Companies with sales under £5 million or less than 75 employees can seldom justify a full-time Finance Director, sometimes called a Chief Financial Officer or “CFO”.
This doesn’t mean companies don’t want to grow to the next level or face issues that require an expert’s attention.
It’s just that they don’t have a need for top-level talent every day. That is exactly why more and more companies are opting for a part-time CFOs.
Part-time CFOs are cost effective and offer an outside perspective that delivers invaluable strategic insight.
Here’s why your company needs an expert if it is planning to grow to the next stage.
A part time CFO can help to cut out all the “noise” and focus on the key issues that are preventing the company from growing faster or more profitability. The CEO may already have identified some or all of these issues but is not having sufficient time to address them.
If you’re planning to raise finance you’ll need a clear strategy and, equally important, a coherent financial plan. If the financials tell a different story to what the CEO says, or the forecast is more optimistic than investors expect, it can have serious consequences for the business. Our part time CFO will be able to not only prepare a financial plan, but also give advice on what investors are typically concerned about and how to address these concerns.
Before a company appoints a senior finance person, the finance function is often on the periphery when it comes to business decisions. Our part time CFOs ensure that finance is a core consideration and interacts with, for instance, the sales team, product team, marketing team, etc. By doing so, the CEO is able to get a financial perspective that is looking into the future, rather than looking into the past.
Its common for one of our part time CFOs, once familiar with the business, to identify opportunities for strengthening cashflow. This may be non-equity cash injections, such as government grants or tax rebates, or it may be ways in which to improve cashflow, for instance using invoice discounting, debtor management, credit terms negotiation, etc. For a small company, these opportunities can make a significant difference.
The amount of products or services you have to sell to cover your expenses is your break even point. Although break even points are central to a business plan, not many company owners pay attention to it. They don’t understand the formula to calculate at what point they have enough sales to cover their expenses, after which their sales becomes profit. This is best if easily tracked on a shorter term basis, ie. weekly. If a company is not operating at break even, every day that goes by is losing money. This will be one of the first places an interim CFO will want to target.
Michal Szlas, CEO
“Metric have worked with me to help me grow the company to where we are now. They are professional and available to help whenever required. They are also very knowledgeable about the market and have helped me with raising money as well as other corporate matters. As a result, they helped take the Company from turning over £25k a month, to almost a million per month. Helping me raise money which has definitely aided the business growth and which has been greatly appreciated”
The founder of Otty, Michal Szlas, met Metric when the Group was funding its operations organically. Michal knew however that in order to avoid losing market share to its competitors it needed to undertake a funding round to have the ability to finance further growth.
With help from Metric, Michal considered the various funding options available before pressing ahead with a small “seed” round of investment and then, in due course, a larger “Series A” raise.
This has allowed Michal to expand operations, entering the B2B market and overseas markets.
Michal recognises the importance of having a professional advisor that understand high-growth companies:
“Metric have worked with me to help me grow the company to where we are now. They are professional and available to help whenever required. They are also very knowledgeable about the market and have helped me with raising money as well as other corporate matters. As a result, they helped take the Company from turning over £25k a month, to almost a million per month. Helping me raise money which has definitely aided the business growth and which has been greatly appreciated.”
Looking ahead, the Group is entering a new phase of growth, to reflect the demands of a larger management team and shareholder base. This places greater importance on the need for accurate gross profit margin analysis and forecasting, which Metric are helping to develop.
We asked Michal what his advice for other companies would be that are growing rapidly, with all the benefits and potential pitfalls that this brings. Michal said:
“Build strong relationships with the people and companies you think are going to see you through the growth and take your time to perfect the product.”
Wise words indeed.
For many, the tech startup scene is about lifestyle choice and purpose. We feel the same way.
We actively seek to interact and learn from the disruptive community in order to improve the ways in which we help.
We strive to provide quality advice which is good value for money and on fair payment terms.
Because we are specialists, we have developed strong relationships with a range of key players in our sector.
Unlike many accountancy firms, we have the specialist knowledge and experience to provide the tailored advice that your company needs.
We’re confident that our experience of helping Award Winning companies will ensure that you eliminate much of the pain – and costs – associated with operating your technology or high growth company.
In order to find out more and to book your free 45 minute consultation, contact us on 0203 542 4990 or get in touch via our contact us page.