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This Too Shall Pass

“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. As with the bush fires, it will have left in its wake a trail of debris and destruction which we ought not take lightly, 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 CFO’s part of our role is to use our knowledge of the past and translate it into actions that bring about a better future. With 750 of us globally, many of us spanning 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 that the government, the ATO, and banks are doing to help small to medium sized businesses get through the challenges of the coming weeks. The CFO Centre is 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. Please contact us via email at [email protected] or call us on 1300 447 740.

Protect the downside


Cash is king. What cash buffer do you have in place, what funds can be drawn down from available credit facilities if required? Some relief may be found within the Federal Government’s stimulus package:

Cashflow forecasting is essential – but is only as good as the assumptions used (see Scenario Planning below).

 2. 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 regarding late payments from your existing customers?

3. 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 centre, 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.

4. 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 – what might this mean in terms of liquidity planning?

5. 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?

6. Staff

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

7. 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 complimentary 1:1 Scenario Planning Consultations (which can be conducted remotely via video call) to help you make the right decisions to get you through the coming weeks and prepare you better for when the current madness subsides.

Please contact us via email at [email protected] or call us on 1300 447 740.

Hardhat for safety

Embrace the ‘F’ Word

If You Want To Succeed, You Need To Embrace The ‘F’ Word

What do Sir James Dyson, the Mercedes F1 team, Pixar, Google and the airline industry have in common?

They’re hugely successful, yes. But the thing that links them is they never shy away from the ‘F’ word—Failure. Instead, they face and learn from their mistakes, errors and mishaps. So says Matthew Syed, award-winning Times journalist and best-selling author of ‘Black Box Thinking: Marginal Gains and the Secrets of High Performance’ (John Murray).

“We have an allergic attitude to failure,” he says. “We try to avoid it, cover it up and airbrush it out of our lives.

“For centuries, errors of all kinds have been considered embarrassing, morally egregious, almost dirty.

“This conception still lingers today. It is why … doctors reframe mistakes, why politicians resist running rigorous tests on their policies, and why blame and scapegoating are so endemic.”

This notion of failure needs to change, he writes. “We have to conceptualise it not as dirty and embarrassing, but as bracing and educative.”

That’s because success in business (as well as in sport and in our personal lives) can only happen when mistakes are confronted and learnt from and there’s a climate in which it’s safe to fail.

It’s what the airline industry has done so successfully, he says. Instead of concealing failure, the aviation industry has a system where failure is inherently valuable and data-rich, says Syed.

In fact, his ‘Black box thinking’ refers to the black box data recorders that all aircraft must carry to provide information in case of accidents. One box records instructions that are sent to all on-board electronic systems and the other records the voices in the cockpit.

“Mistakes are not stigmatised, but regarded as learning opportunities,” he says. After a crash, an independent team investigates.

“The interested parties are given every reason to cooperate since the evidence compiled by the [independent] accident investigation branch is inadmissible in court proceedings. This increases the likelihood of full disclosure.”

What’s more, after an investigation into an accident is completed, the report is made available for everyone.

“Every pilot in the world has free access to the data,” writes Syed. “This enables everyone to learn from the mistake, rather than just a single crew, or a single airline, or a single nation.”

Syed gives the example of United Airlines Flight 173 which took off from JFK International airport in New York on December 28, 1978, bound for Portland Oregon.

Just before the airplane went ito land, the flight crew became convinced the landing gear hadn’t locked into place. They then spent so long trying to fix the problem that they ran out of fuel and had to crash-land into a residential area, killing eight people onboard.

An investigation discovered that the flight engineer hadn’t been assertive enough in telling the Captain the fuel was running low. The Captain meantime was obsessed with trying to fix the landing gear problem and avoid giving passengers a bumpy landing.

As it turned out there had not been a problem with the landing gear in the first place.

Afterwards, new protocols were put in place and training methods were revised. As a result, nothing quite as bad has happened again.

So much so that flying on airplanes is now safer than any other form of travel because the industry investigates and learns from its mistakes.

“Openness and learning rather than blaming is the instinctive response – and system safety has been the greatest beneficiary,” Syed told Director magazine.

Dyson Vacuum Cleaners

Sir James, the designer, inventor and entrepreneur, is another committed to learning from failure.

He made 5,127 prototypes of his bagless vacuum cleaner before he got it right. This practice has obviously paid off because Sir James is now worth more than £3 billion.

“Creative breakthroughs always begin with multiple failures,” says Sir James. “…True invention lies in the understanding and overcoming of these failures, which we must learn to embrace.”

Without them, innovations won’t happen, he says. “Failures feed the imagination. You cannot have the one without the other.”

Great inventors always develop their insights not from an appraisal of how good everything is, but from what is going wrong, Sayed wrote in the Daily Mail.

Using Failure To Grow Your Business

Obviously, failure is only useful if it’s acted upon. “You can build motivation by breaking down the idea that we can all be perfect on the one hand, and by building up the idea that we can get better with good feedback and practice on the other,” says Syed.

Some of the world’s most innovative organisations like Pixar, the Mercedes F1 Team and Google “interrogate errors as part of their strategy for future success.”

Take Google’s decision to test which shade of blue in its advertising links in Gmail and Google search worked best, for example.

Rather than ask its designers to choose the shade of blue for those links, Google decided to run tests known as ‘1% experiments in which 1% of users were shown one blue and another in which 1% of users were shown another blue. Then Google went further and ran 40 other experiments showing all the shades of blue.

It paid off: Google found the perfect shade of blue (the one that users were more likely to click on) and made an extra $200 million a year in revenue.

Why Don’t Companies Embrace Failure?

One of the biggest problems in business is the collective attitude we have to failure, says Syed.

“We love to think of ourselves as smart people, so we find mistakes, failure and sub-optimal outcomes challenging to our egos,” Syed said in an interview with Director magazine. “But the reality is, when we’re involved in complex areas of human endeavour—and business is very complex—our ideas and actions not being perfect is an inevitability.

“If we’re threatened by our mistakes, and become prickly when people mention them, we don’t learn from them. We need to eradicate the idea that smart people don’t make mistakes.”

To really be successful, businesses need to encourage a company-wide failure-embracing culture which in turn will create a “process of dynamic change and adaptation”.

“Success happens through a willingness to engage with, and change as a result of, our failings. Get that right and everything else falls into place,” he says.

If you would like to download the CFO’s Centre’s report on Risk you can do so here

You can also arrange a complementary 1:1 Finance Breakthrough Session with one of the Australia’s top CFOs here

From Zero to Hero

Business control is vital – at both ends of the business spectrum

After the first flush of start-up, many business owners find themselves faced with common problems caused by business control. Those problems tend to polarise into coping with potential failure or run-away success – the ‘zero or hero’ scenario.

The heroes are fast-growing, successful businesses, usually with considerable drive and enthusiasm from business owners. Heroes are clearly going in the right direction, and appear to be getting there rapidly. However, like a fast train, without good control systems, knowing when to slow down or accelerate and understanding all the signals – a hero-business can easily run out of track and suffer a spectacular crash.

The zeros are those businesses that for some reason are finding life difficult. These can often be potentially great businesses, but they find themselves in a situation where their viability may be threatened, again by poor business control.

It is immaterial whether businesses fail with a huge fall or sink slowly and uncontrollably, the result is always the same.

Issues facing the business hero

Hero-business owners are often extremely enthusiastic, have great business ideas, products or services and are consumed with ambitions for growth. Such businesses, led by their highly driven business owners, are usually great to work in, customers and suppliers alike are impressed with the never say die attitudes.

Prime amongst the issues for the fast growing start up is being under-capitalised – the great idea can often die as a result of just not having enough cash. The enthusiastic owner whose vision drives the business can suffer from a lack of vision for coping with growth.

Dealing with the zero scenario

Zero businesses are strugglers. They can be fallen heroes; however they are usually businesses that have striven to survive almost from day one. They often adopt a wait and see policy, hoping that things will get better.

They are usually characterised by a lack of profitability and cash. The constant pressure of trying to juggle cash to make ends meet overshadows the viability of the business and the potential success that lies within.

Driving up the zero and controlling the hero

As with the medical profession, prevention is always better than cure. However, even business cases that may appear terminal can often be rescued.

The solution lies in business-based financial support and advice. The problem facing both heroes and zeros is finding and funding that advice. Frequently, business owners bemoan the difficulty in finding and sourcing affordable advice. However, in some cases they cannot afford to be without that advice.

Finding advisors with the right track record

As with so many other things, the business owner should go for experience. Someone who has “been there seen it and done it”. One immediate response is to hand the problem to the accountant. This can provide a solution, but in reality, most external accountants are not experienced in running a business.

An experienced chief financial officer (CFO) is invaluable in recognising the danger signals and providing solutions, they know how to finance a business, deal with growth, present meaningful monthly numbers and get the best deals from banks.  At some point both heroes and zeros need this experience but they probably don’t need it full time – this is where an outsourced CFO provides the best solution. Watch a 3 minute video here to find out how you can take on one of Australia’s leading CFOs for a fraction of the cost of a full-time employee.

Access financial management skills at a fraction of the cost of a full time resource

Owners of hero to zero businesses are prime candidates for an outsourced part time CFO solution. With the outsource option, business owners can access a financial management skill set, that is experienced in dealing with problems and opportunities, able to organise both the in-house and external accounts functions, and provide the necessary business advice.

The outsourced CFO has the skill set to plan and implement the controls needed to help the zero business survive and the hero business to grow positively. Additionally, an outsourced or virtual solution does not impact payroll or headcount with the business only charged for the days worked – which may only be a few days per month.

Business owners – zeros or heroes – cannot afford to be without business-based financial advice. The outsourced CFO should be their first priority, before they hit the problems, after all the more time a business has to rectify a situation the more chance of success. Watch our 60 second video on how our outsource model works

Operational Skills for Business

Don’t Bankrupt Your Company Like So Many Olympic Host Cities Do

The Olympic Games allows top athletes the chance to compete against the best in the world and gives TV audiences the opportunity to watch non-stop sports for three weeks, but it’s usually an economic disaster for the city that hosts the event.

The fact that host cities are left with a few over-sized stadiums (so-called ‘legacy projects’) and mountainous debts once the 17-day sporting extravaganza is over shouldn’t come as a surprise.

Only the insanely optimistic continue to ignore decades of research that show hosting the Olympic Games rarely improves a city’s economy. Despite the promises of politicians, the costs are usually far higher than projections and the revenues far lower.[i]

And contrary to what is promised, tourist numbers don’t go through the roof even during the Olympic Games. Take the 2000 Summer Olympic Games in Sydney, for example. They were expected to attract 132,000 tourists. Instead, just 97,000 arrived, reported the Globe and Mail’s International Affairs columnist Doug Saunders.[ii] Tourists who weren’t interested in the Olympic Games cancelled or delayed their visits for fear of crowds, he said. And instead of the eight to 10 million tourists a year who were forecast to visit Sydney in the years immediately following the Olympics, a steady 2.5 million visitors a year turned up.

Likewise, international investors don’t beat a path to a city’s boardrooms just because the host city has a new 30,000-seat stadium or a better bike path.

Yes, hosting the Olympic Games might put the city on the ‘world map’ for a few weeks but that comes at a cost of billions. An entertaining YouTube video that goes viral will do much the same these days at a fraction of the cost.

Even bidding for the honour of being chosen to be a host country is an almost guaranteed way of losing millions of taxpayer dollars. Chicago, for instance, reportedly spent $100 million on its campaign to host the 2016 summer games.[iii] It obviously lost out to Rio De Janeiro.

Now just because you have no plans whatsoever to host a sporting event or even to take part in one doesn’t mean you’re exempt from the risk of bankruptcy. That’s because bankrupting your own company is far easier than you might think. And unlike the people who lead the bids to host the Olympic Games, you can bankrupt your business in a matter of months rather than years—if you really put your mind to it! All you really need to do is manage your cash flow poorly. That’s enough to rock the foundations of even the most profitable business.

If you don’t find and fix the cause of the cash flow problem in your business and then put systems in place to manage it more efficiently, your company is at a very grave risk of following all those ailing Olympic Games’ host cities into the red. You can grab a free report on how to improve your cash flow position immediately, by just clicking here.

The stark truth is without cash, your business will be unable to meet its payroll obligations, be more likely to default on payments to suppliers and creditors, and in the worse case, be forced to cease trading.

You might think you’re immune from danger because your business is experiencing a high level of growth, but you’re wrong: expansion can exacerbate the problems caused by poor cash flow management.

Cash really is the oxygen on which every business depends. Without a steady supply of it, your business cannot survive.

That applies even if your company is profitable. Business consultant Bill McGuiness says, “The sad fact is that the majority of failing firms are profitable as they enter bankruptcy.”[iv]

Essentially, your cash flow problems are likely to be the result of one or more of the following:

  • Poor collection from debtors
  • Your fixed costs are too high
  • Your prices are too low
  • Your sales are too low
  • You’re giving customers too generous payment terms
  • You’re overtrading
  • You’re holding too much old stock

Just as an athlete can’t ignore an injury, you can’t overlook your cash flow problem. Like a dodgy knee, it won’t get better on its own. In fact, it will get far worse. Fortunately, there’s a quick and easy way to resolve the problem: hire a part-time Finance Director (FD) or CFO.

The CFO Centre will provide you with a world-class CFO with ‘big business experience’ for a fraction of the cost of a full-time CFO. It’s the business equivalent of having an Olympic coach at your beck and call. You can watch a 3-minute video here which explains the part-time CFO model.

Your part-time CFO will identify and address all the immediate threats to your business and then prevent cash flow problems from recurring.

Your CFO will encourage you to use regular cash flow forecasts so you know how much cash is going to be needed in the coming months. It means you’ll know in advance if you’re likely to face a cash shortfall and can make arrangements for extra borrowing, or take other appropriate action.

Having the right cash flow management processes in place and being able to spot peaks and troughs in trading to improve cash flow is one of the most critical components of any finance function.

Put an end to your cash flow problems now by calling the CFO Centre today. To book your free one-to-one call with one of our part-time CFOs, just click here now.


[i]Boykoff, Jules,‘Bidder beware: to host the Olympics comes at considerable cost’, The Guardian,, Oct 31, 2013

[ii] Saunders, Doug, ‘The Olympian task of sidestepping Olympics pitfalls’, Globe and Mail,, Apr 17, 2012

[iii] Zimbalist, Andrew, ‘3 Reasons Why Hosting the Olympics Is a Loser’s Game’, The Atlantic,, Jly 23, 2012

[iv]Cash Rules: Learn and Manage the 7 Cash flow Drivers for Your Company Success’, McGuiness, Bill, The Kiplinger Washington Editors, Inc., 2000

3d Open briefcase

Crowdfunding is No Joke

People might have laughed when twin brothers Alan and Gerry Keery first said they needed to raise around $100,000 to open a café that would only offer breakfast cereals, but thanks to the widespread publicity they garnered from their appeal on the crowdfunding site, Indiegogo, they were able to raise the funds they needed.

Although the funds didn’t come from the Indiegogo platform, the news of the Keery’s plan did attract the interest of outside investors who found it hugely palatable.[i] That meant the brothers were then able to open the first Cereal Killer Café.

It has since become one of the most popular cafes in East London. The brothers are now offering international licensing on their website as well as their own recipe book. A second café has opened in North London, and a third is planned for Dubai.

But the Cereal Killer Café is far from being the oddest idea for crowdfunding. That honour might belong to the amateur scientists known as ‘3 Stags’ who wanted to celebrate the 50th anniversary of ‘Dr Who’ by launching a Tardis satellite.[ii] (To the uninitiated, the Tardis is a telephone box-shaped time machine and spacecraft in which the lead character travels through time and space.)

The project apparently captured the imagination of the people on the crowdfunding Kickstarter platform because they pledged a staggering $88,880—way above the 3 Stags’ original goal of $33,000.[iii] Incidentally, it’s important to know that many crowdfunding platforms operate an all-or-nothing funding model. In other words, if you reach your goal, you get the money, and if you don’t hit the target, everybody gets their money back.

As oddball as the Tardis satellite story is, don’t be fooled: raising money to finance projects and businesses from a large number of people via online platforms is becoming increasingly mainstream.

So much so that it’s now a recognised source of funding for some heavyweight SMEs. Take Cruise Automation, a producer of autonomous vehicle technology, as an example. In April this year, it became the first equity crowdfunded company to achieve a $1 billion exit having been acquired by General Motors.

Before the GM acquisition, the San Francisco-based company had raised about $18 million in venture capital, but its Series A and Series B funding each included $100,000 from syndicates put together via crowdfunding platform AngelList, according to Dan Primack of ‘Fortune’ magazine.[iv]

There are three common types of crowdfunding: peer to peer, equity and rewards crowdfunding.[v]

  • Peer to Peer Lending. The people pledging funds lend you or your company money with the understanding it’ll be repaid with interest.
  • Equity Crowdfunding. You sell a stake in your business to a number of investors in return for investment.
  • Rewards-based crowdfunding. People donate to a project or business with the understanding at a later stage they’ll receive a non-financial reward such as goods or services in exchange for their contribution.

Crowdfunding is just one of many ways to provide your company with the growth or working capital you need. (If you’d like to explore all the non-traditional or alternative funding options, you can download a free report by clicking here.)

As you know, funding is often the catalyst for taking your business to the next level. Provided you find the right partner, the funding can make a huge difference to your business.

If you’re like most business owners, getting the funds is more important than the detail of how to get hold of them! That’s fine if your company has a full-time CFO since he or she will normally manage the process on your behalf to ensure you get the right funding for your immediate and long-term needs. But as an SME, you probably don’t have a full-time CFO. So what can you do? You can try to manage the entire process on your own. Or, you can make it easy on yourself by hiring a part-time CFO to manage the entire process for you.

You can watch a 3-minute video here which explains the part-time CFO model.

The part-time CFO will manage everything from determining your immediate and long-term objectives to finding the right kind of funding partner for the business. Meanwhile, you can get on with what you do best.

The CFO Centre will provide you with a world-class CFO with ‘big business experience’ for a fraction of the cost of a full-time CFO. It’s the business equivalent of having an Olympic coach at your beck and call.

To discover your alternative funding options, book your free one-to-one call with one of our funding specialists—just click here now.



[ii] Wheaton, Oliver, ‘The nine weirdest things people have ever used crowdfunding for’, Metro,, May 6, 2015

[iii] We’re putting a TARDIS into orbit – Really!, Kickstarter,

[iv] ‘Primack, Dan, ‘Equity Crowdfunding Just Head Its First Billion Dollar Exit’, Fortune magazine,, Mar 23, 2016

[v]Crowdfunding Explained: A guide for small and medium enterprises on crowdfunding and how to use it’, European Commission, European Union,, 2015

Warning: Without Exit Planning, You Could Be Left With Nothing

Do you dream of selling your business for a very tidy profit so you can retire and spend your days on luxury cruises or working on your golf handicap?

Well, without an exit plan, your dream may be just that; a dream that never comes to fruition.

Sell at the wrong time or without thinking about the impact of taxation, for example, and you really could be left with nothing to show for your years of hard work.

Every tax adviser that we meet agrees that without appropriate planning, business owners could pay far more tax than necessary when exiting the company. With the correct planning of your exit, at least one year ahead, preferably far sooner, you can minimize, or sometimes even eliminate both capital gains and income tax.

You may also need to consider your partners, directors and managers as incentivising them with shares or options may be a way of aligning them with your goals on the sale of your business.

That said, it’s important to realise that selling the company is not your only exit option. You can also:

  • Transfer ownership to your children
  • Sell to management
  • Take your company public by listing on the stock market
  • Liquidate the assets and take the cash that is realised

Even if your dream is to pass the company on to the next generation of your family, you still need to plan how to maximise the value of the business so they inherit something worthwhile rather than burdensome. Otherwise, you’ll be lumbering them with something closer to a millstone than a prize worth having.

The same principle applies to liquidating or publicly launching the company. Your plan should be to maximise its value and therefore maximize your options for an exit.

An exit plan allows you as the owner to remain in control of the sale (or succession) process and focus the business on the most critical value-enhancing strategies before your exit.

You might think you’re too busy right now to create an exit strategy but time really is of the essence if you want to get the business in shape to exit.

You’ll need time to develop unique sustainable selling points so you can show prospective owners that the business will enjoy continued growth, you are selling the future, not the past.

When you talk about the company’s medium and long-term prospects to potential buyers, being able to demonstrate that you’ve already made inroads into new geographical markets or new product ranges or services will help strengthen your case. That will take time which again is why you need to develop your exit strategy sooner rather than later.

Equally important is to consider the possible threats to your business which could have an impact on the attractiveness and therefore value of your business. Such threats might include an adverse change in legislation or new and competing technology in your existing markets. You and your management team need to develop a strategy to defend the business against such threats where possible and that again will take time to design and implement.

Your potential buyers will expect at least two years’ of accurate information including monthly management accounts, margin analysis and tax position before they make any sort of offer. They should then conduct extensive due diligence into all aspects of the business in order to identify potential liabilities, risks and management expertise.

Fortunately, you don’t have to do this alone. In fact, it could be an expensive false economy to undertake any of this without first consulting exit planning experts. They can help you to:

  • Explore the exit strategies that will best serve your goals for the business and yourself
  • Evaluate the business’ current value and its key value drivers
  • Compare the business’ current value with the desired sale value (for individual owners this will be the amount of capital you need to underpin your future lifestyle needs)
  • Understand the future prospects for the business
  • Identify who the business will appeal to and why
  • Identify what may make the business unappealing to potential buyers and so restrict or negatively affect exit value
  • Clarify what you and your management team need to do in the short and medium term to improve the key value drivers and minimise the unappealing aspects to potential trade buyers, institutional investors or the existing management team

If you would like to read our exit planning which explains the entire exit planning process and the considerations required of an SME leading up to and during an exit you can do so by clicking here.

If you plan to sell, your team of advisors will also help you find the right buyer, ensure the buyer has the right finance in place to pay for the transaction, optimise your net of tax cash receipt after the sale and help you to plan your new post-sale life.

Planning a profitable exit doesn’t have to cost a fortune and nor does it have to take you away from running your business day to day. A part-time CFO can help with exit planning strategies and advise you on the most suitable route forward. It’s what one of our part-time CFOs did for the original owners of Kiddicare, enabling them to sell to the UK supermarket giant Morrisons for $140 million (at a remarkable 20x profit multiple).

With the right exit planning, you too can realise some significant personal goals, create a retirement nest egg for you and your family and secure your future. But for that to happen, you need to take action today.

To find out how you can take on one of the country’s top CFO, but on a part-time basis, to help get your business into shape in advance of a potential exit you can watch our 3 minute video which explains The CFO Centre service.

Why Every Business Needs a Good CFO

Ask any bank manager who their worst customers are and they will quickly tell you: the people who have no idea what is going on in their business. Some customers ask for finance or expect to maintain an overdraft, yet they cannot even produce up-to-date accounts!

As a business grows, it will need to delegate key tasks to experienced and qualified team members. The areas the business owner will seek help in first will be determined by the focus and needs of the business; either sales, operations, admin or finance might be given priority. If we look at the finance function, it is traditional to break it down into 4 roles:

  1. Finance direction
  2. Finance control
  3. Bookkeeping/basic accounting
  4. Data entry

Many business owners think the finance role is transactional in nature, so they concentrate just on producing accurate accounting records. This is essential, yes, but it’s not enough to manage and develop a growing business. When focusing on the CFO role specifically, what are the key tasks of this role and what does the CFO bring that the other finance roles do not? Why would you need a CFO? We suggest the following 3 main areas of expertise and input:

  1. Strategic – Coordinating and developing long-term business plans; defining implementation timetables; assessing the risks involved and seeking the funding required to deliver the proposed plans.
  2. Operational – Developing internal controls; managing and developing the reports needed to run the business; improving profit levels; managing cash flows.
  3. Support – Tax planning and legal issues; compliance issues; managing external relationships.

The modern CFO needs to be able to develop all this and more. There are also many other considerations that go beyond the pure “job description” above. Here are some of the main ones:

Financial or management accounting: Management accounting looks forward and financial accounting looks backwards. It’s where your business is going that matters as the past cannot be changed.

Experience: It is important that a CFO has a wide range of commercial experience, not just financial. Good CFOs do not learn their skills from textbooks alone; they learn by doing, and yes, sometimes by making mistakes. Commercial experience means leaving the ivory tower and talking to customers and engaging with the production and operations teams.

Qualifications: Although a good accountancy institute qualification is important, it will not stand up by itself without the backing of a strong track record.

Personality: A CFO must be able to communicate at all levels. Communication with peers needs to be collegiate. An effective CFO grows beans and gets team members to count them! A delegating personality is therefore essential.

Full or part-time: It is clear that in an SME environment, there is not always enough to keep an experienced full-time CFO busy. There is an increasing trend towards flexible, part-time CFO services. This helps entrepreneurs keep costs down but at the same time enjoy the benefits of a high-calibre CFO directing the company’s finance function.

Wrapping Up: 5 Key Things to Consider

  1. Do you need a full or part-time CFO?
  2. Make sure the CFO has a commercial mind-set formed from real life rather than textbook experience.
  3. Some experience in general management is useful.
  4. In a business, management accounting experience is more relevant than financial accounting experience.
  5. Remember: the CFO should be involved in all major strategic decisions. Many good businesses fail not through a lack of ideas, but a lack of finance.

CFO Centre is the global number 1 provider of part-time CFOs to SMEs. For more information call us on 1300 447 740.

Operational Skills

How a Strategic CFO can Help to Double your Business in 2016

Despite some analysts’ grim financial forecasts, 2016 can be a year of exponential growth for your business. The key is to think big and to think outside the box.

Instead of making a list of all the ways you can cut back, make a list of all the ways you can increase your revenue tenfold. Once you have done this, narrow it down to the best three.

Now, you will need a plan of action. You will need to identify all of the risk that your plan entails and then find ways of eliminating or mitigating it.

This is where a good, strategic CFO is indispensable. A strategic CFO analyses not only where the money is coming from and where it is going but also where it should be coming from, where it should be going, and how to achieve this.

So how, exactly, will a strategic CFO help double your business in 2016? At the very least, he or she will do the following.

– Identify growth vectors open to your company and ensure that the necessary capital and resources are available to pursue them.

– Ascertain what constraints – financial or otherwise – are holding back your company’s growth and suggest ways of overcoming them.

– Gather information useful for resolving risk and liability uncertainties which are paralysing decision-making.

– Point out areas where your return on spending is not being adequately quantified and recommend more concrete methods for assessing it.

– Highlight potentially disruptive external changes (in competition, technology, industry) and describe what financial measures your business can take to respond and adapt.

– Bring attention to those underperforming areas which are needlessly tying up capital and management resources and should be disposed of.

Most of all, a strategic CFO will not be satisfied with insufficiently ambitious business goals. He or she will be pragmatic but also proactive, viewing finance as more than just a ledger to be balanced but as a tool to be leveraged. A strategic CFO will push you to think bigger, and then bigger still, and then show you how finance can help you get there.

At the CFO Centre, strategically minded CFOs are the only kind we work with. Before you tighten your belt and batten down the hatches for 2016, contact us to find out how investing in a part-time CFO can make this a year of exponential growth for your business.

The Importance of the Modern CFO

In today’s business world, the job of a CFO is not simply to keep track of a company’s cash-flow but also to find ways of improving it. The CFO analyses accounts and contracts, identifies those which are reaping returns, those that could reap better returns and those which should be pruned. In other words, the modern CFO is not just a “bean counter” but a “bean grower,” as well.

Although the CEO may be in charge of drawing up the big picture, a good CFO helps establish its strategic foundation. This is done by providing crucial financial knowledge, advice and experience. A good CFO, for example, may recommend a best mix of products for improved revenue, provide skillful management of invoices and accounts payable to optimize cash-flow or leverage professional connections to open up business opportunities.

How can you determine if someone will be a “bean-growing” CFO? Here are some questions to ask yourself when considering a CFO candidate.

– How much experience – real-life, financial experience – does this person have?

– Has this experience produced industry connections that can be capitalized upon?

– Can this person think strategically and communicate in everyday language? More to the point, can he or she formulate a business plan and explain it to others without relying on complex, financial jargon?

– Does this person truly understand what it takes for a business to succeed?

– And, will this person be a motivated-yet-pleasant team player?

None of this is to say that good old-fashioned bean counting isn’t important or is less important. The skill-set of a good bean counter CFO is an unquestionable prerequisite.

– Does this person have strong financial or accounting qualifications?

– Is he or she a member of a professional accounting body?

– Has he or she served as a CFO before?

Making sure the candidate you choose meets all of these requirements is a daunting task. But it’s exactly the sort of thing we specialize in at the CFO Centre. Every CFO we recruit more than fulfills these key expectations, and we are experts at matching the right people, having the right skill-sets and experience, with the right organizations. Feel free to contact the CFO Centre to see how we can help your organization optimize and enhance its cash-flow for a better bottom line.


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