional mortgage, where the owner can expect a certain portion of property value (typically 50% to 70%) financed by way of debt, a SLB releases 100% of the property value, which at times could include a substantial capital gain as well.

Sale Leaseback transactions come in all sizes and shapes including large corporate HQ office campuses, labs, distribution centers, light industrial manufacturing facilities, big-box stores, convenient retail/ drug stores, Quick Service Restaurants (QSRs), as well as many mom-pop facilities. SLB is poised to play a larger role in M&A as well – companies like J.C Penney, Bed Bath & Beyond and Big Lots Inc. took this approach last year.

 

The key advantages of SLB to the seller/ business can be summarized as below:

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Weigh the Rewards and Risks

While SLB has proven to be beneficial to many owner occupiers and businesses for the above reasons, one needs to evaluate the downside of such arrangements, including:

  • Long term commitment – The investors in SLB expect long term lease commitment from the business. The business needs to forecast operating cash flows sufficiently into the future to determine if the future lease liabilities could be met.
  • Cost benefit analysis – The valuation of the property in an SLB is determined by the rental payments. While at times, the buyer may be willing to pay a higher price for the property in return for above market rental payment, proper financial analysis in the form of Net Present Value (NPV) calculation would help determine the net benefit to the business.
  • Control – While long term lease structure and extension options could provide business continuity, there are some limitation on occupancy, control, and flexibility if certain conditions of the SLB are not met. Structuring the agreement by competent professionals should help mitigate such a situation.
  • Accounting and Tax considerations – While SLB may come with many financial and strategic benefits, due consideration should be given for accounting (deducing of rental payment) and tax implication (timing of gain and loss recognition, non-recognition of SLB by IRS in certain cases, loss may not be recognized etc.) to ensure that the transaction benefits are optimized.

 

At CFO Center, our experienced team of professionals are here to guide across all the aspects of Sale Leaseback, with particular focus on Risk Vs. Reward, so that the businesses could reap the maximum benefit of this financial tool in this challenging economic environment. Kindly reach out to us on: (800) 919 – 4022

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Thriving in the New World Guardian

Thriving in the New World Guardian

Thriving in the New World requires a CFO to expand their Guardian role for the organization.  The CFO must see themselves driving the organization’s efforts to harness increasing levels of complexity while embedding behaviours and systems to defend against existing and emerging threats to business continuity.

Organizations of all sizes have relied on their financial leaders to develop internal control systems and financial compliance with taxation and regulatory bodies.  The business owner and key stakeholders will better navigate the future by ensuring their financial leader is accountable for maximising the organization’s overall information integrity and for broadening the compliance framework.

Successfully achieving this broader mandate will require the CFO to elevate their collaboration and partnership with other functional leaders.  Success will also depend on how intensely the leadership team commits to sharpening their ability to convert information into insight.  There are two initiatives your CFO can pursue to create greater visibility of information related opportunities and potential compliance challenges.

Harnessing Digital Transformation

The recent pandemic has accelerated the digital transformation for every business.  Over the past year, it has become clear that companies who want to win must consistently adopt emerging technologies to exploit the opportunities offered by digitization. Businesses who select the right solutions will convert the promise of richer information into higher revenue and lower costs.

It is likely your business is headed towards larger technology investment. Business leaders must, of course, rely on their technology advisors and their market oriented leadership to drive digital transformation; however, the contribution of the CFO should not be overlooked.   Owners and CEOs should seek to pair their technology advisor with their financial advisor to ensure the technology selection process is sufficiently thorough and holistic.

Decision makers often desire greater amounts of information; however, there is no guarantee it leads to better decisions.  For most organizations, their finance teams have the most experience in digesting large amounts of information and structuring it to make recommendations.   Fostering collaboration between finance staff and your digital marketing leaders will promote more streamlined, more accurate, more actionable information.

Creating a Compliance Culture

The reality is that discussions regarding “compliance”  are low on the excitement list for most individuals, and almost certainly not the driving force for most CEO’s or owner operators.   For finance and operations teams, compliance may not be their primary passion; however, their functional success links directly to processes that ensure compliance requirements are visible and achieved.    The challenge for compliance in a post pandemic world has grown. Workers remotely accessing business systems and confidential data puts greater pressure on protecting customer information and maintaining adherence to internal practices.

It is no surprise that the first step to creating a compliance culture begins with the leadership team. For many business the choice to task the CFO to take on compliance culture responsibilities will reinforce to employees the organization’s commitment to a disciplined overall compliance framework.  Your CFO should bring a compliance mindset to the organization. Equally importantly, they should bring proven methods to establish compliance systems.

Once the initial building blocks of leadership commitment and senior level accountability are established, the CFO can work with their colleagues to put in place three additional elements that have proven effective in financial compliance.  These elements are Visibility, Review and Corrective Action.   These three elements have been essential for every finance leader to demonstrate a reliable compliance framework to tax authorities, regulatory bodies, and financial stakeholders.

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Thriving in the New World Operator 1

Thriving in the New World Operator

In this series of Thriving in the New World, The CFO Center explores what exactly it means to be an operator in the “new world” and essential elements that allow your business to thrive.

Most owner-operated businesses would agree that increased cash and more access to capital would help them exceed their business objectives.   Recent societal and economic realities have strained or even exhausted cash resources for many companies.   Even those companies enjoying unprecedented growth are scrambling to fund unexpected expansion.   The essential building block for liquidity has always been Operational Excellence, defined as consistent and reliable execution of each business’ unique processes to acquire and satisfy customers.

High performing operations processes have always been the foundation for generating cash from within the business.  Equally important for those business owners seeking to thrive in a post Covid world is the critical need to demonstrate operational excellence to third party financing sources.  Seeking to expand your credit line with your bank or pursuing additional investors will require the business owner to present a clear and compelling story for how the company will produce profits, cash and sufficient return on capital.

The traditional role for a CFO in Operational Excellence is to provide accurate financial information and act as leading voice in cost reduction.   Creating a truly reliable foundation for generating cash and profits; often requires financial leaders to contribute more than they have ever before.  The experience, attributes and mindset of many CFO’s positions them to act as a catalyst for delivering cash and profit maximization across the full range of business processes.

Fix the Finance Foundation

The processes and practices of the finance function must be viewed as rock solid by the owner and the rest of the organization to create a path for participation or preferably leadership of broader operational improvement initiatives.

There are three key functional outcomes that must be in place to give the finance team the credibility to extend its involvement to other operational processes.  Without these deliverables in place, the organization’s ability to undertake deeper process review will be severely impaired.

The first base level capability is timely, accurate and useful financial reporting.  If the leaders of the company are not receiving this level of financial reporting, then it is unlikely that the finance leader has earned the right to apply their team’s expertise to general operating processes.

The second must have competency from the finance team is an understanding of the cost drivers for the business. The understanding of costs does not have to be perfect; however, there must be a methodology in place to capture and analyze the complete range of items that form the cost of  products or services

The third requirement for finance team effectiveness is to have a solid grasp of the company strategies that will drive future growth and success.   If your finance staff are seen just as number crunchers it will be difficult for them to contribute to operational initiatives.   The first installment of our CFO contribution series suggests a practical approach to engage your finance leader in developing future proofing strategies.

Own Cash Flow

The responsibility of generating positive cash flow clearly belongs to the CEO and the entire organization; however, expanding the mindset of your financial leader to thinking and acting as the owner of cash flow can be a powerful tool.   Finance and accounting staff have historically only been tasked with producing cash flow forecasts based on inputs from other leaders.

We suggest making a clear organization signal showing reliance on the finance team to go beyond analyzing cash inputs and outputs. The new expectation should include concrete actions aimed at increasing the amount or timing of cash inputs while reducing the amount or timing of cash outputs.  One example of a high impact cash inflow recommendation is to convert the finance team’s experience with both external and internal obstacles to timely collection of receivables into operational practices that eliminate these obstacles in advance.

Refine and Revolutionize Business Processes

Each organization varies in complexity of business processes, capabilities of process analysis, and often very different levels of CEO interest or prioritization of process improvement initiatives.  Given the nature of many small to medium-sized organizations, there can often be aptitude and attitude gaps leading to under prioritizing  detailed data-driven process review work.

Even a small finance team can become the internal champions for generating improved results achieved through documenting and enhancing your most critical processes.   Elevating the CFO to, at minimum, a shared level of ownership with the firm’s operational leaders will apply complementary expertise to process review efforts.  Converting process improvements into additional cash and profit can often involve just a few additional questions that may be missed by other functional areas.

Create Compelling Capital Acquisition Content

There is a high probability that pursuing operational excellence will lead to capturing more cash from optimized processes and deliver positive returns in the short term.

The longer-term benefit of intense CFO involvement in the operational aspects of the company is the ability to work with the owner to put a more convincing investment case forward to potential sources of debt or equity financing.   Revenue growth is understandably the primary focal point for future investment; however,  the business case is significantly strengthened by a tangible action plan showcasing gross margin enhancement, profit improvement and positive cash generation.

Reviewing, examining and revising processes has always been part of running a successful enterprise.  Although most companies have made improvements over the life of their business; there is often a substantial opportunity to further optimize the organization’s capability to convert every dollar of revenue into more profit and more cash.   One of the positive byproducts of the turmoil related to the pandemic is that business owners, management and employees are more aware and likely more open to the need for change than ever before.   The time is right for businesses to count on their CFO to bring a thorough, disciplined methodology to deliver operational excellence and improved financial results. Uncover more.

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Thriving in a New World Strategist

Thriving in a New World Strategist

In the introduction to our CFO Contribution Series, Thriving In the New World Strategist, we suggested that most business owners may not be well served by high-level, third party driven, divergent strategic exercises. Certainly, there is significant value in undertaking far reaching, blue sky thinking. Most small to medium size organizations will be better served by incorporating their own foresight into targeted, most probable future scenarios developed by highly engaged participants directly linked to the success of the business.

There can be no doubt the Covid-19 pandemic has led to unprecedented change for most businesses. Revenue levels have plunged for some firms while others are experiencing unexpected increases in new customers and unforecasted demand levels. Supply Chains have been disrupted. Optimizing employee productivity and satisfaction have become more art than science. Short-term cash availability and long term capital requirements are highly uncertain. Even the most confident experts are reluctant to make a call on the economic climate we are likely to experience a year from now or even six months from now.

Success in this uncharted New World requires business owners to make effective decisions to address today’s challenges and to establish a strong market position in an uncertain future. We call this Future Proofing your business. The path forward will be unique for every enterprise. For most businesses, the contribution of an integrated senior financial leader can be a major factor in making the best decisions for steering the business towards a successful future.

Owner operators will particularly benefit by injecting their full time or part time CFO into idea

generation and implementation planning to future proof their business using the following four-step process.

Developing Most Probable Future Scenarios

The insight of the CEO along with sales and market-oriented management will understandably be essential to develop and select three or four most likely market scenarios. Important dimensions for assessing your business’ future would include revenue outlook, new revenue sources, changes in access to customers or preferences of customers, competitive forces, regulatory factors and assessment of staff effectiveness. Identifying these factors specific to your business and your industry should be considered in conjunction with the team’s projections of potential future operating environments.

Involving a holistic professional with the ability to stretch the team’s future thinking to include the full spectrum of potential obstacles often leads to more robust, more complete future scenarios. Team members should expect the organization’s financial leader to embrace the uncertainties inherent in guessing at potential futures while also expecting them to act as a catalyst to describe the leading scenarios with sufficient clarity to facilitate resiliency testing and implementation planning.

Leveraging Emerging Technology

The pace of change over the past five to ten years combined with the recent accelerated societal and economic changes linked to the pandemic forces all businesses to adapt and respond quicker and more intensively than ever before. Adapting and responding effectively requires timely and appropriate application of emerging technology solutions to uncover new connections to customers and to unlock methods to streamline and enhance business processes.

A few of the more pervasive and perhaps highest potential technology trends destined to shape the future are Artificial Intelligence, Blockchain Technology and Internet of Things. Finance leaders bring essential analytical skills, as well as opportunity and risk assessment expertise. These attributes will help the business select the most advantageous solutions and deploy these applications to deliver favourable returns.

Stress Testing Scenarios and Strategies

Once the business has collaboratively generated their high probability future scenarios and articulated corresponding strategies to maximize results; a critical need emerges for disciplined evaluation to ensure the selected paths forward can stand up to expected obstacles and deviations.

The CFO’s involvement in scenario testing is likely to be most accepted and welcomed by the business owner and the future proofing team. A New World CFO is one that passionately embraces uncertainties and optimism while maintaining their proven ability to rigorously apply a check and balance approach to the team’s chosen future scenarios and strategies.

Commitment to Highest Impact Initiatives

The hardest decision for many organizations undertaking future proofing activities during today’s tumultuous environment will be to commit the necessary financial and human resources to those chosen few initiatives expected to best position the business over the next six months to five years.

Creating the internal and external confidence to act now often hinges on the development of concise, compelling business cases to define the initiative, its costs and expected profits. The involvement of your financial leader in the entire future proofing process will significantly enhance the quality and effectiveness of these strategic business cases. In situations where the organization is seeking external financing or participation from partnering organizations; the voice of an informed, engaged, credible CFO will be a significant factor in securing the desired external support.

Business owners and their management teams have the responsibility to navigate the firm through today’s urgent challenges and opportunities. They also bear the greater responsibility to establish direction and take action to prepare the organization to succeed for many years ahead. A New World CFO welcomes this responsibility and possesses the knowledge and dedication needed to deliver results today and in the future. Discover more.

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Introducing the Thriving in the New World Series

Introducing the Thriving in the New World Series

Thriving in the New World series is The CFO Center’s unique approach on how we can truly make a difference to your business. Explore how a transformational CFO, as a Strategist, Operator, Leader and Guardian, is essential to future proof your business.

The Covid-19 pandemic has transported almost every business into a new reality with greater obstacles and greater, or certainly different, opportunities. Many business owners are operating at ground level to address challenges that threaten the livelihood of their employees, the continuity of their customers and the future of their business.

Now is not the time for strategic retreats, or high-level consulting reviews. Entrepreneurs that thrive in this new world will be those that combine their experience and knowledge with the insights and expertise of involved, committed individuals. These entrepreneurs will possess the mindset to navigate each day’s most pressing issues while charting the course for the business to move forward.

Now is the time to ensure your business is enjoying the leadership and hands on guidance of a New World CFO. Accenture defines the new CFO as a “value-oriented individual who views the world through a different lens” . They see themselves as value architects whose primary focus is helping the organization drive profitable growth.

All businesses have staff or advisors in place to manage the financial requirements of their business.

Perhaps more than ever before, businesses of all sizes, and all stages of development will benefit from finance oriented leadership that goes far beyond the numbers, far beyond basic reporting and far beyond being the controller or watchdog for the business.

If you own and operate a small to medium-sized business, you may have gotten by without access to the “C” level expertise of an experienced CFO. Thriving in your new world may require access to a proven, holistic financial leader driven to grow your business profitably.

This four-part – New World CFO series will provide specific, understandable and implementable information designed to help your business thrive and survive. Uncover more about the benefits of futureproofing.

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“This too shall pass”

If history has taught us anything, it’s that the only constant in life is change.

Over the course of the last century alone there have been a litany of challenges and numerous disasters, all of which have one thing in common – they’ve all passed.

Some months from now – it’s impossible to predict the true timeline – the current situation we face with Covid-19 will too have passed. It will have left in its wake a trail of debris and destruction which we ought not minimise, but it will pass.

As the great German writer Goethe once said: “Fresh activity is the only means of overcoming adversity.” It’s a wonderful way to focus the mind on proactive, practical activity and look forward. To deal with things that you can influence and change rather than those you can’t.

As Chief Financial Officers part of our role is to use our knowledge of the past and translate it into actions that bring about a better future.

With 440 of us in the US and abroad, many of us spanning 3 or even more decades of service to SMEs, we have weathered many storms. We’ve also come out the other side.

And we have learned from those experiences that there are certain actions we must take quickly if we want to overcome adversity and put ourselves in a stronger position for when the storm abates. In the midst of the storm it can be difficult to make sense of what is happening. This is precisely the time to slow down for a moment, as hard as it may seem, and make some proactive decisions.

To address the negative, we can take it as read that the speed at which many industries will contract over the coming weeks will increase. Primary industries such as aviation, travel and tourism, events and conferencing, restaurants and pubs, will suffer devastating blows as will the supply chains they support. The ripple effect will affect everyone, in some way or other. These events are already in train.

While all that happens, as SME owners, we have to do whatever we need to do in order to weather the storm and come out stronger the other side.

And you don’t have to face that challenge alone. There’s a lot the government and banks are doing to help small to medium sized businesses get through the challenges of the coming weeks and we’re also here to help you navigate the options and put you in the strongest possible position when some sense of normality is restored.

Below are some key considerations, risks, opportunities and resources. If you would like us to help you navigate the options, we are offering a courtesy 1:1 Scenario Planning Call to help you get clarity around what you should be doing now to put you in the strongest possible position.

 

  1. Scenario Planning
  • If you are predicting a reduced demand what will be the impact on sales and cash?
  • What costs can be cut or deferred? Is there flexibility in the cost base that could partially offset a downturn in revenues?
  • Are there major capital expenditures which could be postponed?
  • Over what time period might you expect revenues to be reduced?
  • What impact might you expect in regard to late payments from your existing customers?

 

  1. Supply side: 
  • Are you likely to be impacted by a break in supply of inputs/services from other businesses struggling with the virus?
  • How much contingency are you holding if supplies of inputs stopped/became erratic?
  • Are there alternative sources of supply if a supplier fails?
  • What is the likely impact on workforce – do you have a business continuity plan, can workers productively work from home/remotely?
  • Could you look at taking measures now to reduce the risk to your workforce; e.g. more virtual meetings rather than asking staff to travel?
  • Are you operating in an area which could be impacted by “lock down” measures e.g. city center, does the workforce travel largely by public transport (impact if closed/restricted), would the travel patterns of the workforce mean it would be necessary, for staff safety, to suspend travel to the head office/main site.

 

Demand side:

 

  • Potential impact on sales volumes – e.g. what is your level of exposure to consumer demand, are you B2B or B2C, are your corporate customers likely to be significantly impacted (airlines, cinemas, hotels, restaurants, attractions, events, etc.?
  • Any delivery issues for goods/services?
  • What are the contractual implications of failure to service customers (do they have a force majeure protection in contracts?)
  • Does the client have contracts which enable clients to claim force majeure and cancel commitments without penalty – worst case what might this mean in terms of the liquidity scenario planning.


Communications:

 

  • Who should you be contacting now – suppliers to see what contingency plans they have, customers to reassure, other stakeholders?
  • If someone has an issue, do they have the means to communicate with you?
  • Can you post messages on your website remotely if required as a means of keeping customers, suppliers notified?

Staff:

  • What is your policy on sick pay if staff have to self-isolate
  • Are there contingent measures that can be put in place to bring in temporary staff if necessary?

 

Miscellaneous:

 

  • Any business-critical single points of failure?
  • Can you switch your office phones to an alternative line?
  • What insurance arrangements do you have in place?

 

Prepare for the upside

 

All of the suggestions mentioned above constitute the day to day role of a CFO. These are things that companies ought to be doing as a matter of course, but of course, many do not.

 

The advantage of going through this process now is that it will enable you to build a better, stronger, more resilient business for the future. Whether Covid-19 or the next major recession, or some other unforeseen event, knowing that you have done all that you can to prepare your business will give you greater confidence in the future.

 

The future of work is all about remote working, flexibility, greater specialisation and outsourcing. The Coronavirus will increase the pace with which we transition to a new global model.

 

We encourage you to be cautious and use this time to spark ‘fresh activity’ and build a stronger, leaner business for the future.

 

We are here to help and are offering 1:1 Scenario Planning Consultations to help you make the right decisions to get you through the coming weeks and prepare you better for when the current madness subsides.

Business Growth – An Interview with Miami CFO Stuart Brown

Stuart Brown joined The CFO Center in 2019, before this he accumulated more than 20 years of finance experience and has more than ten years’ experience as Country-level CFO for both International and Local Carriers. He has had a lot of success growing businesses he has worked for, so we thought it would be a good idea to ask Stuart for his top tips on scaling up a business:

 

What does growth mean in business?

With growth, what you’re really talking about is growth in sales. You’re acquiring new customers; you’re acquiring new market share. It’s vital to remember the importance of profitable growth. Sales, in and of itself, cannot be the only driver, you’ve got to have sales that are going to be generating positive cashflow and positive future earnings.

 

What is the difference between Organic growth and Acquisition?

Generally speaking, organic growth is business that’s being generated internally. The business is engaging in its working plans, it’s seeking new customers, it’s seeking to acquire that growth based on its existing business. When you talk about acquisition, the business is going out and purchasing a block of business. Sometimes that means actually purchasing another firm, purchasing another company, but it could be purchasing, for example, customer lists or purchasing a client base in some other way.  It’s a growth that is purchased and brought into the existing business rather than growth.

 

Are there different stages of business growth?

Absolutely! When a business is first starting out, that’s referred to as expansion, which is where the business is looking to establish its niche to gain its first customers. A lot of times it revolves around figuring out what works and what doesn’t work and there’ll be a lot of trial and error and mistakes that will be made along the way.

Once the business makes it out of that phase and has established the business model, it is in a classic organic growth phase. That presents a new set of challenges for business owners, because you’re scaling up, you’re moving from perhaps a single location to multiple locations. You’re building out your client base, you’re building out your employee base, and it begins to get out of the scope of perhaps a sole proprietor.

The final stage when you get to maturity is when you have an established market and you have procedures in place, and you know how to operate your business. That then presents a new set of challenges because it’s much more difficult to acquire new customers. Profitable growth is going to come primarily through efficiencies such as controlling expenses. Then as we mentioned before with acquisitions, if the business finds that all of the opportunities for growth have been exhausted, it may look to acquire rivals.

 

What are the main issues that can come up when growing a business?

What happens for a lot of entrepreneurs, in various industries, is that the business starts as a result of a brilliant idea and a sole proprietor can manage it perhaps just in one single location. For example, if it’s a retail store, perhaps they have a single boutique store, but when that store becomes successful and it becomes perhaps 10 stores, that presents more of a challenge because now it’s outside of the scope of that original entrepreneur to manage everything directly. He or she cannot be aware of everything that’s going on across the small stores. That is then the time they need to bring in some management to help them and they need to try to figure out processes and procedures and standardizations to make sure that everybody is operating off of the same set of instructions. As a company continues to grow, that gets to the scope where it’s even too large for a small set of managers and it becomes much more important to have made a driven analysis, professional management and have established procedures for how the business is going to operate.

 

How does a CFO help with any of the stresses of scaling up? How can they help in general with scaling business?

I think CFOs are uniquely positioned to do this and CFOs are accustomed to looking at the world through a financial lens. Understanding how different actions and how different situations will impact the business from a financial point of view. We’re trained to look at things from both the long term and a short-term perspective. Of course, you want to make sure you get your monthly numbers and your quarterly numbers, but you also want to ensure that the business is well positioned for the long term. You want to look at it from a top line and the bottom line. I mentioned earlier about sales, but you also have profits. It’s not good enough to have growth in sales if you’re losing money. You also want to look at it from a cashflow perspective as well as from a P&L perspective. Many times, something that creates a short-term boost on the profit margin may have negative implications for cash and vice versa. A good CFO understands those two situations.

 

What are your three top tips for business owners wanting to scale up?

My first tip would be to focus on the fundamentals. You have to understand your business and understand what the metrics and profit drivers are. The second tip is to trust the advice and to trust the professionals that you have around you. Get good people in, bring in subject matter experts and be willing to let go. Lastly, my third tip is that successful business owners need to have fun with their businesses. When they started their business, it was presumably something that was enjoyable – try to keep it that way!  Make it something that’s fun and fun for everyone that’s working in the business.

Michael Meyer - Mid-Atlantic Region, Regional Director/Principal 1

“For the first time in my life I am a part of a group that is dedicated to supporting one another.”

With 30+ years’ CFO experience working in corporate both in the US and globally, Michael was tired of the insecurity of employment but hadn’t explored a career in consultancy. A month after his twins were born, he was made redundant in his current position. With a supportive wife and a nudge in the right direction, he turned to the world of consultancy.

For many years, he bounced between consulting and employment and learnt a great deal. With consulting, he enjoyed the chance to make a real difference but missed the team spirit and camaraderie that working in corporate provided. So, in November 2016, Michael joined the CFO Center and hasn’t looked back.

“Even when you are in a company, and part of a team, you are the only CFO and so you have no one to share ideas with or get help from. Here, colleagues, far and wide, have supported me to help me win clients and solve problems. In return, I am able to offer assistance to colleagues around the world as, collectively, we have an unparalleled wealth of experience.”

If a client no longer needs his services, Michael is no longer in a binary situation, as he is only losing part of his pay, and with the help of The CFO Center he can quickly replace that lost revenue.

Does any of Michael’s story sound familiar?

Could now be the right time for you to develop your portfolio career?

We’d love to hear from you – https://www.thecfocenter.com/join-the-team/

Top 9 Advantages of a Part-Time CFO

The quicker you want your company to achieve its goals, the sooner you should consider hiring a part-time CFO.

That’s because a part-time CFO will provide your company with the high-level financial expertise necessary to scale up (things you and your team may not even be aware you need), for a fraction of the cost of a full-time CFO.

Hiring a part-time CFO provides your company with many advantages that really help it to grow and stand out in any marketplace. But here are the top nine advantages you and your employees and stakeholders can expect when you hire a part-time CFO.

1. Cost-saving

By hiring a part-time rather than full-time CFO, you can avoid the often-hefty recruitment and hiring costs (and the delays they inevitably entail). What’s more, you can hire a part-time CFO for a fraction of the cost of a full-time employee. You won’t have to offer a benefits package or bonuses to retain the appointee.

2. Strategic advice

Your part-time CFO will provide you with strategic analysis and support on every financial aspect of your business. A report from the Financial Executives Research Foundation (FERF) described CFOs as “critical to the success of start-up and early-stage growth companies” since they provide key insights.
It found CFOs play key roles in not only managing a young and fast-growing company’s finances but also in setting broader strategic goals and establishing and achieving financial and non-financial milestones.

What’s more, part-time CFOs can highlight potential threats or risks of which you and your team may be unaware or perhaps don’t know how to deal with.

3. Flexibility

You can use the services of your part-time CFO for what you need when you need it. That could be for a variety of different financial functions or a specific project. This means you and your CFO can tailor the role to suit your company’s needs at any time.

4. Multiple industry experience

Although you can choose to work with part-time CFOs who have direct experience in your given industry, you can also opt to work with those that have experience across multiple industries. The advantage will be that your CFO will provide you with access to networks and multi-layered insights that you might not otherwise have.

5. Crisis management

The loss of major contracts, customers or employees can be devastating for any business. Your part-time CFO will be able to help you and your team navigate your way out of the crisis. This could include producing short-term cashflow reports, identifying costs that can be cut, producing new financial forecasts, and helping with raising vital funds.

6. Sounding board

Running a company can often be a lonely, stressful experience for CEOs, according to the FD Centre’s Chairman Colin Mills in his book ‘Scaling Up How to Take Your Business to the Next Level Without Losing Control and Running Out of Cash.[1]

He’s seen first-hand what pressure does to business owners.

“I’ve sat in sales meetings with entrepreneurs who had literally been brought to tears by stress and frustration and the feeling that it’s all too much.”

That’s where a part-time CFO can help. He or she can act as an independent sounding board for the over-burdened, stressed-out business owner. With their ‘big business’ experience, it’s more than likely CFOs can provide solutions to what can seem like overwhelming problems to the CEOs of growing businesses.

7. Mentorship for your team

Part-time CFOs help to establish sound reporting systems and tools that help improve reporting metrics and communications to investors. They can also act as mentors to members of your existing finance team, guiding them where necessary and providing the advice they need to rise to new challenges.

8. Access to a national and international network

If you choose a part-time CFO from an organization like the CFO Center, you’ll benefit from the expertise from all the CFOs in its worldwide network. That’s hundreds of years of experience in every aspect of finance—all for a fraction of the cost of employing a single full-time CFO.

9. You won’t get left behind

If you’re still hesitating about whether now is the right time to hire a part-time CFO, consider the sorry tale of Kodak—a company that got left behind, despite once being one of the most powerful companies in the world.

Kodak was once known for innovation (being the creator of the Box Brownie camera, Kodachrome film and the Instamatic).[2] Here’s what’s remarkable—a Kodak engineer Steve Sasson developed the world’s first digital camera way back in the mists of time (actually, 1975). Okay, it was the size of a toaster, took 20 seconds to capture low-quality images which had to be viewed on a TV. But still… it had the potential to disrupt the market massively.

The company poured billions into developing the technology to take photos using mobile phones and other digital devices but delayed acting on it due to fears digital technology would destroy its film and photographic developing business. It failed to act fast enough and to identify the opportunities posed by digital technology.

On January 19, 2012, Kodak filed for bankruptcy protection in 2012, then exited its legacy businesses and sold off its patents.[3] It re-emerged in 2013, albeit in a vastly slimmed down version of its former self.

If you want to avoid becoming a post-script or salutary tale in your market, appoint a part-time CFO. He or she will provide you and your team with strategic help and advice to recognize threats and to seize opportunities—thanks to vast experience and expertise.

The CFO Center offer the services of part-time CFOs with big business experience who can use what they know to help your company achieve rapid yet sustainable growth. What’s more, they’ll help remove fear, confusion and stress from the entire process.

To discover how the CFO Center will help your company to scale up, please call us on 800 919 4022 or contact us here.

How it works

The CFO Center’s part-time CFOs use a proven framework known as the ‘12 Boxes’ to identify where the problems are within any business. They use it to review every aspect of your company finance function and identify every problem area.

They will help you to understand your company’s finances and not only eliminate cash flow problems and identify cost-savings but also to improve profits.

They can also help you and your team to understand your main profit drivers; find and arrange funding; identify your Critical Success Factors and Key Performance Indicators (KPIs), help you to expand nationally and internationally; and build value to make your business more attractive to investors or buyers. To discover more about the 12 Boxes, click here.

Need help?

To find out how an CFO Center part-time CFO will help your business, contact us now on 800 919 4022. To book your free one-to-one call with one of our part-time CFOs, click here.  You can see how they add rocket fuel to any business here.

What people are saying

People are talking about what they really think of the CFO Center’s part-time CFOs. Find out what they’re saying on these short videos here.

Where are you going wrong?

You can identify strengths and weaknesses in your business in just nine minutes with the F-Score click here now. Just answer a brief series of questions, and you’ll receive an 8-page report that will reveal potential current or future pain points for your business. It will also help you to rate the performance of your finance function and uncover untapped opportunities for growth. Click here now to take the F-Score.

Got a Big Question?

Have a burning question for one of our team of CFOs? Just ask it here, and you’ll get an answer within 24 hours. The question must be finance-related (sadly, they can’t predict who will win Wimbledon).

[1]Scale Up: How to Take Your Business to the Next Level Without Losing Control and Running Out of Cash’, Mills, Colin. BrightFlame Books, 2016

[2]The Moment It All Went Wrong for Kodak’, Usborne, David, The Independent, https://www.independent.co.uk, January 20, 2012

[3]Kodak’s Downfall Wasn’t About Technology’, Anthony, Scott D., Harvard Business Review

https://hbr.org, July 15, 2016

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