9 Ways Startup CFOs Helps to Drive Company Growth
So often—too often—I see the position of CFO as misunderstood or undervalued in smaller companies. In such companies, there needs to be a paradigm shift as the company grows. Early-stage companies need to understand how a CFO can positively impact the company’s growth from every angle.
CFOs can help lead the charge when it comes to growing your company. Because your business strategies are deeply woven in with your financial strategies, you need CFO support for any and all of your growth initiatives: from the planning stages through to execution.
When your CFO is deeply involved at a holistic strategic level—not just a superficial money management level—here’s what he can do.
1. Identify strengths and your competitive advantage. Your CFO has deep insight into your company’s strengths. Where are you making money? Where is your biggest ROI? With this knowledge, your CFO can help you to leverage these strengths. Also recognizing your competitive advantage is key to successful growth. You want to pursue opportunities that will positively impact on your company, not detract from where your company is already successful.
2. Target weaknesses. The flip-side, of course, is that your CFO sees your weaknesses. Sometimes it takes an objective eye to target those products that just aren’t producing, or other business initiatives that are losing you money. Numbers don’t lie; they offer an objective read on the financial health of your company. With the help of your CFO, you can see where you need to invest in particular areas to give them the resources they need to thrive—or where you need to cut your losses and pivot.
3. Understand market opportunity. Your CFO can help you to understand the competitive marketplace. Where are their market opportunities? How can you better leverage these opportunities?
4. Create a portfolio of growth initiatives. Your growth strategy needs to be multi-faceted with multiple initiatives. Your CFO will help you to achieve the goal of optimizing for the entire portfolio.
5. Think long-term. While you may be tempted by short-term growth initiatives, these are not always the best choice for your company. You need to think more long-term to see if these short-term opportunities will wind up costing you somewhere down the road. Financial projections are a useful tool for shaping your long-term strategy.
Contact Early Growth Financial Services for help with financial projections.
6. Identify strategic partnerships. What business partners can further your growth? Whether it’s a supplier that can give you a better deal on raw materials or a competitor with whom you may be able to merge for greater market penetration, your CFO is skilled in finding the key players with whom you can form relationships to accelerate your velocity.
7. Assess management effectiveness. Your CFO plays an integral role in evaluating your management team, quantifying their effectiveness, and assessing whether your team is well-positioned to execute on your growth strategy.
8. Maintain customer focus. You want to grow your company, but not at the expense of your existing customers. Your CFO will help ensure that you stay committed to your existing client base even as you increasingly push to acquire new customers. If you can’t keep up the quality of your offerings and of your customer service while growing, then you’re not ready to grow.
9. Determine impact of growth initiatives on current employees. How will their roles change? How will processes change? Do they have the bandwidth to take on more responsibility? Do they have the skill-set to take on more?
Get the picture?! If you aren’t inviting your CFO to help shape and achieve your growth initiatives, you are wasting a valuable resource. And if you don’t have a CFO yet, and your company has raised a substantial seed or convertible note round, is earning significant revenue, and/or has professional or institutional investors…what are you waiting for??
How is your CFO involved in your company? Tell us about it in comments below or contact Early Growth Financial Services for CFO support.
David Ehrenberg is the founder and CEO of Early Growth Financial Services, a financial services firm providing a complete suite of financial and accounting services to companies at every stage of the development process. He’s a financial expert and startup mentor, whose passion is helping businesses focus on what they do best. Follow David @EarlyGrowthFS.