Achieve your goals faster and with less friction. This week, our co-hosts Matt Purcell and Matthew Holland talked with JP Mills from the CFO Centre about how you can build your SME by using a part-time CFO (Chief Financial Officer).

This post will include:

• The benefits of utilising a CFO at the growth stage of your SME
• The consequences of not focusing on a financial strategy
• How a CFO breaks down what needs to be improved in any business – ‘the 12 boxes’
• Takeaway tip

Employing a CFO in your business can be the most important thing you do, if you want to grow. When a business owner starts to scale up, they need to have access to the correct information and appropriate skills to help grow the business without friction. Having previously written a post about financial forecasting and how beneficial it is for businesses, this post highlights the importance of using a part-time CFO to help achieve this.

The benefits of using a CFO

The CFO will come in and look at the business holistically, dive deep into each section of the organisation and contextualise what you need as the business owner or the board to make the best decisions. They are always looking forward and projecting around strategy to achieve your goal.

For example, if someone wanted to launch a new product, the CFO would go into the business and understand what was going on at that time, work out their most profitable product and work out the margins. From that, if they needed to get finance for the new product, the CFO would have a network of venture capitalists and investors to connect you with and would help get you in a healthy position for the investors.

It’s important to remember, it’s not all about growth. Sometimes, it’s just about finding ways to improve your profits. The CFO Centre was able to do this with a client they worked with, where they helped a struggling holiday company increase their profit so they were able to sell for $27,000,000 just three years later. After completing a discovery session, looking into the financials, they worked out that the company was making most of its money from one product, whilst the other products were either losing money or only making money at certain times of the year.

After providing them with this information, the business decided to focus solely on the product making the most money and niche in that area instead. This allowed them to strip back their efforts in the other areas, so they could save time and money, whilst capitalising on their best product.

The Consequences of not focusing on a financial strategy

Well, in JP’s opinion, having a financial strategy is exceptionally important and failing to have one can be risky. You need a strategy to actually implement what it is you want to achieve, otherwise the numbers aren’t going to be accountable.

Without a clear path, ultimately, you’re going to find it hard to scale your business up. You want the whole team to understand the strategy so they can get behind the idea and help reach the target.

Takeaway tip

You have to be open to change and you need to have transparency and clarity in the business. It’s about thinking progressively, seeking the best advice, being self and socially aware and being able to network – ‘the power of many’. To find out more about this topic, head over to mentored.com.au or follow the link: https://www.podcastoneaustralia.com.au/podcasts/sme-experts/get-a-part-time-cfo_ _nqn4tdZNKkiyBKqZAHH0-A