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vCFO: The road to business growth

As Virtual CFOs (vCFO) we speak to a lot of businesses who are looking to grow. In fact, most businesses we speak to want to grow (and we love to help them) and if you are reading this you probably want your business to grow too.

Growth is seductive and as soon as you start talking about growth you start thinking about financing, investors, capital expenditure, new team members....

But is your strategy right?

Are you going in a direction that will maximise your potential and supercharge your growth?

A good growth strategy comes from a position of knowledge, both financial and non financial and

without this knowledge you are leaving a lot to chance.

On our financial road map (shown below) the growth strategy for a business is the final stage of a successful finance function; everything is put in place to support this future growth.

One of the jobs of a Virtual CFO (or any CFO for that matter) is to get a clear view of the business performance to support and monitor growth strategies. If you are making decisions when you've only got to stage 1 down the road you are going to make mistakes.

So what are the benefits of having your numbers in order?

  • no surprises: you can see what is happening with cash, freeing up time to concentrate on the business

  • identify problems: spot if there are areas of the business that need to be fixed or optimised

  • understand your resources: cash / staff / production hours. Your business resources are key advantages / limiting factors when considering growth

  • see the opportunities: understand what your business is doing well. What makes you money and has scope for expansion.

  • show external parties a clear view: do you need investment or financing to achieve your growth. With your numbers in order you are more likely to be able to raise funds (and have a good idea of how much you need to raise).

But does this actually matter? Plenty of businesses grow without all their numbers neat and tidy, don't they?

They do, but did they miss out on a bigger opportunity? Or has it taken the business in a direction they didn't want to go? And not to mention the businesses that fail due to lack of cash, or the growth plans never launched as the bank won't lend the business money due to lack of financials.

The decisions you come up with could be very different if you have full information compared to very little. For instance:

Your company sells two products. You can up production and add to the sales team on one, which one should it be? One product has a better profit margin, but the other product has a larger potential market. What about the potential capex costs of both options? And for one product line the customer satisfaction as been falling over the last three months. If you have the right information, you are in the position to make a great decision.

So before you throw yourself behind your growth strategy make sure you have had a good look at the financial road map and you've got all the information you need at your finger tips.

If you need any help with any of the above, let us know or if you want to find out a bit more about what a vCFO can do for you, check out this article here.

We'll be following up on the above road map in the next few weeks, giving more detail on how to achieve each step.


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