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The idea of hiring even a part-time FD may seem to some SMEs a bit OTT—like paying Quentin Tarantino to make a 90-second home page video or booking Wembley Stadium for the company’s five-a-side friendly football match.

But for companies whose ambition is to get into and survive the coveted scale-up phase, hiring a part-time FD makes perfect sense. They know that they’re getting a finance veteran, someone with big business experience, who can provide the guidance they need to grow rapidly and help them to avoid the costly mistakes that so many ambitious SMEs make as they attempt to move into the Big League.

As Colin Mills, the Chairman of the FD Centre, said in his book about scale-ups, “The reality is that there is great value in having someone from the next level if you’re aspiring to get there.”[1]

Companies who hire part-time FDs understand that today’s FDs are capable of delivering far more than bookkeeping or accounting services. They provide advice and analysis and implement practices and processes. They can work with your board of directors and external stakeholders such as your bank or investors. They can also advise you on mergers and acquisitions. Besides strategic analysis, they can provide advisory support on everything finance-related in your business.

Their responsibilities might cover business planning, capital structure, risk management, auditing and reporting, tax planning, capital expenditure, investor communication, R&D investment, working capital management and company budgeting.

Companies that don’t hire FDs are often unaware of the opportunities and profits they’re missing out on. When asked why so many SMEs don’t hire FDs, Matthew Bud, Chairman of the international Financial Executives Networking Group, said business owners are either unaware of their need for a FD or reluctant to spend the money.[2]

“What many entrepreneurs don’t realise is that they’re already spending that money in lost profits and misspending,” he told Inc.

“They’re not seeing the dynamics of the business from an educated financial point of view. You can’t always go with your gut in making financial decisions, which is what a lot of entrepreneurs try to do.”

So, what can you expect from a part-time FD?

Well, the role a part-time FD will play in your company will depend on factors such as the size of your business, your expectations, your industry, and your corporate strategy and business goals. But a good FD will work on your company’s finance strategy and finance operations and manage areas such as compliance, tax planning and legals, outsourcing and banking relationships.

To achieve success in these different roles, a FD will need outstanding hard and soft skills.

If you’re a CEO, the FD will be your strategic partner, providing financial insight and strategy and helping you to improve profitability and cash flow.

A good FD won’t, however, be a ‘Yes’ person, someone who rubber-stamps every initiative without due diligence.

Charles Holley, CFO-in-residence at Deloitte and former Walmart CFO, says good FDs are independent-minded yet supportive of their CEO.[3]

“My CEOs counted on me to be the truth teller, to form my own opinions on important company decisions and to speak up. At the same time, they expected my support for execution.”

Great FDs challenge the business, he says. They point out problems and propose possible solutions to “spark the debate”.

“FDs are in the best position to call attention when the numbers aren’t supporting the strategy. For example, FDs can push the business to change capex priorities when the underlying ROI assumptions are no longer supported by the numbers.”

Besides being a trusted advisor and sounding board, a good FD will help to raise efficiencies, identify opportunities, manage risk management, and manage capital structure.

Since they speak the language of financiers and understand what they are really interested in, FDs can also liaise with financial institutions, investors, and auditors on your behalf.

In other words, a part-time FD/CFO can help you to manage the transition into the scale-up phase more smoothly and ensure you reach your growth targets sooner.

How it works in practice

The CFO Centre’s part-time FDs use a proven framework known as the ’12 Boxes’ to identify where the problems are within any business. They use it to review every aspect of your company finance function and identify every problem area.

They will help you to understand your company’s finances; eliminate cash flow problems; identify cost-savings, and improve profits.

They can also help you and your team to understand your main profit drivers; find and arrange funding; identify your Critical Success Factors and Key Performance Indicators (KPIs), help you to expand nationally and internationally; and build value to make your business more attractive to investors or buyers.

To discover more about the 12 Boxes, click here.

Need help?

To discover how an FD Centre part-time FD will help your business, contact us now on 0808 164 8902. To book your free one-to-one call with one of our part-time FDs, click  here.  You can see how they add rocket fuel to any business here.

To hear what people really think about the FD Centre’s part-time FDs, watch these short videos here.

Uncover strengths and weaknesses

Identify the strengths and gaps in your business in just nine minutes with the F-Score.

Just answer a brief series of questions, and you’ll receive an 8-page report that will reveal potential current or future pain points for your business. It will also help you to rate the performance of your finance function and uncover untapped opportunities for growth. Click here now to take the F-Score.

Got a Big Question?

If you have a burning question for one of our team of FD ask it here, and you’ll get an answer within 24 hours. Please note the question must be finance-related (sadly they can’t give horse-racing or fashion tips or relationship advice).

[1] ‘Scale Up: How to Take Your Business to the Next Level Without Losing Control and Running Out of Cash’, Mills, Colin, Brightflame Books, 2016

[2] ‘Here’s When, Why and How to Hire a CFO (And Yes, You Can Afford It)’, Tabaka, Marla, Inc., www.inc.com, June 27, 2016

[3] ‘What CEOs want—and need—from their CFOs’, Holley, Charles, Deloitte, www2.deloitte.com

You might think a Finance Director’s role is confined to traditional finance activities, but today’s FD (or CFO) can do so much more than count beans.

In the past, an FD’s responsibilities might have been confined to high-level accounting such as providing timely financial statements and monthly management reports, managing investments and expenses, monitoring cash flow, and managing risk. But as the business landscape has become more complex over the past decade, the role of an FD has changed.

That change is due to factors such as the global financial crisis—the biggest since the Great Depression of the 1930s, disrupted and volatile markets, the rise of big data, and the impact of digital and social media.

As a result, CEOs and their Boards expect so much more from CFOs, according to a KPMG report.[1]

“CEOs are increasingly looking to their finance leaders to help drive wider business strategies,” says Simon Dergel, author of ‘Guide to CFO Success’. [2]

They expect FDs to make decisions and shape their plans based on the company’s ambitions, he says. As the keeper of the company’s data with an understanding of every department’s objectives and performance, they can play an active role in refining and aligning business strategies.

“Perhaps the biggest change in terms of the CFO’s role in business today is that their advice is not only valued—it is necessary,” says Dergel.

“Businesses are currently dealing with a wave of disruptive competitors and fast-changing customer expectations, while also managing a global talent shortage and volatile financial conditions. The wisdom and experience of finance leaders make them indispensable in the boardroom as companies look to tackle one of the most uncertain economic periods in decades.”

Most importantly, CFOs are delivering on these expectations. The new breed of FDs is now much more forward-looking. They wear three ‘hats’ at any given time: financial expert, active management team member, and leader of the finance function.

Given the opportunity, they can perform multiple roles within a company, working both on and in the business. Not only can they direct financial performance and protect the financial integrity of the company but they can also drive strategy.

This is borne out by James Riley, the Group Finance Director and Executive Director of Jardine Matheson Holdings Ltd., who says, “A good CFO should be at the elbow of the CEO, ready to support and challenge him/her in leading the business.

“The CFO should, above all, be a good communicator—to the board on the performance of the business and the issues it is facing; to his/her peers in getting across key information and concepts to facilitate discussion and decision making; and to subordinates so that they are both efficient and motivated.

“Other priorities for a CFO are to have the strength of character, personality, and intellect. I take it as a given in reaching such a position that an individual would have the requisite technical knowledge and financial skills.” [3]

How Start-Ups and Scale-Ups Benefit

Most start-ups and early-stage growth companies don’t need and can’t afford the services of a full-time FD. But that doesn’t mean they can’t benefit from all that FDs offer. They can access the skills of highly qualified FDs by engaging them on a part-time basis.

Part-time FDs can provide enormous value in terms of strategy and planning for early-stage or scale-up companies. A report from the Financial Executives Research Foundation (FERF) went further: it described their role as “critical to the success of start-up and early-stage growth companies” since they provide key insights. [4]

It found FDs play key roles in not only managing a young and fast-growing company’s finances but also in setting broader strategic goals and establishing and achieving financial and non-financial milestones.

When the company is at a stage when it needs external investment, the part-time FD can manage the process to ensure it raises the right type of funding from the right sources. The part-time FD can also provide more comprehensive reporting as well as manage the relationship with the external investors, whether they are venture capitalists, private investors, or banks.

Part-time FDs also help to establish sound reporting systems and tools that help improve reporting metrics and communications to investors.
They also play a key part in setting and monitoring company strategy and maintaining a balance between investing in growth, building market share and preserving capital for future opportunities.

As they grow, the need for a part-time FD’s financial and strategic acumen becomes more acute, FERF found.

The CFO Centre’s part-time FDs bring these skills to every client at a fraction of the cost of their full-time counterparts. For instance, its part-time FDs can:

• Provide you with an overview of your company so that you can make sound decisions about its future.
• Help you to understand your company’s finances.
• Eliminate cash flow problems.
• Identify cost savings within your company.
• Improve your profits.
• Create a realistic business plan and so make better financial decisions.
• Help you and your management team to manage your finances with ease.
• Develop clear strategic objectives.
• Identify your Critical Success Factors and Key Performance Indicators (KPIs).
• Find and arrange to fund.
• Understand your main profit drivers.
• Identify your best customers.
• Sort out your tax position.
• Introduce timely, easy-to-follow management reports.
• Facilitate expansion in your country and into other countries
• Build value to make your company more attractive to investors or buyers

To discover how an FD Centre part-time FD or CFO will help your business, contact us now on 0808 164 8902. To book your free one-to-one call with one of our part-time FDs, click here.

[1] ‘The Changing Role of the Chief Financial Officer’, Mbatha, David, KPMG

[2] ‘What Makes a Great Modern CFO?’, Dergel, Simon, Oracle, https://blogs.oracle.com, June 7, 2017

[3] ‘THE ROLE AND EXPECTATIONS OF A CFO A Global Debate on Preparing Accountants for Finance Leadership’, International Federation of Accountants, www.ifac.org, 2013

[4] ‘Center Of The Storm: The CFO’s Role In Start-ups And Rapidly Growing Companies’, Financial Executives Research Foundation, www.financialexecutives.org, March 28, 2017

On Saturday 21st July we (The CFO Centre) took part in our first competitive football tournament. We were invited to the 7 aside tournament by our partner and sponsor, Barclays. Money raised from the event was donated to the West Ham foundation which will help run a number of activities for the local community, including programs provided by the Premier League, and children’s soccer schools.

The venue and one of the draws to the event were that it was being held at West Ham training ground. The pitches were a replica of that of the Olympic stadium and the West Ham owners, players and ex-players were in attendance. There was fun for all the family on a beautiful hot sunny day.

The CFO Centre team consisted of JP Mills (Regional Manager) as a striker, Jamie Mills (Commercial Director), and Paul Cooper (Barclays) as Mid Field. Defenders; Wayne Smith (Financial Controller), Mike Tibbetts (FD for Thames Valley), Phil Drury (FD for South East), and Darren Cox (FD for South East). Lastly, our goalkeeper was Matthew Allen (Regional Director for London Central West).

Although it was a great day, unfortunately, The CFO Centre team could not quite manage to bring the trophy home. However, they did not let themselves down in a highly competitive yet good-natured tournament.

If you would like to find out more about West Ham foundation click here and if you would like to discover how a part-time FD can help your business contact us here or call 0800 169 1499.

Artificial Intelligence (AI) is already transforming the way in which financial services companies are doing business.

More and more of them are using AI to process the information on their customers, cut costs, save time, monitor behaviour patterns, assess credit quality, automate client interactions, analyse markets, assess data quality, and detect fraud.

A PWC Digital IQ 2017 survey found that 72% of business decision-makers believe AI will be the business advantage of the future.[1] About 52% said they’re currently making “substantial investments” in AI, and 66% said they expect to be making substantial investments in three years.

Franck Coison, Industry Solution Director, at international IT services company Atos, says the four main types of AI are facial and voice recognition, natural language processing, machine learning, and deep learning.[2] They can be used in chatbots, document analysis, process automation, or predictive analysis, he says.

Although robotic process automation (RPA) is increasingly common in financial services, it is usually used for quite simple, repetitive tasks, says Coison. “In contrast, AI can be used to automate more complex tasks that require cognitive, or ‘intelligent’, processes.

“While RPA is appropriate for back-office and accounting processes, when it is combined with AI, any process including customer-facing activities can be automated.”

That means it has great potential in areas such as customer service, sales and customer intelligence, IT services, fraud prevention, and cybersecurity, he says.

The PWC survey found that the adoption of practical machines that think is widespread in the financial services sector. Some banks use AI surveillance tools to prevent financial crime, and others use machine learning for tax planning. Many insurers use automated underwriting tools in their daily decision making and wealth managers offer automated investing advice across multiple channels.

A provider of next-generation investment analytics Kensho Technologies has for example developed a system that allows investment managers to ask investment-related questions in plain English, such as, “What sectors and industries perform best three months before and after a rate hike?”.[3] They receive answers within minutes.

AI is proving popular among banks too. Lloyds Bank, for example, has invested £3billion on its digital transformation initiative, which includes using AI to “simplify and progress modernisation of its IT and data infrastructure, as well as other technology-enabled productivity improvements across the business”.[4]

Terry Cordeiro, Head of Product Management at Lloyds Banking Group says AI has “completely transformed how the finance industry works, with the vision at Lloyds being to use smart machines for extending human capabilities while using data to respond.

“Automating processes means better opportunities to reduce costs for better decision making, and intelligent products mean that our customers are able to do much more,” Corderio says.

Earlier this year, NatWest Bank introduced ‘Cora’, an AI-powered ‘digital human’, which converses with customers in its branches.[5] Cora can answer more than 200 queries, covering everything from mortgage applications to lost bank cards.

The plan is to develop Cora so it can answer hundreds of different questions, as well as to detect human emotions and react verbally and physically with facial expressions. As well as being put in branches, Cora could be used by customers at home on their laptop or PC and, in the long run, on smartphones.[6]

Finance departments are also benefiting from AI. The insight into data that it can provide will be a competitive advantage, according to Matthias Thurner of the Corporate Performance Management and Business Intelligence solutions provider, Unit4 Prevero.[7] “For this reason, AI will become integral to finance functions in every industry,” he says.

As technology improves, AI will become faster and smarter at providing analysis, he says. Companies that don’t use it will be at a competitive disadvantage.

“Businesses don’t want to replace their employees, but they do want to make better financial decisions, and AI will allow them to do that faster and cheaper than a whole team of humans.”

It will enable skilled office workers to spend more time on their core competencies rather than maintaining data, he says. This will help organisations to reduce costs and the time spent on manual tasks or the classifying of data.

Likewise, FDs will benefit from AI data analysis, says Thurner. That’s important since there’s an increasing expectation for FDs to be a source of business insight. Boards want more frequent reports that contain more context and detail. Fortunately, they will be able to deliver more detailed and more frequent reports thanks to AI, he says.[8]

But it’s unlikely an FDbot will appear in finance departments any time soon. “We can expect machine learning to powerfully augment human expertise and experience in the near future even if that’s not a reality today,” says Thurner. “AI can provide data back-up and make suggestions to help the human decision-maker, but it’s the CFO who ultimately has to decide what to recommend,” says Thurner.

With so much potential in key areas of business, it’s no wonder that AI is being hailed as the Fourth Industrial Revolution.

“AI will have an impact as big as electricity and will transform every single industry,” predicts Cordeiro of Lloyds Banking Group.

To discover how a part-time FD will help your company, please call the FD Centre on 0800 164 8902 or visit our website now.

[1] ‘Artificial intelligence and digital labor in financial services’, PWC, https://www.pwc.com

[2] ‘Artificial intelligence: the new power in financial services’, Coison, Franck, Director of Finance, http://dofonline.co.uk, May 21, 2018

[3] ‘How Artificial Intelligence Will Redefine Management’, Kolbjørnsrud, Vegard, Amico, Richard, Thomas, Robert J., Harvard Business Review, https://hbr.org, November 2, 2016

[4] ‘Artificial intelligence ‘transforms financial services’, Alger, Leah, Software Testing News, http://www.softwaretestingnews.co.uk,June 19, 2018

[5] ‘How does NatWest keep up-to-date with online banking trends?’, Alger, Leah, Software Testing News, http://www.softwaretestingnews.co.uk, June 15, 2018

[6] ‘NatWest Bank tests Cora, an AI bot that will answer customer questions, Jones, Rupert, The Guardian, https://www.theguardian.com, February 21, 2018

[7] ‘Here are the human CFO traits that no artificial intelligence can replace’, Thurner, Matthias, Diginomica, https://diginomica.com, March 12, 2018

[8]  ‘Do CFOs have what it takes to be AI educators?’, Thurner, Matthias, Finance Director, www.financedirector.co.uk, February 21, 2018

You shouldn’t be surprised to discover that Meryl Streep, Robert De Niro, Hugh Jackman, Gary Oldman among many other Oscar-winning actors and actresses bear a grudge against Finance Directors.

It’s easy to understand why. For although the likes of Streep and Oldman have achieved fame, fortune and critical acclaim, they can usually only inhabit one role at a time. They take it on for a few months and then move on to the next.

A great FD, by comparison, is the master or mistress of multiple roles and can switch between them easily and effortlessly. What’s more, they perform those multiple roles day in, day out for weeks, months and even years.

That’s because an FD is there to help the business owner achieve the company’s objectives by providing financial and strategic guidance to ensure it meets its financial commitments and to develop policies and procedures to ensure its financial management is sound. The Institute of Directors says the FD is “often viewed as the member of the board who creates a solid foundation upon which a business can grow”.[1]

It’s why a typical FD job advertisement features a huge list of responsibilities. These will often include the following and more:

• Providing strategic financial leadership to optimise the organisation’s medium to long-term financial performance and strategic position
• Contributing fully to the implementation of organisation strategy across all areas of the business, challenging assumptions and decision-making as appropriate and providing financial analysis and guidance on all activities, plans, and targets
• Providing robust financial reporting and analysis to the Board of Directors, Finance, Risk and Governance Board and Corporate Management Team including the provision of financial support to strategic decision-making and transactions
• Working with senior management to steer the business towards the goal of greater financial independence and sustainability
• Providing cash management – monthly cash flow reporting and long-term strategic cash management
• Overseeing the preparation of VAT and other statutory submissions
• Developing and ensuring compliance with financial policies and controls
• Presenting annual accounts to the General Meeting.
• Risk management and reporting – maintenance of the organisation’s risk register ensuring control processes are fit for purpose
• Developing an IT strategy that supports the organisational strategy.

Although FDs aren’t expected to be able to speak in an accent, swordfight or ride a horse as actors are, they are expected to have accountancy qualifications, excellent communication and interpersonal skills, the ability to manage complex stakeholder relationships and to provide strong attention to detail with commercial and strategic acumen.

So, as you can see, at any time during an FD day, the FD will be a sounding board/mentor for the CEO (and sometimes the only one to point out the flaws in a ‘blue sky’ idea), strategic advisor, bookkeeper, financial controller, risk management advisor, finance team leader, recruitment advisor and much more.

Being able to adapt to any one of the roles comes from experience. The CFO Centre’s part-time FDs, for instance, have all had years of experience working in large corporations. They’re used to working in complex, demanding environments and switching roles as the need arises.

Unlike actors, FDs don’t perform as they do for applause or for a gold-plated statuette (although many would be very, very happy if you offered to pay them in real gold bullion). They do it to help business owners like you take your fledgeling business to new heights of success.

What’s more, you can be sure that the FD you hire won’t ever pull you aside before or during a meeting to ask, “What’s my motivation?” *

To discover how an FD Centre part-time FD or CFO will help your business, contact us now on 0808 164 8902. To book your free one-to-one call with one of our part-time FDs, just click here.   

* [Note: No Oscar-winning Hollywood actor or actress was harmed during the writing of this article.]

[1] ‘What is the role of the Finance Director?’, Factsheet, Institute of Directors, https://www.iod.com, May 2017

If you’re looking for a quick way to cut costs, boost efficiency and improve productivity then consider outsourcing one or more of your business’ support processes.

Outsourcing has many benefits and can give you a greater competitive edge in your market. It allows you to tap into a large international talent pool and benefit from external expertise. Your outsourced providers can provide services, innovative approaches, and the latest technology along with cutting-edge solutions that your in-house team might be unable to provide.

It also allows full-time employees to focus on your company’s core competencies. And it means you have lower operational and recruitment costs. The cost savings you achieve with outsourcing can help you to release capital for investment in other areas of your business.

But outsourcing does have its downsides. For example, there’s a risk in allowing outsourced providers to handle confidential company data, whether that’s the details of employees or customers or competitive information. Under the GDPR, companies will be held responsible for any third-party data breaches. The penalties for such breaches will be stiff. What’s more, any data breaches will dent your company’s reputation and damage your brand.

Then there’s the risk that the output will be sub-standard or that delivery time frames will be stretched. Both would damage your company’s reputation and possibly result in lost sales. And there’s a danger that unless the outsourcing is carefully managed, the expected cost savings won’t materialise. This was the case for the UK government. Its programme to outsource back-office functions ended up costing taxpayers £4 million. Officials had predicted the programme would save up to £400 million a year, but after two and a half years, it had saved just £90 million but cost £94 million.

It’s for these reasons many companies are still reluctant to consider outsourcing.

That’s a shame because if the outsourcing is well-managed, the benefits will far outweigh the risks. Take the Alibaba.com e-commerce website, for example. Today, it’s known as the world’s biggest global marketplace but in its early days, its founder Jack Ma had to outsource the website development to a US company. At the time, he couldn’t find development talent in China whereas developers in America had the skills he needed. It also allowed him to overcome the Chinese government’s tight internet restrictions.

Google is another giant that also outsources work to IT specialists, developers and virtual assistants. At one point, Google outsourced phone and email support for AdWords, one of its top-grossing products, to about 1,000 external representatives.

The founders of the hugely popular WhatsApp Brian Acton and Jan Koum also hired the services of external providers. In their case, they used the services of an iPhone developer Igor Solomennikov for the core development work on the app.

What can you outsource?

You can outsource any or all of the following:

• Administrative tasks such as data entry, typing, travel arrangements and scheduling.
• Lead generation and customer service including cold calling
• Marketing including content writing, direct marketing, website design, brand development, press releases, social media, blogging and search engine optimisation
• IT Directors
• Sales Directors
• Legal Directors
• Human Resources including recruitment and the management of employee benefits
•  Accounting and financial duties including bookkeeping, invoicing, accounts payable and receivable, payroll processing and financial reporting. You can, for example, hire a part-time Finance Director who knows how to finance a business, deal with growth, present meaningful monthly numbers and get the best deals from banks.

It means you get a highly experienced senior FD with the experience and knowledge to help you plan, manage and control business growth. The CFO Centre will provide you with an FD with ‘big business experience’ for a fraction of the cost of a full-time FD.

To discover how an FD Centre part-time FD or CFO will help your business, contact us now on 0808 164 8902. To book your free one-to-one call with one of our part-time FDs, just click here.

Imagine this: the co-founder of a multi-million-dollar HR management software company with almost 500 employees likes to micromanage to the point he, and not the HR department, has sole approval over employee benefits.

Likewise, when any of those hundreds of employees requests time off for holidays, it’s he and not the HR department that says ‘yes’ or ‘no’.

The company doesn’t have a dedicated IT employee to fix computers or printers because that same co-founder believes its gifted engineers should be able to resolve any IT problems that occur—no matter if doing so pulls them away from developing products or resolving customer problems.

Far worse, a massive influx of business means the company can’t keep up with licensing its insurance agents in each of the American states in which it operates. News leaks out, and the company is embroiled in a scandal with the prospect of millions of dollars in fines. The CEO and Co-founder is asked to resign, which he does.

It might sound far-fetched, but these are just a few of the problems the US HR software company Zenefits experienced during its accelerated growth or scale-up stage, according to Claire Suddath and Eric Newcomer of Bloomberg.

Zenefits, founded by entrepreneur Parker Conrad and Laks Srini in 2013, offered free software to automate the payroll, health insurance and HR services of small US companies. It made most of its money through brokerage commissions that were paid by insurance companies when clients bought one of their plans. The commissions recurred annually so once a business signed up, Zenefits continued to benefit.

That quickly drew the interest of investors—in particular, that of Andreessen Horowitz, one of Silicon Valley’s top venture capital firms.

Within three years, the company had gone from 15 employees to 1,600. During three fundraising rounds, it raised $580m (about £435m). By the end of 2014, it had surpassed a $20m (about £20m) recurring revenue goal and by 2015, was valued at $4.5bn (about £3.3bn).

By then, the company had about 14,000 customers and was in the process of hiring more than 1,000 additional employees. Things were moving at such a pace that a manager said he interviewed and hired people so fast that by the time they turned up to work, he’d forgotten who they were. One entry-level sales rep was told in an interview that the company was expanding so rapidly that he was guaranteed a promotion within a month.

That year, Conrad said in a talk, “There’s a low-level panic that suffuses the organisation, a constant pressure to keep moving faster and faster and faster.”

But then those serious compliance issues came to light and Conrad was advised to resign in early 2016, which he did. The company’s valuation plummeted by 55%.

The new CEO David Sacks wrote later in an internal email to staff, “It is no secret that Zenefits grew too fast, stretching both our culture and our controls.”

Fortunately for the company, it survived and now has more than 20,000 accounts.

Timing was the biggest scale up challenge for Hyperoptic, which runs its own dedicated Fibre-to-the-Premises (FTTP) network and offers symmetrical gigabit broadband services across 28 cities and towns across the UK.

The company was founded in 2010 by entrepreneurs Boris Ivanovic and Dana Tobak. Two years later the duo secured an equity investment of £50m from Quantum Strategic Partners Ltd, a private investment vehicle managed by Soros Fund Management LLC.

Co-founder Dana Tobak told Alison Coleman of Forbes.com, “Startups, even well-funded ones, need to conserve cash and spend smart. Most companies have multiple ‘engines’ such as sales, marketing, production, and customer support. We decided to ‘scale-up’ our sales organisation and used progress KPIs to determine when we needed to scale up the other ‘engines’ of the business. Some were faster to scale up than others, and in some cases, the lag negatively impacted customer experience.”

Like Zenefits, Hyperoptic survived its early scale-up challenge. Over the last six years, it’s grown its network fivefold. Its full fibre broadband now passes 350,000 residential homes and business units.

Tobak credits its growth to customer support as well as external funding.

“We have a 4* Trustpilot rating; the highest in the industry. Our customers have really supported us by sharing their experiences with their neighbours, family and friends, which has meant that we have been able to expedite our rollouts across urban centres.”

This year Hyperoptic received £100m in funding from a consortium of four ‘tier one’ European banks (BNP Paribas, ING, RBS and Dutch investment bank NIBC). Last year, the European Investment Bank agreed to provide £21m to fuel Hyperoptic’s rollout and market expansion.

With the new funding, the company plans to grow the network another sixfold and make its hyperfast broadband service available to two million homes by 2022 and five million by 2025.

While your scaleup might not experience all Zenefits’ internal and external challenges Zenefits or even the timing issues that Hyperoptic did, it is likely to face at least one of them. It might be:

• People challenges
• Sales and marketing challenges
• Operational challenges
• Administrative challenges
• Financial challenges.

As the CFO Centre’s founder Colin Mills said in his book, ‘Scale Up: How to Take Your Business To the Next Level Without Losing Control and Running out of Cash’, the scale-up stage is when businesses really struggle because they’re growing but don’t have the infrastructure to support their expanded operations.

They might have the necessary revenue, manufacturing base or customer reach of a substantial business but their controls, processes, personnel, leadership and culture are often still that of the much smaller business they were a short time before, he said.

Worse, they often don’t have the resources to create and maintain such an infrastructure.

During the scale-up stage, they face running out of cash or simply getting stuck, he said.

It’s only possible to avoid such problems by revising your entire business model. If you don’t, then all the small problems that niggle at you now are likely to become major issues once you begin scaling up.

Even if your business is already going through the scale-up stage, it’s still possible to retrofit, design and redesign it, he said.

“In many ways, like most things in life, scaling up is not rocket science. No genius is required”, said Mills. “It can often be about common sense. But common sense isn’t always common practice, and being able to focus on the most important things as you scale up is a skill that can get lost in the complexity of the whole process.”

The easiest way to focus on what’s important during the scale-up stage is to have expert help from a part-time CFO who has big business experience.

And for a fraction of the cost of a full-time CFO, the CFO Centre will provide you with a highly experienced senior CFO who will work with you on a part-time basis to help your business scale up. To discover how the CFO Centre will help your company to scale up, please call us on 91 9967531075 or contact us here now.