How a Part-Time CFO Keeps a SME in Top Health
*Small and Medium Enterprise
By Chris Carl
Regional Director at The CFO Centre
A part-time CFO is to an SME what a doctor, a physical trainer, and a world-class coach is to a superstar athlete. The superstar athlete will always be good – but they will only be great if they are healthy (the doctor makes sure of that), they are in great physical shape (the trainer takes care of that) and that they can compete at a world-class level (the world-class coach takes care of that). In a business setting, the CFO Centre refers to these same three levels of conditioning as Business Support (being healthy), Operational Skills (getting in great physical shape), and Strategic Planning (competing at a world class level).
The highly experienced and successful part-time CFO’s from the CFO Centre can help make a company flourish in every respect. From increased profitability, to growth through financing or mergers and acquisitions, to increased happiness in the C-suite and all employees, a part-time CFO can literally help perform miracles. But, these results can only be achieved through sound business practices and a great strategic plan. A successful experienced CFO, that costs only a fraction of a full-time CFO, can make all of these happen.
This article (part 2 of 4) discusses how to ensure your company is in top health through Business Support.
To become a top performer in any field, you have to be healthy to compete. As an athlete, that means not being sick and also being in great health in every measurable way. As a corporation, it means you must have all of the fundamental requirements of running a business under good control.
One of the many ways a CFO can bring value is to run a health checkup of your business to ensure it is strong enough to grow and to compete. For all companies, “financial health” can generally be thought of in four categories:
- Compliance reporting to owners, government agencies and financial partners
- Tax and legal planning
- Outsourcing of professional assistance and support services where required
- Banking and Investor Relationships
Chances are that most of these areas of your business are already pretty strong, but like a chain and many other things in life, the business is only as strong as its weakest link. At the CFO Centre, we call these activities “Business Support.” Enhancing these areas of your business may not seem like they can increase sales or customer satisfaction, but in fact, it is critical for these parts of your business to be in great health to allow you the freedom to have the resources available to support your customers.
While a part-time CFO will have a mandate that is much broader than these financial health-check issues, a great CFO will naturally take a look at these areas of the business to make sure everything is functioning well.
Most businesses require access to some sort of funding assistance to foster growth and innovation. This funding can take the form of a conventional bank loan or line of credit, convertible debentures from private investors, government assistance programs, or common or preferred equity being issued to existing or new shareholders. Though there are many variations of financing available, to be successful in obtaining access to such funding quickly and at the lowest possible cost, the business must be seen as financially healthy.
Making sure that the balance sheet is healthy is a great place to start. Are assets greater than liabilities? Are current assets greater than current liabilities? Once these are in good shape, are the four categories listed above all performing well?
As I have shared with partners, employees and clients over the years, when accessing new funding, it is not enough to have a good idea and be in relatively healthy financial condition to ensure you successfully attract new funding. Rather you need to be “better” than the other 5 or 10 companies your funding source may be looking at.
As an example, if you are talking to a great investor who likes your business idea, you need to remember that investor is likely looking at several other opportunities as well. That means you are competing with others who you can’t see. A great CFO will help you make sure that by being in great financial health, and by having top-notch reporting systems, that you will score very highly in the investor’s eyes against that unseen competition. Why? Because a company that operates smoothly, reports accurately and on time, and has all of the “financial health” issues well covered, is a company that is ready for the challenges that the new opportunity brings.
And of course, the opposite is also true. If your company is good at these things, but not great, you will always have trouble crossing the finish line with these investors because there will always be a company that does have these things under top control that will be viewed as better than you – even if your idea might be better than theirs.
Maybe it is time to ask yourself, “Is my company in as strong a financial health as it should be?”
Your part-time CFO will take on the oversight of the day-to-day tasks for these parts of your business and they will help your current accounting group (whether one individual or a whole team) modify their current processes to make sure they are performing at a top level that is competitive. Usually, this does not involve doing more work, but instead making sure the work is prioritized and is being done right the first time around. This may include automation or outsourcing that strengthens processes, increases expertise and improves profitability.
Do you want to be a world-class competitor and grow your business to its full potential? One of the easiest and most sound ways to get there is to make sure your company is in great health. And there is no one who is better suited to make sure that happens than a CFO.
And, while the CFO will have many more responsibilities than just examining the financial health of the company, an experienced CFO can make this work, and everything else that is required, on a part-time basis. I believe your company can derive its highest possible value by hiring an experienced, world-class CFO who can manage these things at a fraction of the cost of a full time employee.
Is it time for you to find a Part-Time CFO?
Chris Carl has a 30-year career growing manufacturing based companies with novel technologies both as start-ups and within Fortune 500 companies. Having held both CFO and CEO roles, he raised a combined $500 million in debt, mezzanine and equity financing in private and public companies listed in Canada, the US and Europe.
The CFO Centre provides highly experienced, part-time CFOs to small and mid-market organizations at a fraction of the cost of a full-time CFO. We are committed to helping companies work through complex financial issues, in order to maximize profit and provide senior financial leadership.
Our global team has over 400 CFOs across 13 countries; our services include business and strategic plan development, financial reporting, cash flow management, internal control, risk assessment and mitigation, training and development, and negotiations.
1-800-918-1906 or email: [email protected]hecfocentre.ca