As a business evolves, it will encounter the need to build credibility with outside parties, such as investors and lenders, and to make well-informed strategic decisions. In short, financial...Read more »
How CEO’s of Growing Companies Arm Themselves to be Competitive
In today’s business climate, remaining competitive is more difficult for small and middle market businesses, particularly when they do not have the full suite of executive brain power at their disposal. This is mostly due to critical mass or financial limitations in order to afford these executive positions, or frankly, to keep those executives completely engaged in the business. An opportunity for small and middle market business is to utilize fractional leadership to provide the guidance and experience at a value that matches the budget.
Recently, we discussed this topic with a CEO who successfully leveraged this approach while leading a high-growth technology firm. This CEO engaged with a fractional resource to make sure the organization had the key strategic finance skills to support their growth, and that he had the key advisor needed to make sure the company stayed on the path to success. Some of the CEO’s takeaways were:
- The CEO was able to leverage a high-powered resource, with global experience, even though his company was just entering the middle market in terms of revenue.
- The company was able to build best-in-class processes that maximized profitability and operating performance.
- The CEO had assurance that the company complied with all financial and regulatory standards in the U.S., as well as international markets they were competing in.
- The company was able to build and track against a mid-to-long-term financial plan.
- The company had efficient and effective oversight of its finance and operations employees in the U.S. and abroad.
- The company minimized spending and maximized results when dealing with its outside accounting firms and other advisors.
The truth is, this CEO needed everything that an experienced CFO brought to the table to assist in running the company effectively and taking it to the next level, but hiring a full-time CFO with the right qualifications wasn’t economically feasible. The company had an excellent operations and accounting staff, but Fahrenheit’s fractional CFO provided the leadership, structure, advice, and drive to make the company and staff much better.
Now, you might be thinking “my situation is unique.” Or, what we hear more commonly, “I have a great accountant/office manager/controller/bookkeeper, etc.” that handles this “stuff.” Maybe your business isn’t that complicated, and the stakes aren’t quite as high. But, we have yet to run into an entrepreneur, CEO, or investor that isn’t interested in an eventual successful exit. And, that takes talent. Things to consider:
- Do you have a growth strategy clearing defined?
- Do you have a 3-5 year financial plan?
- Are your employees getting proper guidance and mentoring from management?
- Do you have appropriate compensation models for key jobs across your company?
- Do you comply with appropriate accounting standards?
- Do you operate in multiple states with differing tax and regulatory codes?
- Are your financial systems appropriate for your size of company?
- Should your firm undergo an annual review or audit? How do you prepare for and manage a review/audit?
- Have you selected, and do you know, how to work with outside accounting firms and other advisors?
- Do you need to prepare for, and manage, a fundraising, financing, or M&A transaction in 12 to 24 months?
To be competitive today, organizations need leaders that understand the current market conditions (competition, consumer needs, new technology, etc.). The CEO should be living in the world of tomorrow to identify the upcoming opportunities to grow the business, and he/she needs to be supported by a team who helps drive that vision. Living in today is reporting history. Fahrenheit brings experience-based, C-Suite thinking to businesses structured in a way that makes sense. Our consultants – who have led fast-growing and profitable organizations, raised capital, and exited businesses – arm leadership teams with the strategy, knowledge, and expertise to inform decision-making and drive value.