1. Forming a clear strategy and plan leads to increased focus and success
You struggle to find the time or don’t have the skills to effectively plan for the future, right?
Accountants focus mainly on the past, they report on what has happened, not what is potentially going to happen. Understanding the past and learning from it, is critical to improve and grow, but it will only help so much.
Big corporates have dedicated teams focusing on planning and strategy. They know that setting goals and formulating plans with targets that cascade downwards throughout teams, gives them a higher chance of success. These techniques can be applied in a simpler way to SMEs and startups.
Planning for the future is powerful as it provides clarity and a sense of purpose. Strategic planning is where virtual CFOs add most value to an organisation. A well thought out plan provides focus, aligns goals across departments and gives teams a sense of purpose beyond the day to day. CFOs are skilled at strategising, analysing options and implementing plans that drive value.
A goal without a plan is just a wish!
2. Forces the business to focus on performance
Many business owners can’t make sense of their accounts they are often too detailed and read like a shopping list with number after number. How do you know if the financial results are good, bad or indifferent? A strong virtual CFO will analyse and summarise the financial position of the company in terms of the past, present, and future.
Through this process they will identify key numbers which teams need to live and breathe. These are critical to success and should form part of your plan and have targets assigned to accountable employees. High performing businesses look at performance in a disciplined and consistent way.
It is proven that what is measured improves!
3. Helps you sleep at night
Many business owners are plagued by doubt, anxiety and stress. A lot of this is driven by the feeling of not knowing. Its often likened to a roller coaster ride of elation and despair.
No magic pill exists to eliminate these feelings, they are natural, particularly in the early stages of a business. But things can be done to reduce the worry associated with not knowing what the future holds.
Cash flow is a common problem. Forecasting cash and implementing smart tactics such as factoring and proactive collections can eliminate some of these risks and bring a sense of control.
Planning and thinking about the future. There may be periods where business will be weak say over December and January, having a plan to prepare for this lean sales period will minimise stress. This could be stock piling cash or looking to get an overdraft.
4. Helps you use data to your advantage
Most businesses use a multitude of software, eDM tools, CRMs, accounting systems, project mgmt systems and analytics tools collecting a large amount of sales, customer, operational and financial data. The problem with these point solution pieces of software is that they rarely talk to each other and the data is usually structured differently making it hard to aggregate and connect the dots. Building up an overall picture of how processes, workflows, metrics, sales and marketing channels drive value is critical to sound decision making.
A good CFO, will have modelling skills and be able to bring disparate sources of info together to draw out insights and aid decision making that will drive growth.
For an example of how we helped a client understand his marketing spends return on investment by channel. Click Data_Example.pdf
Data is the new oil. Are you unleashing it to make decisions and grow?
5. Helps you grow and make critical decisions
Owners without a finance or accounting background plugging away in excel and doing things that are not their speciality is inefficient and ultimately hampers growth. An opportunity cost arises as the owner could be; selling, motivating staff, talking to customers, designing that next product or any number of activities which will drive growth. A CFO will give an owner the headspace and time to concentrate on impactful things.
Perhaps more importantly, when making critical decisions, bouncing ideas of an independent sounding board with commercial and strategic nous, can be of huge benefit. Blind spots and sub conscious biases impact all human decisions, the worst part about these is that we don’t even know they are skewing a seemingly logical thought process when making a decision. Having someone external look at a situation through a different lens can often uncover different considerations and issues relevant to making the decision.
A CFO can be a valuable addition to a growing business and will result in better decision making, planning and focus. CFOs on Demand have flexible and affordable virtual and part time CFO options, giving you the best chance to achieve your goals, grow revenue and improve cashflow.