Your business is changing. And the skills needed for these changes keep shifting.
A business owner or director will not have all the experience and skills a growing company needs for every stage of its development.
Professional advice is always beneficial, whether your business is starting, expanding, growing, or ending. However, it is not always practical, or cost effective, to get this advice for every business decision.
By seeking professional advice from an outsourced entity, you call on their experience of working with many businesses. They’ll have seen first hand what is working, and what is not working, across a wide range of industries.
- How to know when help is needed
- What is a business advisor?
- What is a virtual CFO?
- Which one does my business need?
- How do I choose an advisor or CFO?
- Ready to take your business to the next level?
How to know when help is needed
- Something significant happens. For example, your business needs to upgrade IT systems, you want to plan for retirement, enter a different market, or start exporting your products.
- Skill set is lacking. You or your employees do not have the skill set required to support the growth of your business. And recruiting, or training your employees is not viable or cost-effective.
- Fresh thinking. Your business needs a new pair of eyes, some outside expertise or industry experience to kick start the business. You need some independent advice, someone with a clear mind, away from the everyday tasks that bog you down.
- Achieving your goals. You have some steep mountains to climb and know you need help to achieve them. Perhaps, what you have been doing to date isn’t working.
- Risk assessment. You need to identify and assess the risks with the development of your business.
With the need identified, calling on the right type of professional advice is the next important step. Do you need a business advisor or a virtual CFO?
There are clear distinctions between each expert and the skills & experience they can bring to your business.
What is a business advisor?
A business advisor’s role is to improve the effectiveness and profitability of the business. Looking for ways to either operate more efficiently, increase the customer base, or improve customer service.
They will analyse your business plan and financial statements, and create recommendations based on investments, funding opportunities and marketing. Calling upon best practices and current trends in your industry, and highlighting the risks, if any, associated with their findings.
It is a hands-off role, and the business, not the advisor, is responsible for implementing recommendations. The business advisor may be called upon to reassess how the business is progressing on the recommendations, but the bulk of the plan is handled by the business itself.
Business advisors can be called in for a one off consultation, or play a more active role. Offering advice over a period of time to help the business work through the new recommendations.
What is a virtual CFO?
A virtual CFO, also known as a part time CFO, or CFO on call, functions as a true business partner.
They work closely with your business to plan, strategise, and maximise growth over the short to long term. Regardless of your business’ size or stage of development.
The CFO becomes a part of the executive team, using their key talents, providing a service that is customised to suit your business goals. Some of the key strengths they provide include –
- Creating forward-looking performance strategies, based on your company’s objectives, mindful of future trends over the short, and long-term.
- Overseeing the budgeting process, making guiding decisions on where future cash flow can be spent. And the effect this will have on your business liquidity.
- Calculating financial risks associated with strategic decisions, and ways to control this risk.
- Creating opportunities for future growth and expansion, and communicating this to financial and non-financial stakeholders.
- Results analysis, and preparation of information centred on future cash flow, not on historical net income, for management meetings
- Identifying, understanding and analysing current and future financial trends, their effect on your business & industry, and development of strategies to benefit the business from a practical perspective.
A virtual CFO can work on a single short term project or projects based on the longer term. Their services will be customised to suit your business and budget.
Which one does my business need?
A business usually needs outsourced help when it does not have the skills nor the resources to complete the task.
If your business is wanting to increase its effectiveness and/or profitability, and you have a strong team behind you, you need a business advisor. Your business advisor will recommend a strategy to achieve your goals and your team can work on these strategies to get there.
If your business wants to maximise its growth in the short to long term and does not have the skills nor the expertise to achieve this, then a virtual CFO is what you need.
A virtual CFO will work as part of the business to set a strategy for everyone to work through, rolling up her/his sleeves to make it happen.
How do I choose an advisor or CFO?
As with any service that you contract to work with your business, you must check out their skills and credentials are up to handling the task at hand. Ask yourself these questions:
Do they have good business sense?
Is their own business a success? Excellent business sense is a prerequisite skill for a business advisor.
More than anything else, advisors must be able to tell a company how to make a profit. To do so, they must understand the needs of a company’s client base to advise the company how to meet those needs.
Do they have a good track record in this field? Ask for references and testimonials.
How are their communication skills?
Business advisors and virtual CFOs require good communication skills to discuss, create and maintain client relations.
They need to communicate their findings in a clear, and precise manner, so the business owner and employees can understand, and work together to implement.
Can they spot current financial trends?
One of the biggest skills that a business advisor, or virtual CFO, can bring to your business is their knowledge of current financial trends. These skills are vital in providing advice on new developments and the creation of successful plans.
Are you able to work with this person?
As with any business partner, are you able to work with this person, and do your personalities gel? Are you able to bounce ideas off each other? Do they speak in plain English, and not in business jargon that you don’t understand?
Ready to take your business to the next level?
Still not sure whether you need a business advisor or a part-time CFO? We can help!
Call us at Penguin Management Sydney for an obligation free chat.
Experienced in providing business advisory & CFO services for over twenty years, we can advise you on which is the best fit your business, and the direction you want it to go.