business growth Archives - The CFO Centre Australia

Navigating Your Business Growth Journey: Where Does Your Company Stand?

January 15, 2024 by lauramills

As the business landscape constantly evolves, understanding where your company stands on its business growth journey is crucial for shaping future strategies. In a recent business survey, we asked 264 participants to assess their business’s growth stage. The results provide valuable insights into the diverse stages businesses find themselves in. Let’s delve into these findings and explore the implications for businesses at various growth stages.

Scaling: The Power of Momentum (54%)

With over half of the respondents indicating their businesses are currently scaling, it’s evident that many companies are experiencing significant growth and expansion. Scaling is an exciting phase that requires careful planning, resource allocation, and strategic decision-making. It’s essential for businesses in this stage to maintain their momentum while effectively managing risks and seizing new opportunities.

Insight: Scaling businesses should focus on streamlining operations, investing in scalable technologies, nurturing their workforce, and building strong customer relationships to sustain their growth trajectory. The CFO Centre can help by adding an experienced part-time CFO (Chief Financial Officer) resource to your team to help you plan and implement the right strategy for your growth goals.

Market Leaders: Maintaining the Edge (18%)

Being a market leader is an accomplishment that comes with its own set of challenges. These businesses have successfully carved out a substantial share in their respective industries. However, complacency can be detrimental. Market leaders must continuously innovate, adapt to changing market dynamics, and stay ahead of the competition while nurturing their existing customer base.

Insight: Market leaders should embrace a culture of innovation, invest in research and development, explore new markets, and consistently deliver exceptional customer experiences to maintain their edge in an ever-evolving business environment. Our part-time CFOs could be the edge you need to set you apart from your competitors – find out how.

Early Stage: Nurturing Potential (15%)

A significant number of respondents identified their businesses as being in the early stage. This stage is characterised by laying the groundwork for future growth. Early-stage businesses need to focus on refining their business models, building a strong foundation, attracting talent, securing funding, and establishing a solid customer base.

Insight: Early-stage businesses should prioritise market research, develop a compelling value proposition, build strategic partnerships, and leverage digital marketing tools to establish a strong foothold in their target markets.

Preparing for Exit: Strategic Transitions (9%)

Some businesses indicated that they were preparing for an exit. This stage involves strategic decision-making regarding potential mergers, acquisitions, or divestments. It requires careful planning, financial analysis, and alignment with long-term objectives to ensure a smooth transition.

Insight: Businesses preparing for exit should seek expert advice, conduct comprehensive due diligence, optimise their financials to ensure the best possible price, and identify potential buyers or investors who align with their strategic vision. The CFO Centre has helped countless businesses plan and execute profitable and smooth exits for our clients. Hear from one of them here.

Conclusion:

Understanding where your business sits on its growth journey is crucial for making informed decisions and charting a path towards success. Whether you are scaling, a market leader, in the early stage, or preparing for exit, each growth stage presents unique opportunities and challenges. To gain deeper insights into your business’s growth journey, consider taking the Scale-up & Exit Business Assessment™ by The CFO Centre. Or contact us on 1300 447 740 to find out how we could add significant value to your business.

How Do You Know If You Have A Successful Business?

November 20, 2023 by lauramills

There are so many definitions of a successful business. For example, Google’s definition of a successful business is: “Success is running a profitable firm that conducts business with honesty and integrity, makes meaningful contributions to the communities it serves and nurtures high-quality, balanced lives for its employees”.

Business owners need to dig deeper than this definition. They need to understand their why, and where they want the business to be in the future. My suggestion to business owners is to start with the below to assist in identifying their path.

Define your Strategy

Business Strategy is the small choices you make every day that will lead your business to success. The phrase “strategic focus” can help you to understand the things that you do to run your business.

You need to make sure that your business strategy is not based on guesswork. You need to know where your business is heading. It’s like a journey, almost like a lifetime achievement.

Define Your Mission Statement

Every business needs to have a mission statement or vision statement that explains what your company is all about. This mission statement will help define your company’s direction, focus and actions. Defining a mission statement is perhaps one of the most important things you can do to understand the direction of your business.

Define Your Business Goals

You must have clear goals for all aspects of your business, including Personal Development Goals, Career Development Goals, Sales & Marketing Goals and Financial Goals. These goals should be in line with your strategy.

Some of the questions the business owner needs to ask are:

How does your business add value for its customers?

How can your business best serve its customers?

What is unique about your business model?

Do you know the strengths and weaknesses of your business model?

What opportunities does your business have in the market space in which it operates?

How will you successfully leverage these opportunities in a way that will lead to a high growth rate?

Which elements of your business model must be refined or improved to help achieve the above goals? And what is the plan for executing that plan?

Defining the Strategy, mission and goals allows the business owner to create Key Performance Indicators (KPI’s) that align with the goals and help guide the business to their overall strategy. These KPIs will be the basis of developing the systems and processes that will maximise your success.

Once you have a clear strategy, you should share this with all relevant team members so that everyone is clear on the direction of the company. Then conduct a monthly review to re-evaluate your strategy against current market conditions and business developments. This will ensure that your plan is still going in the right direction by measuring your strategy against the KPI’s that you have set to create a successful business.

Take action

I can hear you saying that you don’t have time to do this and that this will take you away from day-to-day business. This is where you need to lean on your CFO (Chief Financial Officer). This is what we do best and can help lead the way. The CFO Centre has been assisting SMEs for 22 years, offering highly experienced Chief Financial Officers on a flexible, part-time basis. As CFOs we are qualified CPAs or CAs with extensive commercial experience across multiple sectors, so we know what to look for and how to respond to any challenge. Call 1300 447 740 or contact us to find out more.

Written by Elechia Jones, Regional Director – The CFO Centre

Photo by Anna Shvets from Pexels

Do You Have The Capabilities And Capacity For Scaling Your Business?

September 20, 2023 by lauramills

Scaling your business

Scaling your business depends on two factors: your company’s capability and its capacity to deal with growth.

To scale up your business, your company must be capable of dealing with a growing amount of work or sales and of doing it cost-effectively.

You need to know that your company can achieve exponential growth without costs rising uncontrollably as a result. It’s vital too, that performance doesn’t suffer as your company scales up.

You also need to be sure that your business systems, employees, and infrastructure can accommodate growth. For instance, if you get a sudden surge in orders, will your company be able to cope? Will you be still able to manufacture and deliver products or services on time? Do you have enough employees to deal with a surge in work or sales?

Scaling a business requires careful planning and some funding. To be successful, you’ll need to have the right systems, processes, technology, staff, finance, and even partners in place.

1. Identify process gaps

Audit your business processes (core processes, support processes, and management processes) to find their strengths and weaknesses. Find the process gaps and address them before you start to scale up.

Keep the processes simple and straightforward. Complex processes slow things down and hinder progress.

2. Boost sales

Decide what your company needs to do to increase sales. How many new customers will you need to meet your scaled-up goals?

Create a sales growth forecast that details the number of new clients you need, the orders, and the revenue you want to generate.

Examine your existing sales structure and decide if it can generate more sales. Can you increase your flow of leads? Do you need to offer different products or services? Is there an untapped market? Do you have a marketing system to track and manage leads? Is your sales team capable of following up and closing more leads?

Make sure you have enough staff to cope with an increase in sales. If you don’t have enough staff, consider hiring new employees, outsourcing tasks, or finding partners that may be able to handle functions more efficiently than your company.

3. Forecast costs

Once you’ve done the sales growth forecast, create an expense forecast that includes the new technology, employees, infrastructure and systems you’ll need to be able to handle the new sales orders. The more detailed your cost estimates, the more realistic your plan will be for scaling your business.

4. Get funding

If you need to hire more staff, install new technology, add facilities or equipment, and create new reporting systems, you’ll need funds. Consider how you will fund the company’s growth.

5. Make delighting customers a priority

To reach your sales forecasts, your company will need loyal customers. You’ll win their loyalty by delivering outstanding products or services and customer service every time you interact with them.

6. Invest in technology

Invest in technology that will automate tasks. Automation will bring costs down and make production more efficient.

Ensure that your systems are integrated and work smoothly together.

7. Risk management

Every growth opportunity comes with inherent risks. You should identify potential financial pitfalls, ensuring that the company takes calculated risks. Evaluating contracts, overseeing compliance, managing debts, and setting up internal controls help to safeguard assets.

8. Ask for help

Don’t be afraid to ask for help from experts who have experience in scaling up companies. In an interview, Apple’s co-founder, Steve Jobs, said, “I’ve never found anybody who didn’t want to help me when I’ve asked them for help. – I just asked.”

A solid strategic plan is also essential when scaling your business to align your financial goals with the operational objectives. Failing to plan is planning to fail.

In today’s dynamic business environment, scaling a business requires more than just a great idea or product; it demands strategic financial oversight. For many small and medium-sized enterprises (SMEs), the expense of a full-time Chief Financial Officer (CFO) can be prohibitive. Enter the part-time CFO, an innovative solution to meet this challenge.

How To Achieve Revenue Growth x 10 – And Survive Scale Up

September 11, 2023 by lauramills

Revenue Growth

When it comes to revenue growth, our Chairman Colin Mills says the best advice he ever received for doubling the size of a business starts with making a list.

List the top 20 actions that could increase your revenue x 10

Identify the top 3 options

Concentrate on those 3 for the next year

So let’s say you’re a $4million business. Spend a few hours listing out the 20 things you could do to turn this into a $40million business over the next 12 months. This will force you to think outside the box and away from small incremental changes you can make.

I suggest you then spend another hour or so considering the Top 3 activities. These will be the activities that are most likely to get you towards your goal of $40m.

You then have the top 3 activities to focus on over the next 12 months that may well enable you to double your turnover.

For each of those top 3 activities, develop clear action plans on how you are going to achieve results.

That, he says, is how you achieve significant growth – if you set out clear, realistic plans for each of your top three, working with your management team. And make sure you identify and mitigate any risks.

But scaling up brings its own challenges

It’s great seeing your revenue rise but fast growth sometimes gives you growing pains. We wrote a blog about the 6 basics you need to have sorted to grow a company successfully, which are:

A clear, well-thought-out vision shared with everyone
Goals that translate into growth strategies
Top-performing talent, either employees or outsourced
Systems for attracting and retaining good clients
An understanding of the hazards when you scale too fast
A strong focus! Backed by objective advice from an expert

A part-time CFO might well be that expert for you. We helped Bellrock Broking identify their key success factors and get everyone on the same page, feeling motivated to achieve those objectives.

As Managing Director Mark Chiarella told us in his video testimonial “I feel organised and [confident] that the priorities of the business are in order.”

Not to forget, the 2 Cs!

On top of those 6 basics, there are two more we need to mention.

Your company’s capability and capacity to deal with revenue growth.

If workloads go up, orders go up and costs go up, will your business systems, technology, infrastructure and people cope? Can you still deliver on time? Will performance suffer? This blog goes into more detail.

It’s likely you’ll need to do some planning and organise some funding to get your ducks in a row. Our client, music reporting specialists Soundmouse, had a serious growth spurt over one year. One of our CFOs helped them raise money so they could be more comfortable in that rapid growth.

“Knowing the numbers helps everything. It builds confidence, happiness – and as a result, more money,” says Soundmouse founder Kirk Zavieh.

That’s a lot to take in.

You’re right, it is a lot. And it requires some objective thinking.

One of the toughest challenges for owners of SMEs especially is to be able to stand back, look at your business through a wide-angle lens and identify what it is you really have. Especially when you’re being distracted by the day-to-day of your business.

That’s why there’s real benefit in using a qualified CFO as a sounding board, whether they’re an internal hire or a part-time resource from CFO Centre. They can help you make better decisions, take advantage of golden opportunities – and turn revenue growth dreams into plans.

Contact The CFO Centre about a free 60-minute discovery session. Or head to the website for more tips.

Image from Venteezy.com <a href=”https://www.vecteezy.com/free-photos”>Free Stock photos by Vecteezy</a>

Plan For Profitable Growth in 7 Easy Steps

November 21, 2022 by lauramills

Planning for growth is something every business owner will say they do. However, not all business owners will do this effectively and with a focus that will generate profitable growth.

Many businesses plan for growth, but not profitable growth. Some businesses focus on growing sales without a focus on margins while others build infrastructures to support sales and growth that never materialize.

Michael Porter said, “If your goal is anything but profitability – if it’s to be big, or to grow fast, or to become a technology leader – you’ll hit problems.”

A business must focus on profitable, scalable and sustainable activities if it is to grow. Profit and the generation of cash to re-invest in your business must be made a priority. It’s an essential part of the financial strategy and structure of a successful business. Profit and a clear business plan will create a focus and the alignment of the organization. Additionally, it’ll attract investors and other sources of funds to fuel growth – all of which impacts the underlying business value of the business.

CFO Centre has identified:

7 Keys to Profitable Growth:

Define your business goals & objectives
Produce a formal plan from which you can articulate a vision
Critically review your business
Identify competitive advantage, scalability & sustainability
Establish a financial plan
Identify milestones, KPIs & dashboards
Create organisational alignment
Nurture your culture, hire the right people and communicate the vision
Identify the financial resources required
Support the business with systems & processes to optimize performance
Measure, review, evaluate & course correct
Be proactive & prepared to be reactive

If you follow these 7 Keys and plan for profitable growth, you will ultimately:

Improve and grow profits
Maximise the scalability of your business
Enhance management team and organizational structure
Attract investors and other sources of funds
Increase business value

To enhance the value of your business and grow successfully, follow the 7 Keys and Plan for Profitable Growth.

17 Reasons Why You Need a CFO To Help You Exit

July 4, 2022 by lauramills

The CFO Centre will provide you with a highly experienced senior CFO (Chief Financial Officer) with ‘big business experience’ for a fraction of the cost of a full-time CFO.

This means you will have:

One of Australia’s leading CFOs, working with you on a part-time basis
A local support team of CFOs, plus
A national and international collaborative team of over 750 CFOs sharing best practice (the power of hundreds)
Access to our national and international network of clients and partners

With all that support and expertise at your fingertips, you will achieve better results, faster. It means you’ll have more confidence and clarity when it comes to decision-making. After all, you’ll have access to expert help and advice whenever you need it.

In particular, your part-time CFO will help you to ensure that your business has planned and prepared for an exit. The sale process would be managed efficiently to minimise challenges on price, and prevent advisors’ fees from absorbing too much of the sale price.

For example, your CFO will:

Help you to implement your strategy for growth and exit
Identify where value can be maximised and eliminate unprofitable or low profit activities
Ensure that shareholders’ interests are protected through a shareholders’ agreement
Explain what incentive arrangements are available for key management and introduce them. These could include bonus plans aligned to the business objectives or option plans
Ensure that property is held in the most appropriate manner for the business and any potential acquirer, freehold or leasehold, length of tenancy
Review pension arrangements to identify any funding or future liability issues
Review contracts and trading terms to ensure they are in place, up to date and enforced
Identify risks to the business from suppliers and customers on whom the business may have become reliant and plan to spread the risk
Improve the accuracy and timeliness of management information
Introduce systems and controls to increase confidence in the integrity of the accounting information
Improve and/or introduce forecasting processes and procedures so that budgets and forecasts can be used as dynamic planning tools
Identify means of improving margins and reducing overheads to improve profitability
Ensure compliance with PAYG, Superannuation, GST, Income Tax and Company Tax legislation while seeking ways to reduce the overall tax burden to you and your business
Introduce you to corporate finance, legal and other advisers to help with all aspects of the exit preparation and process
Project manage the exit process internally so that it minimises the disruption to other staff and their continuing responsibilities
Create confidence in the acquirer and their advisers so that they have limited opportunity to attempt to negotiate the price down or increase warranties from you
Help you achieve the freedom you want after the efforts that you have invested in growing business

How much better would you feel when you engage a top calibre CFO to work with you on your exit/succession? Get in touch with us today – 1300 447 740

Photo by fauxels

Where Will Your Business Be in 1 Year From Now?

May 17, 2022 by lauramills

If you want your business to achieve high ambitious turnover growth of at least 20% year on year, you need a business scaling strategy that incorporates a strong vision and a solid business plan.

Helping your small business to grow, to achieve a sustained growth, will involve careful planning and most likely involve taking calculated risks.

You need to think about what you want to achieve. Where do you want to be 1 year from now? You won’t find that easy unless you know your target market and your customers thoroughly, have products and services they’re keen to buy and be aware of the expenses you’re likely to face.

Managing Growth

To manage your company’s growth, it’s critical that you refer often to your business plan and keep an eye on the business’ key metrics, benchmarks and timelines.

You need to make sure that people have actionable activities; things that they can do and which can be measured.

As well as having repeatable processes and measuring your progress on a day-to-day basis, it’s crucial to be able and willing to adapt and be flexible if things change.

Knowing all your Numbers

Besides monitoring KPIs for turnover, gross profit percentage and salaries, it’s also important to establish KPIs for your profit per product and customer profitability.

You need to know whether you’re doing more business with each of your customers than you were doing the previous year, for example. That’s more important than focusing on going out and winning new customers.

Equally important is being aware of your balance sheet.

Other important KPIs are those that relate to your customer conversion rates, your sales profitability, and your working capital

Funding Growth

You also need to have a clear understanding of what’s achievable both in the short and long-term.

At some point, you’re likely to need to invest in the company to achieve the revenue growth and scale your business the way you want.

That might be to cover the cost of hiring of more team members, the training of your existing employees and their retention, or the development of new product lines or services to boost sales.

Like some companies, you might need additional funding to be able to hire in external experts such as the CFO Centre’s part-time CFOs to fill the personnel gaps within the company as it scales up.

You will also have to decide how you will fund the additional resources you need to sustain your growth.

Companies that enjoy strong growth are prepared to employ the right people and to raise the money they need. Sometimes they have even personally guaranteed the loans they’ve taken out on the company’s behalf.

They’re taking well planned, well considered risks.

The more risk-averse often shy away from offering personal guarantees on loans or embarking on mergers and acquisitions that would help to fuel their rapid growth.

Invariably however you do need to borrow money to achieve growth.

Merger/Acquisition Growth

One of the fastest ways to scale your business is to merge with or acquire another business in your market. Or, in the case of retail or hotel/restaurant companies, open new branches in different locations. It could also involve forming a joint venture partnership.

You need to ensure there are alignment and support for the from all the company’s stakeholders. Including customers, senior management, non-executive directors, potential joint venture or merger partners. And your banks and other finance institutions, your accountants, and your immediate team.

The benefits of choosing the right target company for your merger or acquisition can mean your market share and assets increase.

Your new staff may have more expertise and skills than your existing employees.

The merger or acquisition may make it easier to obtain capital if or when you need it.

But this kind of inorganic growth can be problematic. The purchase price for the acquisition can be prohibitive while restructuring charges can increase expenses. It takes time to benefit from the knowledge or technology your company has acquired through the merger or acquisition.

You may find you need to recruit more managers to cope with the increased workforce.

The business may move in a direction you never anticipated. Or the new company may grow too quickly which puts it at greater risk.

Often, the combination of organic and inorganic growth gives you the best outcome. Your company can diversify its revenue base without having to rely purely on current operations to grow your market share.

Three tips to scale your business

Be open minded about taking on investment. Scaling your business will be hard work and you need to find a way to do it without running out of cash.
Conduct market research to ensure people want to buy what you’re offering. It’s got to interest and excite them so much they’re willing to hand over cash for it.
Reward your employees and make sure they understand and are engaged with your vision for the business. You’ve got to bring them on the journey.

Contact us now if you want to learn how a part-time CFO (Chief Financial Officer) can help you to implement the best business growth strategy.

How to Outsmart Your Competitors with a Business Plan

May 17, 2022 by lauramills

Most business owners know that without a comprehensive, up-to-date business plan and an implementation timetable, they may be missing out on opportunities for growth and not realising their full potential. However, around 30% of SMEs don’t have one. To ensure you’re ahead of your competitors, it’s imperative to find the time and/or resources to create and implement a plan for the start of the new financial year.

A formal plan can be an extremely valuable tool for managing and growing a business. It allows a company to recognize its strengths and weaknesses. Furthermore, research has shown that SMEs that have a business plan in place are consistently more profitable than those who don’t.

A Formal Plan

Planning is the key to the success of any business, no matter its size or age. Yet many SMEs don’t have a plan. The majority of those without such a plan say they don’t believe it’s necessary or that they keep their plans in their head.

It’s concerning that so many small and medium-sized businesses don’t have a formal business plan. Without clear direction, they may be missing out on opportunities for growth and not realizing their full potential. A plan is invaluable and should see out the company’s:

Strategic direction
Main operating and financial targets;
Actions it will take to achieve those targets,
New initiatives and investments planned;
And their impact on the company’s performance

Creation and Implementation

Creating a well thought-through, comprehensive business plan is an arduous task. Thinking through objectives and likely outcomes which may occur many years down the line is challenging. But it is the hard work up front which makes for lighter work down the road as all of our team of part-time CFOs will attest to.

Most CEOs and business owners simply don’t have the time to spend on quality strategic thinking or to document and communicate that thinking in a way which allows the whole business to buy into the vision.

Harder still is managing and implementing the business plan. Significant strategic course corrections are commonplace in fast-growing companies. These should be embraced. The tricky part though is in managing regular change. That requires a combination of time and specialist knowledge.

There is an art and science to effective business planning and getting it right brings a real sense of clarity and direction to business – this is where an experienced part-time CFO can make a significant contribution.

Not spending quality time on strategic planning usually leads to a chaotic working environment. Our clients often talk about ‘not feeling in control’ and ‘not really knowing what is coming around the next corner’.

Proper business planning is very liberating for the business owner, whatever their objective might be. A well-constructed and regularly reviewed business plan will instil real confidence that the goal is indeed achievable.

Key Benefits

Writing a business plan has many benefits for businesses of any size and in any industry. It can help owners and senior managers to:

Clarify objectives and develop suitable strategies.
Understand the market.
Identify and overcome internal and external threats
Organise the company
Access external funding

Key Elements

The most important part of your business plan is its financial information. Your financial forecasts should include your cash flow predictions for the next 12 months or more. You’ll also need to include sales estimates and costs to ensure the business has enough working capital or to ensure you understand any needs to arrange additional financing.

You need to explain all assumptions in the business plan, with best and worst case scenarios. Detail the risks you’re likely to face and how they will be dealt with.

Conclusion

An up-to-date business plan or ‘roadmap’ in your business will allow you to experience a sense of control, which may have been absent since the day you started your company.
The business plan will remove a significant amount of confusion from your operating procedures. There will always be challenges contained within new projects but you will have a proper framework against which all decision-making can take place.
The plan provides the blueprint for delegating responsibility to your team and allows you to create some space in your own environment to work on growing your business.
You will move out of the chaos and into a more serene working environment where each of the gears, which make up the bigger system, is able to move in harmony.
Potential hazards will have been identified in advance and dealt with before they become unmanageable. You will be able to move from a culture of fire-fighting to a culture of fire-prevention and the benefits will be felt by each member of your team and most probably by your customers too.
A part-time CFO can assist with creating, implementing and reviewing your Business Plan, as well as be a constant guide and sounding board for you.

Scaling: The Power of Momentum (54%)

Market Leaders: Maintaining the Edge (18%)

Early Stage: Nurturing Potential (15%)

Preparing for Exit: Strategic Transitions (9%)