Knowing the right strategies to employ and what indicators are important to monitor when you’re experiencing growing pains can be a challenge even for the most seasoned of SME business leaders. The cost to elevate your organisation’s financial and strategic capabilities with a full time CFO is often out of reach for many businesses, as CEO of Ecetera, Peter Brown, discovered as his business grew from a two man operation to a thriving Dev Ops consultancy serving some of Australia’s largest organisations. The ability to access the four aspects of a CFO namely: financial, cash-focussed, strategic and, advisory was an unforseen bonus.
“Ecetera exists to help organisations deploy software they develop into production faster, easier and more reliably than ever before. As our business grew so did our challenges in managing cash flow and revenue growth, as well as our ability to identify areas within the business where we could improve performance”, Peter said. “We have a great team of experienced people but I knew we needed to access the type of strategic financial experience and wisdom that only a CFO can deliver and we just didn’t have within the business. But like many growing businesses we could not justify the cost of a full time CFO.”
Peter is not alone. As SME’s make the transition from small business to corporate, many recognise that in order to get to the next level in their growth trajectory, they need to employ the type of strategic and financial experience that they often are simply unable to afford. Without that level of experience, many SME’s find it difficult to pinpoint their real issues and they ultimately go unaddressed.
Ecetera’s solution was to tap into that senior experience without the costs associated with a full time CFO hire.
“For the past 6 months we’ve been able to get the strategic experience we needed with CFO Evolve but at a part time rate”, Peter noted. “That CFO level of experience in our business has meant we’ve been able to identify bottlenecks and put our finger on what are real issues are.”
Peter commented that the type of financial discipline and transparency that partner CFO Evolve has brought to his business has given the management team the confidence and direction to address the concerns that matter most to the organisation’s growth.
“We now have a greater level of transparency across our business. We use a really simple dashboard of key indicators which suit our specific business that we can monitor week by week and we have the CFO support to focus our heads of each department on the right priorities, results and expectations”. And the reaction from the Ecetera finance team? “Our Financial Controller is able to learn and develop new skills because of that part time exposure to such senior financial wisdom. It’s really a win-win for all of us”.
For an SME business moving through the stages of survival, then growth towards success, knowing what strategies to employ to take you to the next level can be challenging. Whilst every business is unique there are however, many characteristics of businesses that are universal, regardless of business size, market and stage of maturity. These are, of course: marketing and selling goods or services, delivering the goods on time and to the requisite level of quality and receiving the cash for them in a timely manner.
Whilst these stages may seem somewhat generic and even obvious, these are the key elements that need to be managed in a way that seamlessly allows the business to move from one lifecycle stage to the next.
One of the key differences between an SME and a large company is the way they think strategically and ensure those strategies are precisely what that business requires at their stage of evolution with importantly, the cash to execute those strategies.
In large companies there is one senior executive that sits across all the strategies and finances of the business continually driving it from one level to the next – the Chief Financial Officer. For SME’s to grow seamlessly from one stage to the next the same strategic and financial skill should be employed as early as possible in the businesses life.
For SMEs, a part-time CFO brings all the skills and wisdom available to the big end of town for a fraction of the cost. In particular he believes there are four aspects of this role that are particularly beneficial to SME:
1. CFOs have financial clout.
2. They possess a robust understanding of future cash requirements.
3. They are always strategic.
4. Given their corporate experience, they will act as a trusted advisor.
CFO Evolve provides exceptional part-time CFOs, passionately building great businesses through financial and strategic insights. Contact us if you think that we can assist with your business growth.
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