As your business grows, it might be the right time to bring on board the skills of a Chief Financial Officer. But what are the things you should be looking for? How will you know if they are a right fit for your business and understand the direction you are wanting to take?
Charles Fairlie, founder and publisher of 50 Unsung Business Heroes, has met with hundreds of business owners and discussed the secrets of their success – including what makes a business run smoothly and the essential attributes of key team members such as a CFO:
1. Honest and trustworthy
It goes without saying that all small business owners should hire people they trust, but it is of even greater importance when they are responsible for the business’s finances. Working with an experienced person who has a passion and desire to take your business to the next level is critical, and the ability to help grow a business through its various phases.
Take the time to get to know your CFO and their motivations to help build a solid relationship and mutual trust. “Even though we say ‘B2B’ and ‘B2C’, it’s really ‘H2H’ – human to human – that personal knowledge of each other’s motivations and trust between two people. You can really only find that out by sitting down and getting to know them,” says Fairlie.
A great CFO will be proactive – they’ll be able to take your strategic plan and identify gaps and potential options to strengthen your business. Their ability to discuss each potential option, provide a rationale for each option and align it to your business goals is priceless and will ensure your business is on the path to success.
There are many examples of industries that have changed significantly over short periods of time, due to competitors or disruptive technology, that have impacted on business. A CFO should be nimble and aware of potential industry changes – keeping a finger on the pulse – and understand the vulnerabilities or risks that impact your operations. Fairlie uses the examples of Aldi and Uber gaining traction in the Australian market: “If you were a CFO for the Cabcharge taxi business you really would have been slammed… you need to be across even being blindsided by an overseas company coming in. It’s about having a level of proactivity to be able to see how various outcomes can affect your business strategy and to create a contingency plan.”
All businesses experience periods of feast or famine, and a resourceful CFO will understand and anticipate these times. Not only will they be across the various cycles of your business – perhaps seasonal peaks, periods of growth or the arrival of a new competitor – understanding the impact on the bottom line and finding solutions based on the resources and staff available is key.
A strong handle on your business cashflow is fundamental, but what’s even more important? Being able to communicate this data to key stakeholders within your business, such as your sales team, on a regular basis to ensure everyone is on the same page.
As a business owner, it can often be difficult to take a step back from being involved in every aspect of your business. However, finding the right people – including a great CFO – can bring expertise into your business, support you to reach your financial goals and take your business to the next level.