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how to avoid stress with The FD Centre

3 Ways to Prevent Stress from Taking Over Your Life

Your best chance of succeeding in the fight against stress is to aim for prevention. Use these three methods to prevent stress on the individual and organizational level.

The following excerpt is from Dr. Nadine Greiner’s book Stress-Less LeadershipBuy it now from Amazon | Barnes & Noble | Apple Books | IndieBound

Too many people wait until stress has progressed too far before taking action. But unlike other afflictions, like alcohol abuse or cancer, that only affect certain individuals, stress affects all of us — stress is not an “if” but a “when.” So, it makes sense to take preventive measures against stress.

Time management

As an executive, you know there are never enough hours in the day. From streams of emails to floods of meeting requests, your time is under constant attack. Time management becomes more difficult as workloads increase, but it’s crucial to effective leadership and stress prevention.

The first step toward understanding how effective you are at time management is to do a time audit assessing how much time you spend on the activities that consume your day. Then, to-do lists, calendar apps, and time-tracking software can all help you remain on task and better understand how effectively you are dividing your time.

 

Delegating

Managers frequently struggle with delegating. Do you enjoy delegating, or does it give you anxiety? Effective delegating doesn’t just prevent stress and burnout among leaders, but it also enhances team capacity. When leaders delegate work thoughtfully, they empower their team members to take on new responsibilities and expand their skill sets. Effective delegation involves five key steps:

1. Evaluate. Leaders must first determine whether a task should be delegated. If it’s critical for long-term success and mission-critical to the company, they may not want to delegate it. Leaders must also evaluate whether they have enough time to effectively delegate the job. Delegating shouldn’t be a rapid-fire handoff. They’ll need to spend time training, checking on progress, and engaging in constant communica­tion.

2. Prepare. Leaders must map out exactly what’s required. They should include clear and comprehensive information about timing, budget, milestones, communication frequency, and resources.

3. Assign. Leaders must determine which team members have the required skill set or expertise to complete the task. Ideally, it should help employees grow and expand their capabilities.

5. Avoid micromanaging. Once leaders hand off the baton, it’s critical to avoid micromanaging. If an employee hits a roadblock, leaders should treat this as a learning opportu­nity and not take the reins. Effective coaching will help employees understand where they’ve gone wrong and help empower them to succeed in the future.

If you struggle with delegation, consider blocking off time each day to create a plan of action. With careful planning, you and your team can succeed. Once you start delegating effectively, your team will dare to come forward more often and more vigorously.

 

Avoiding overcommitment

Do you find yourself biting off more than you can chew? Overcommitment is common among executives and leaders as they agree to take on tasks without considering whether they have enough bandwidth. But as requests and tasks pile up on each other and deadlines draw near, leaders can become overwhelmed and stressed.

Overcommitment can be crippling and lead to a kind of paralysis. The most effective antidote against overcommitment is to be firm and set boundaries. You must be vigilant about protecting your time and learn how to say “no.”

Article courtesy of: https://www.entrepreneur.com/article/337726

9 advantages of an FD

Top 9 Advantages of a Part-Time FD/CFO

The quicker you want your company to achieve its goals, the sooner you should consider hiring a part-time FD or CFO.

That’s because a part-time FD or CFO will provide your company with the high-level financial expertise necessary to scale up (things you and your team may not even be aware you need), for a fraction of the cost of a full-time FD/CFO.

Hiring a part-time FD or CFO provides your company with many advantages that really help it to grow and stand out in any marketplace. But here are the top nine advantages you and your employees and stakeholders can expect when you hire a part-time FD/CFO.

 

1.Cost-saving

By hiring a part-time rather than full-time FD or CFO, you can avoid the often-hefty recruitment and hiring costs (and the delays they inevitably entail). What’s more, you can hire a part-time FD or CFO for a fraction of the cost of a full-time employee. You won’t have to offer a benefits package or bonuses to retain the appointee.

 

2. Strategic advice

Your part-time FD or CFO will provide you with strategic analysis and support on every financial aspect of your business. A report from the Financial Executives Research Foundation (FERF) described CFOs as “critical to the success of start-up and early-stage growth companies” since they provide key insights.

It found CFOs 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.

What’s more, part-time CFOs or FDs can highlight potential threats or risks of which you and your team may be unaware or perhaps don’t know how to deal with.

 

3. Flexibility

You can use the services of your part-time CFO or FD for what you need when you need it. That could be for a variety of different financial functions or a specific project. This means you and your CFO or FD can tailor the role to suit your company’s needs at any time.

 

4.Multiple industry experience

Although you can choose to work with part-time CFOs or FDs who have direct experience in your given industry, you can also opt to work with those that have experience across multiple industries. The advantage will be that your CFO or FD will provide you with access to networks and multi-layered insights that you might not otherwise have

 

5. Crisis management

The loss of major contracts, customers or employees can be devastating for any business. Your part-time FD or CFO will be able to help you and your team navigate your way out of the crisis. This could include producing short-term cashflow reports, identifying costs that can be cut, producing new financial forecasts, and helping with raising vital funds.

 

6. Sounding board

Running a company can often be a lonely, stressful experience for CEOs, according to the FD Centre’s Chairman Colin Mills in his book ‘Scaling Up How to Take Your Business to the Next Level Without Losing Control and Running Out of Cash.[1]

He’s seen first-hand what pressure does to business owners.

“I’ve sat in sales meetings with entrepreneurs who had literally been brought to tears by stress and frustration and the feeling that it’s all too much.”

That’s where a part-time FD or CFO can help. He or she can act as an independent sounding board for the over-burdened, stressed-out business owner. With their ‘big business’ experience, it’s more than likely CFOs or FDs can provide solutions to what can seem like overwhelming problems to the CEOs of growing businesses.

 

7. Mentorship for your team

Part-time CFOs help to establish sound reporting systems and tools that help improve reporting metrics and communications to investors. They can also act as mentors to members of your existing finance team, guiding them where necessary and providing the advice they need to rise to new challenges.

 

8.Access to a national and international network

If you choose a part-time CFO or FD from an organisation like the FD Centre, you’ll benefit from the expertise from all the FDs in its worldwide network. That’s hundreds of years of experience in every aspect of finance—all for a fraction of the cost of employing a single full-time FD.

 

9. You won’t get left behind

If you’re still hesitating about whether now is the right time to hire a part-time FD/CFO, consider the sorry tale of Kodak—a company that got left behind, despite once being one of the most powerful companies in the world.

Kodak was once known for innovation (being the creator of the Box Brownie camera, Kodachrome film and the Instamatic).[2] Here’s what’s remarkable—a Kodak engineer Steve Sasson developed the world’s first digital camera way back in the mists of time (actually, 1975). Okay, it was the size of a toaster, took 20 seconds to capture low-quality images which had to be viewed on a TV. But still… it had the potential to disrupt the market massively.

The company poured billions into developing the technology to take photos using mobile phones and other digital devices but delayed acting on it due to fears digital technology would destroy its film and photographic developing business. It failed to act fast enough and to identify the opportunities posed by digital technology.

On January 19, 2012, Kodak filed for bankruptcy protection in 2012, then exited its legacy businesses and sold off its patents.[3] It re-emerged in 2013, albeit in a vastly slimmed down version of its former self.

If you want to avoid becoming a post-script or salutary tale in your market, appoint a part-time FD or CFO. He or she will provide you and your team with strategic help and advice to recognise threats and to seize opportunities—thanks to vast experience and expertise.

The FD Centre (and CFO Centres) offer the services of part-time FDs or CFOs with big business experience who can use what they know to help your company achieve rapid yet sustainable growth. What’s more, they’ll help remove fear, confusion, and stress from the entire process.

To discover how the FD Centre (or CFO Centre) will help your company to scale up, please call us on +27 861 127 280 or contact us here.

How it works

The FD 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 and not only eliminate cash flow problems and identify cost-savings but also to 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 find out how an FD Centre part-time FD or CFO will help your business, contact us now on +27 861 127 280 or contact us here.

What people are saying

People are talking about what they really think of the FD Centre’s part-time FDs. Find out what they’re saying on these short videos here.

Where are you going wrong?

You can identify strengths and weaknesses in your business in just nine minutes with the F-Score click here now. 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?

Have a burning question for one of our team of FDs? Just ask it here, and you’ll get an answer within 24 hours. The question must be finance-related (sadly, they can’t predict who will win the World Cup).

Introducing The FD Centre team – Mochele Noge

Name:

Mochele Noge

 

Qualification:

B Com (Wits), H Dip (Corp Law) ( RAU), Hons (Acc) (Natal), PGD (Tax Law) (UJ), PGD (International Tax), M Com (SA and International Tax), LLB (Unisa) (Currently Studying) CA(SA)

 

Company Role:

Regional Director

 

What did you do before joining The FD Centre?

Entrepreneur

 

How long have you been with The FD Centre?

Since October 2018

 

Best part of being part of The FD Centre?

Independence derived from being the master of your own destiny and identity

 

What are the values that drive you?

Your values are the things that you believe are important in the way you live and work. My values are loyalty, integrity, hard work and honesty

 

What’s in your coffee?

Whisky

 

Q: What is the best part of being part of The FD Centre team?

A: Independence derived from being the master of your own destiny and identity

Tech start ups: Here’s why your idea isn’t yet the next big thing

The lore of geeks in the garage and entrepreneurs on couches is only part of the story

The humble beginnings of tech start-ups that would become multi-billion dollar companies are the stuff of legends. We all know the story of Apple. How the two geniuses both of whom were named Steve – Steve Jobs and Steve Wozniak – started what would become the Apple Empire in the garage of the parents of Steve Jobs.

 

Or the story of Airbnb’s founders Brian Chesky and Joe Gebbia who had just landed in San Francisco after having moved from NY. They still had not found jobs and were having trouble paying their rent so they were looking for ways to earn some extra cash. There was a conference in town and they noticed that all the hotel rooms in the city had been booked. They bought a few airbeds, put up a website to advertise that they could be rented out for $80 a night and the rest is history. Airbnb is now worth more than $25 billion.

The other side of the success story

While these stories and countless others are well-known, what is not so well-known is the actual process of how they raised the capital to go from start-ups to tech superstars.

Everyone is looking for the next Uber, Airbnb, Amazon – you name it

Most tech start-ups start with an idea of how to do something cheaper, better, faster – to make the experience more enjoyable and to fulfill a need for the end user that isn’t currently being satisfied by established products and services.

Uber made it easy and convenient to hail a cab. Airbnb made it easy to find inexpensive accommodation. Amazon changed the way we shop forever and heralded the beginning of the end for traditional bricks and mortar retail.

From the tech start-ups themselves to investors, everyone is looking to create and discover the next big thing. 100s of thousands of start-ups, do just that, they start, yet only a handful finish what they started and actually successfully launch – much less become the next Apple.

Growth depends on capital

The reasons for failure are many and varied, but a key factor as observed by Forbes magazine is that less successful entrepreneurs try to do everything themselves even if they don’t really have the necessary skill sets to effectively do so. This is especially true in such critical areas as raising finance, accounting and big-picture strategic thinking.

 

Successful entrepreneurs, on the other hand, understand that they must work on their business, not in their business. They need to focus on and leverage their core skill sets. They understand that sometimes they must look outside of their companies for the expert skills they need to get ahead. This understanding that they cannot do everything by themselves optimally can make the difference between success and failure.

 

You need more than a big idea – you need to attract capital

Cracking the next big idea is the fun part of the start-up, the sexy and exciting part that gets everyone fired up. But developing the actual product and getting it out into the market is a different story. It takes a lot of money to get out of the start-up zone.

Last year alone, more than $379 million dollars was raised for African Fintech start-ups. That is a lot of money, but there is fierce competition for it.

How do you make your start-up stand out from the 1000s of other start-ups out there to get the working capital you need to grow? You need a killer business plan. You need robust growth projections. A bullet-proof go-to-market-strategy.

In order to attract sufficient capital, it is essential that the financial projections of your start-up look robust and appeal to investors. This is no easy task. It takes experience and financial expertise to frame the projections in a way that makes them appealing but also attainable and not overly inflated.

In short, you need someone who has proven experience in approaching VCs for funding with all of the ammo and information they need to land the deal. For angel investors, they care about the devil in the details. Most likely, those skills will not reside in your company.  When in doubt, bring in the big guns, seasoned professionals who do this for a living. That is exactly what most tech superstars who are now household names did.

Many professionals that raise capital will even partner with start-ups and put part of their fee at risk. If they don’t land the deal, they will cut their fee.

 

90% of start-ups fail

 

“Growth — fast growth — is what entrepreneurs crave, investors need, and markets want. Rapid growth is the sign of a great idea in a hot market.”

 

The bottom line is that if you want your start-up to become the next Apple, Airbnb, etc. sometimes you have to accept that you’ll need to bring in an outsider with the critical skill sets needed to get your start-up off the ground.

 

Paul Salter

Regional Director

A highly experienced Director of International Businesses in the Transportation, Industrial and FMCG sectors including DHL, UNILEVER and WHITBREADS. FCMA / GCMA Qualified, Member of the Institute of Management.

Manufacturers: Is the wrong talent looking after your margin management?

In February 2019, local utilisation of available manufacturing capacity was sitting at 80.8%, leaving 12.2% capacity unused.

In a sluggish economy, where demand is weak, margin management is a business imperative.

Manufacturing executives often think they know how well their company is managing margins, but they often fail to rigorously quantify internal and external factors that affect profitability:

 

1. Customer margins:

All customers are not created equal, especially when it comes to margins. Some analysts estimate that the top 20 percent of customers (by profitability) generate more than 120 percent of an organisation’s profits—while the bottom 20 percent account for more than 100 percent of company losses.

2.  Channel margins:

Manufacturers can sell across a wide range of sales channels today, from conventional wholesalers, distributors and retailers to direct sales via the company or third-party websites. Effective margin management requires a thorough analysis of the cost structures for each channel, and their respective profit potentials.

 

3. Product margins:

Many middle market manufacturers fail to track margins by SKU, which leaves executives at these firms in the dark regarding which high-margin products to invest in—and which low- or no-margin products to discontinue. This lack of data not only damages profitability today, but limits growth tomorrow as capital and resources are directed at the wrong opportunities. Better understanding of variable and fixed costs at the product level helps managers make more informed decisions. Additionally, understanding buyer behaviours regarding strategic low-margin SKUs through deeper understanding of customer analysis is critical.

 

4. Hidden costs:

As a product moves to market, an assortment of hidden costs can eat away at margins. While these costs always have an impact on the bottom line, they are rarely linked to specific customers, channels and products, making them difficult to minimise or control.

Most manufacturers are also improving margins by improving operational efficiency in offices, factories and supply chains. High-performing processes require highly-skilled individuals but their ability to manage margins makes them a smart business investment.

 

Many middle market companies plateau because they outgrow their internal talent.

Operations improvements should also enhance agility and flexibility so an organisation can rapidly respond to new competitors, changing economic conditions and emerging opportunities. These fundamental changes in business models also require new talent—and new technologies. Paradoxically, sometimes the best way to increase margins is by subtraction. Executives need nuanced margin analyses that permit them to discontinue underperforming product lines or exit unprofitable markets, or to amend or cancel contracts with low-margin customers—freeing resources for higher-margin growth.

 

As South Africa’s manufacturers profits struggle to grow, is it time to relook who is looking after your margin management?

Although there are significant pressures on margins in manufacturing in South Africa, there are numerous winners in the manufacturing space—companies that manage to innovate on cost reductions and premium service enhancements to make great returns. Smart financial strategies are at the centre of most of these successful companies, providing focused and actionable insights, which help them fine-tune operations, and create opportunities to increase prices.  As South Africa’s manufacturers profits struggle to grow, is it time to relook who is looking after your margin management?

 

Rowan De Klerk – CEO, South Africa & Group COO, Asia-Pacific

A highly strategic business professional with 25 years working as a Financial Director and Managing Director in multiple blue chip companies, both locally and globally. Highly experienced across financial & business strategy; sales & marketing; operations; systems design & implementation; management & board reporting; coaching & mentoring; investment appraisal; M & A activity & exit planning.

Introducing The FD Centre team – Jacqui Crosby

Name:

Jacqui Crosby

 

Qualification:

CA (SA)

 

How long have you worked for The FD Centre?

I joined The FD Centre just over 4 years ago in March 2015.

 

What did you do before joining The FD Centre?

I was with Times Media for almost 10 years, where I looked after the Nu Metro divisions as the Finance Director.  I then took a year’s sabbatical to be with my children.

 

Company Role (current):

Being a Part-time Finance Director at The FD Centre has allowed me to actively be involved with my clients as Finance Director, managing Operations and Human Resources aspects of the business as well as being a trusted advisor.

 

Describe your job in three words:

Challenging, flexible and steadfast.

 

Best part of your job:

I enjoy being involved in the strategic side of the business and putting the strategy into actual numbers. What I have also enjoyed over the last 4 years is getting to know different industries and meeting entrepreneurs who follow their dreams.

 

What’s in your coffee?

I am a cappuccino drinker and my Nespresso machine even comes on holiday with me!

 

What are the values that drive you?

My core value is being a good role model to my 3 daughters.

 

Top 9 Advantages of a Part-Time FD/CFO

Top 9 Advantages of a Part-Time FD/CFO

The quicker you want your company to achieve its goals, the sooner you should consider hiring a part-time FD or CFO.

That’s because a part-time FD or CFO will provide your company with the high-level financial expertise necessary to scale up (things you and your team may not even be aware you need), for a fraction of the cost of a full-time FD/CFO.

Hiring a part-time FD or CFO provides your company with many advantages that really help it to grow and stand out in any marketplace. But here are the top nine advantages you and your employees and stakeholders can expect when you hire a part-time FD/CFO.

1. Cost-saving

By hiring a part-time rather than full-time FD or CFO, you can avoid the often-hefty recruitment and hiring costs (and the delays they inevitably entail). What’s more, you can hire a part-time FD or CFO for a fraction of the cost of a full-time employee. You won’t have to offer a benefits package or bonuses to retain the appointee.

2. Strategic advice

Your part-time FD or CFO will provide you with strategic analysis and support on every financial aspect of your business. A report from the Financial Executives Research Foundation (FERF) described CFOs as “critical to the success of start-up and early-stage growth companies” since they provide key insights.
It found CFOs 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.

What’s more, part-time CFOs or FDs can highlight potential threats or risks of which you and your team may be unaware or perhaps don’t know how to deal with.

3. Flexibility

You can use the services of your part-time CFO or FD for what you need when you need it. That could be for a variety of different financial functions or a specific project. This means you and your CFO or FD can tailor the role to suit your company’s needs at any time.

4. Multiple industry experience

Although you can choose to work with part-time CFOs or FDs who have direct experience in your given industry, you can also opt to work with those that have experience across multiple industries. The advantage will be that your CFO or FD will provide you with access to networks and multi-layered insights that you might not otherwise have.

5. Crisis management

The loss of major contracts, customers or employees can be devastating for any business. Your part-time FD or CFO will be able to help you and your team navigate your way out of the crisis. This could include producing short-term cashflow reports, identifying costs that can be cut, producing new financial forecasts, and helping with raising vital funds.

6. Sounding board

Running a company can often be a lonely, stressful experience for CEOs, according to the FD Centre’s Chairman Colin Mills in his book ‘Scaling Up How to Take Your Business to the Next Level Without Losing Control and Running Out of Cash.[1]

He’s seen first-hand what pressure does to business owners.

“I’ve sat in sales meetings with entrepreneurs who had literally been brought to tears by stress and frustration and the feeling that it’s all too much.”

That’s where a part-time FD or CFO can help. He or she can act as an independent sounding board for the over-burdened, stressed-out business owner. With their ‘big business’ experience, it’s more than likely CFOs or FDs can provide solutions to what can seem like overwhelming problems to the CEOs of growing businesses.

7. Mentorship for your team

Part-time CFOs help to establish sound reporting systems and tools that help improve reporting metrics and communications to investors. They can also act as mentors to members of your existing finance team, guiding them where necessary and providing the advice they need to rise to new challenges.

8. Access to a national and international network

If you choose a part-time CFO or FD from an organisation like the FD Centre, you’ll benefit from the expertise from all the FDs in its worldwide network. That’s hundreds of years of experience in every aspect of finance—all for a fraction of the cost of employing a single full-time FD.

9. You won’t get left behind

If you’re still hesitating about whether now is the right time to hire a part-time FD/CFO, consider the sorry tale of Kodak—a company that got left behind, despite once being one of the most powerful companies in the world.

Kodak was once known for innovation (being the creator of the Box Brownie camera, Kodachrome film and the Instamatic).[2] Here’s what’s remarkable—a Kodak engineer Steve Sasson developed the world’s first digital camera way back in the mists of time (actually, 1975). Okay, it was the size of a toaster, took 20 seconds to capture low-quality images which had to be viewed on a TV. But still… it had the potential to disrupt the market massively.

The company poured billions into developing the technology to take photos using mobile phones and other digital devices but delayed acting on it due to fears digital technology would destroy its film and photographic developing business. It failed to act fast enough and to identify the opportunities posed by digital technology.

On January 19, 2012, Kodak filed for bankruptcy protection in 2012, then exited its legacy businesses and sold off its patents.[3] It re-emerged in 2013, albeit in a vastly slimmed down version of its former self.

If you want to avoid becoming a post-script or salutary tale in your market, appoint a part-time FD or CFO. He or she will provide you and your team with strategic help and advice to recognise threats and to seize opportunities—thanks to vast experience and expertise.

The FD Centre offer the services of part-time FDs or CFOs with big business experience who can use what they know to help your company achieve rapid yet sustainable growth. What’s more, they’ll help remove fear, confusion, and stress from the entire process.

To discover how the FD Centre will help your company to scale up, call us on 0861 127 280 or contact us here.

How it works

The FD 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’s finance function and identify every problem area.

They will help you to understand your company’s finances and not only eliminate cash flow problems and identify cost-savings but also to 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 find out how an FD Centre part-time FD or CFO will help your business, contact us now on 0861 127 280. 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.

What people are saying

People are talking about what they really think of The FD Centre’s part-time FDs. Find out what they’re saying here.

Where are you going wrong?

You can identify strengths and weaknesses in your business in just nine minutes with the F-Score click here now. 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?

Have a burning question for one of our team of FDs? Just ask it here, and you’ll get an answer within 24 hours. The question must be finance-related (sadly, they can’t predict who will win Wimbledon).

[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] ‘The Moment It All Went Wrong for Kodak’, Usborne, David, The Independent, https://www.independent.co.uk, January 20, 2012

[3] ‘Kodak’s Downfall Wasn’t About Technology’, Anthony, Scott D., Harvard Business Review

https://hbr.org, July 15, 2016

Where to find the cash you need

A lack of cash can not only stall your company’s growth but also place its very existence under threat.

It doesn’t matter how profitable the business may be; cash flow problems can place it under severe pressure, according to the FD Centre’s Chairman Colin Mills in his book ‘Scaling Up How to Take Your Business to the Next Level Without Losing Control and Running Out of Cash.[1]

“You might think you’re immune from danger because your business is experiencing a high level of growth, but you’re wrong: expansion can exacerbate the problems caused by poor cash flow management,” he said.

“You almost always have to make investments and bring certain expenses on ahead of achieving the higher revenue and cash flow that comes with successful growth.”

It is the oxygen every business needs to survive.

“The stark truth is, without cash your business will be unable to meet its payroll obligations, default on payments to suppliers and creditors (payables), and ultimately cease trading.”

Fortunately, there are ways to find cash both from within your business (by improving processes, cost-cutting and selling off unused assets) and from traditional and alternative external funding sources such as banks, invoice factoring companies and crowd-sourcing platforms.

Getting the cash your company needs earlier rather than later can not only save you and your employees from unnecessary stress but also help you to achieve more rapid growth as the following example illustrates. One of the CFO Centre’s American clients had over-hired which caused it to run into cash flow problems.

But with the help of the CFO Center, the company was able to survive the blip and then attract one of the ‘Big Three’ automobile manufacturers in the US—Chrysler—as a client.

“They were really bumping up against their credit line of $US500,000,” recalled the CFO Center’s Bill Starr in ‘Scaling Up. “We came in, restructured their financing and their forecasts, and in a couple of months we were able to get them a new line of credit for $2 million,” he said. “That effectively allowed them to invest in the growth of the company.

“A year after we were engaged, the client won a massive deal with Chrysler. Chrysler conducts vendor analyses on the financial position of its vendors, and this company got a green light across all areas that Chrysler reviewed them on.”

Look within your company first

While many business owners automatically look to external funding sources, it pays to look closer to home first.

“Most entrepreneurs don’t realise there is often considerable funding to support growth from within their own business,” says Mills. “That’s because the collection of customer receivables can often be improved through strong credit control and the level of stock holding reduced through improved systems and processes. In some instances, poor negotiation of supplier payment terms means fewer funds are available within the business to support scaling up.”

So before you pick up the phone (or click your mouse) to apply for external funding, consider the following methods for freeing up cash within your business.

Declutter

If the business has machinery, equipment or large amounts of stock that is idle, consider selling it or renting it to other businesses.

Remove unnecessary overheads

Look at all your overheads to see if they can be lowered. For example, consider reducing staff numbers, or not replacing employees when they leave or moving premises to get a more favourable lease.

The head of the Australian CFO Centre Stephen Copplin recalls how one part-time CFO was asked to help a fast growth branding business that had got into trouble with cash flow. Most troubling was a looming $AUD 500,000 tax bill.

At the company’s headquarters, it was easy to see why the company was struggling: the carpark was crammed with ‘flashy’ company cars.

A conversation with the owner revealed he did not have a good grasp on his financials. He didn’t know how to improve his margins and had no idea how much his product was costing to produce.

So he was advised to sell the cars and make half the staff redundant.

“We were really hard with the guy; we took a firm line with him, but he did all the things we suggested he do to get his business back in order,” the part-time CFO said. “That was three or four years ago, and today his scaleup growth has delivered the cash flow and sustainability, to where he should have been if he had the financial nous beforehand.”

Negotiate better terms with vendors

Ask for more favourable payment terms from your suppliers. This doesn’t necessarily mean asking for reduced prices but could be as simple as requesting an extra seven days for your payment window.

If your suppliers refuse your request, look for other suppliers who can offer lower prices or better payment terms for the same quality of the product.

Resolve late payment issues

Make your payment terms clear to minimise the possibility of late payment issues. Try to keep to the same terms for all your customers (for example, a 30-day window for payment of the invoice). Get agreement to your payment terms from all your customers or clients. Carry out credit checks on all new customers or clients. Ensure that invoices are issued promptly. Ideally, you should issue invoices by email on the day of completion of the job or project and ensure that overdue payments are pursued.

Get deposits for large projects or orders. Build a deposit (of anywhere up to 50% of the total cost) into your contract for large projects or orders. This is especially important if the projects or orders are likely to involve a lot of resources and time.

That way if the customer decides to cancel the project or fails to pay the balance on the project or order, you have at least recovered some of the cost of the resources and time you’ve already invested in it.

Look for External Funding

You should also consider external funding sources to help ease your cash flow challenges. There are a dizzying number of sources to consider, both traditional and alternative (which is why you should use the services of a part-time FD or CFO to identify the best method for your company and help you navigate your way through any such process).

Apply for a bank overdraft

A bank overdraft has been the traditional form of funding for many businesses. But these days, banks are more likely to try to steer their clients to other forms of debt that provide the banks with more security.

While overdrafts are usually quick to set up, they have a major drawback, and it’s this: banks can call them in on demand.

Request a bank loan

The advantages of bank loans are that they are for a set term with regular repayments and that the banks can’t call the money back on demand. The downside is that banks will demand strong security for the loan such as a personal guarantee secured on the assets of the business or even the owner’s personal assets.

Use asset financing

Using your assets as collateral for the loan is one of the easiest ways your growing business can get access to quick cash. However, there is a drawback: not all assets are considered equal.

Typically, lenders will only consider assets that they can sell quickly if you default on the loan. Therefore, they usually want high-value assets with a low depreciation rate or high appreciation rate, and which are easy to convert into cash.

Get alternative financing

The alternative finance market includes a wide variety of financing models including peer-to-peer lending, crowdfunding and specialist finance providers offering products such as selective invoice finance and invoice trading platforms.

The benefit is that since they have greater flexibility than traditional funding sources they can often offer a faster turnaround on the right deals.

Invoice Discounting

The advantage of invoice discounting, in which banks and invoice discounting companies lend money secured against your debtors/receivables, is that you can borrow up to 80% of the invoice amount within 24 hours.  So you get the cash flow benefit and the rest when the money is collected.

The disadvantage is that it can cost more than overdraft or loan charges so it may have a bigger impact on your profit margins.

Peer-to-peer (P2P) lending

P2P platforms match lenders directly with borrowers so that you can borrow money from individuals. The huge benefit of this is that the rates are favourable and often much better than any other type of lending method. The disadvantage is that you will still have to undergo a credit check and possibly pay an application fee.

Equity-based crowdfunding

The way it works is that people come together on the crowdfunding websites to pool money towards a particular venture or idea in return for an equity share in your business. The issue with crowdfunding though is that it’s not as easy as some people make it out to be, as it requires months of planning and lots of marketing in order to get people excited enough about what you are doing to contribute money towards it. There’s also the risk that you don’t receive the amount you’re seeking, in which case any finance that has been pledged will usually be returned to your investors, and you will receive nothing. If you’re successful, there’s the risk you give away too much control in your company. This could have an impact later when you decide to sell the company.

The easy way to raise cash

Of course, you can make the finding or raising of cash a much easier process by engaging the services of a part-time FD or CFO. For example, the FD Centre (and CFO Centres) offer the services of part-time FDs or CFOs with big business experience who can use what they know to help you uncover or obtain the cash you need to help your company achieve rapid yet sustainable growth. They will help remove the fear and confusion from the entire process.

To discover how the FD Centre will help your company to get cash and scale up, please call us on 0861 127 280 or contact us here.

How it works

The FD 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 and not only eliminate cash flow problems and identify cost-savings but also to 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 0861 127 280. To book your free one-to-one call with one of our part-time FDs, click here.

Where are you going wrong?

To identify strengths and weaknesses in your business in just nine minutes with the F-Score click here now. 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 FDs, ask it here, and you’ll get an answer within 24 hours. Please note the question must be finance-related (sadly, they can’t predict who will win the Rugby World Cup, Cricket World Cup or even the US Masters Golf Tournament).

[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

The FD Centre SA

Why and how you should scale up your business?

If you consider what sets companies like eBay, Alibaba, Netflix, Google, Starbucks, Apple, Cisco and Dell apart from other companies, their ability to continuously innovate and create high growth will probably come high on your list.

So should the fact they’ve all successfully transitioned from start up to scale up status without losing their ability to be dynamic and entrepreneurial.

Then there’s the fact they’ve helped create thousands of full-time and part-time jobs throughout the world. Twenty-three-year-old eBay, for example, employs 14,100 full- and part-time employees while Google’s parent company Alphabet Inc. has 88,100 full-time employees.

In his book, Scale Up!, the FD Centre’s Chairman Colin Mills defines scale ups as companies which have grown by 20% a year for a minimum of three years and which started the three year period with a minimum of 10 employees.

Scale ups disrupt and revolutionise entire industries, according to a Deloitte & THNK report. “They embody ingenuity, innovation, and foresight,” its authors concluded after studying 400,000 enterprises worldwide.

There’s a common misconception that only start ups can be innovative, dynamic and entrepreneurial. Yet as scale ups like Google and Alibaba illustrate, that’s far from the case.

Perhaps start ups attract more attention because there’s so many of them: it’s estimated that there are 300 million start ups globally. By comparison, only a tiny fraction of start ups ever survive long enough to make the transition to scale up, according to the authors of the Deloitte report.

“Our research shows that the chances of a new enterprise to ascend as a scale up are around 0.5%, which means that only 1 out of 200 surviving new enterprises will become a scale up. ‘Unicorns’ make up the even smaller subset of scale ups; only 104 start ups are valued over $1 billion.”

Those companies that do become scale ups help to boost local, national and international economies. They provide direct, ongoing employment and that, in turn, creates more consumer spending which in turn stimulates the economy and expands the tax base.

Or as business guru and venture capitalist Daniel Isenberg says in Scale Up!, “One venture that grows to 100 people in five years is probably more beneficial to entrepreneurs, shareholders, employees and governments alike, than 50 which stagnate at two years.”

Contrary to what many policymakers believe, start ups don’t help economies to flourish or cause per capita income to rise.

“The relationship between per capita income and entrepreneurial activity is generally negative, rather than positive as is often believed,” wrote Scott Shane, Professor at Case Western Reserve University, in Entrepreneur magazine. He referenced a Gallup Organisation survey which compared per capita Gross Domestic Product (GDP) with the fraction of the population that reported being self-employed in 135 countries. It showed that the self-employed fraction had a negative linear relationship with the log of GDP.

“That is, self-employment rates are lower in rich countries than in poor ones.”

But growing a company past the start up phase is not without its share of challenges, whether they are related to employees, sales and marketing, operations, administration, or finance. Most importantly, if growing companies don’t have the right infrastructure to support their expanded operations, those challenges can become increasingly severe.

“While on paper, they may have the revenue, the manufacturing base or customer reach of a substantial business, the culture, the controls, the processes, the personnel and the leadership remain those of a much smaller business that they were a short time before,” says Mills in Scale Up!.

“Worse, they haven’t yet accumulated the resources to build and maintain that infrastructure.”

If the situation is not resolved, the business will outrun itself (cash reserves will dwindle as it tries to meet the expanded demands) or get stuck (as the owner and employees find themselves unable to cope with the problems).

But if you revise your business model, you can overcome these challenges or even avoid them altogether.

“You need to consider your whole business model, because if you have a terrible business model, then the last thing you want to do is to start scaling it,” says Mills.

The FD Centre’s part-time FDs or CFOs help clients revise their business model using a framework known as the ’12 Box’ approach.

It has three levels:

  1. Operational
  2. Strategic
  3. Business Support

Operational

This refers to finance operations and focuses on two key aspects: cash and profitability. There are four boxes: Cash Flow Management and Profit Improvement (which generate money), and Internal Systems and Reporting (which generate time for management).

Strategic

This involves your finance strategy: how are you going to finance the business to achieve future cash and profits? The four boxes in this section cover: Risk Assessment, Strategic Funding, Strategic Activities and Exit Planning, and an Implementation Timetable.

Business Support

This involves crucial tasks such as compliance, tax planning and legal issues, banking relationships and outsourcing. In the case of The FD Centre’s FDs (and the CFO Centre’s CFOs), they don’t carry out the tasks but instead, manage the work on a client’s behalf. They’ve built relationships with the right people in each country where they operate so that they can connect clients with the right supplier at the right cost when they need it, and then manage the work on their behalf.

Take the F Score: Find Your Future Challenge Areas

To help you identify which one of these 12 areas is a potential current or future pain point for your business, the FD Centre/CFO Centre has created a quick assessment form known as the ‘F Score’. (It will only take nine minutes to complete.)

The F Score features a series of questions built around the 12 Boxes, designed to identify your areas of strength and those which represent a gap. When you’ve completed the questions, you’ll receive an eight-page report which will reveal your current or future challenges. It will not only rate the performance of your company’s finance function but also uncover untapped opportunities for non-linear growth.

To discover how the FD Centre will help your company to scale up, please call us now on 0861 127 280 or contact us here.

Free 1-1 Finance Session

Do you have a burning question about any of the following:

  • Cash flow management
  • Funding
  • Profit improvement
  • Exit planning
  • Reporting
  • Getting the most from your bank?

Book now for your complimentary 30-minute finance breakthrough session with one of our part-time FDs/CFOs. Get the answers you need to scale up your business.

Ask the FD

If you’ve got just one finance-related question and you’d like us to send it across to our team of top FDs, please let us know, and we’ll get back to you within 24 hours.

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