Why you should or not consider to outsource your CFO ….part 2

Recently I was talking about the idea that businesses need to reinvent themselves and to be very
creative in order to assure their success.

Because of the scarceness of  resources for business ( you never have enough of what you need ) why not go for the outsourcing option.

The outsourcing of topics like Customer Care , Call, Centres, IT , Tech Support, etc  is a very common and widely accepted topic.

What about the outsourcing of your CFO function ?

I am using the term CFO for a senior finance professional or executive

To get a clear answer about this potential , partial or complete outsourcing of your CFO function you must first clarify the following essential aspects:

  1. Do you know what a CFO is doing ? What is the role of the CFO in an business ?
  2. Do you as a business owner realize that your business has grown and that you need a something or somebody to help you more with your business numbers ?
  3. Are you ready to empower and trust somebody to take care about a part of your business ? 
  4. Do you want to move on further with your business ?
  5. Do you want professional help and support for your business support services ?

If the answer to all of the above is YES then definitely you are ready for the outsourcing of some of your support services.

1-st step before going further with this outsourcing is to ask yourself what do you want for your business and what do you expect from an outsourced CFO .

1.1 What do you want for your business ? 

Well this is pretty obvious you might say , you want to develop your business .
This is all fine and fair , the only thing is that you might want to grow in a way that you are certain that you can count on the healthy growth of your business.
This kind of a growth is not easy to manage
…you are right when you say growth is growth ergo it is OK.

Well not really , you must grow in a consistent way and not too fast. The growth rate of your business must be in sync with the rate that your organization can adjust and accommodate the growth.

Consistent growth means that you have to have a pretty good ideea about your business on at least mid term if not long term.  From the CFO perspective this would mean that you have a strategy that will grant you some predictability and easier planning.

1.2  What can you expect from an outsourced CFO

For sure you can not expect , OK small correction , you should not expect that you got rid of your problem, the healthy growth of your business.  It is still you business and you are still in charge and fully liable about what your doing.

This outsourced CFO function can give you as a business owner the breathing space to focus on the actual business development like promoting sales, developing your product and/or services, hire/fire your staff, etc . Don’t worry you still have a lot of things to do ….

From your outsourced CFO you should have at least this benefits :

  1. consistent and clear image of your business results (OK, partially this can be received also from your accountant ) 
  2. “translation” of your financial statements in business terms , not accounts, balanced / unbalanced accounts , formal things , tax statements ( some accountants provide to their customers some of the “translation” but not the complete view ) 
  3. based on  the financial statements the CFO should be able to project / adjust / validate your defined strategy 
  4. you should get a clear and concise cost monitoring system setup 
  5. benefit from your CFO’s experience …that should be at least 10 years in various organizations and business models
In this post will not address the topics who needs CFO services , why CFO services, what services can you actually get  because these have been discussed in previous posts.
My view on CFO services can be found also here . 
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As always any comments , ideas and suggestions are welcome. So feel free to share ( if you like my post) comment and discuss . 

Why you should or not consider to outsource your CFO ….part 1

In the today’s business environment it is not uncommon to have different business functions outsourced.

To have IT, Accounting, Tech Support, Call Centres and Customer Care Support outsourced is no news any more. If you look at big corporations all over the world you’ll see that all of them have most of the support services outsourced in shared services centres that are owned by the corporation or by 3-rd parties.
In the end it depends on the adopted strategy for the specific business model , do you want to be very lean and sleek, you keep only what is strictly linked to your core business.

If you want to present a strong, asset rich and business then you go for the build up of resources and competencies.

Considering the financial world crisis you should be set up as lean as possible, you should want to use your resources for your core business and business development and do not care so much about business support services, you should not concentrate, as a business owner, to much on the support services that need to be there , well to support the business.

No business equals no business support services  


no business support services equals no business

The statement above means that you as business owner should focus on business development that promotes and makes the business go forward.

The smart solution is to buy the needed support services in , at 1-st up to a certain business size go for the outsourcing option of the needed support services. Only when your business has grown to a certain size and complexity it would make sense to hire your own support staff.

As said before , it depends on the chosen strategy for your specific business case.
Both options have their pro’s and con’s. This is only a matter of option.

Assuming that you go for the outsourcing option, let’s go now to a more daring hypothesis.

What about the CFO function complete / partial outsourcing ?

Would you do this kind of outsourcing ?

If yes what activities would you outsource ?

The pro’s and con’s of CFO outsourcing can be many and their efficiency can depend on the way you use the outsourced CFO. 

Most of the outsourced business functions are not business critical and are usually support services. But in the today’s economic environment business need to reinvent themselves and be very creative in order to succeed.

So why not consider the outsourcing of your CFO ?

Who needs CFO services?

At TopCFO, we believe that once businesses get to a certain size, there is a real need for a professional CFO. While we often provide CFO services for mid sized companies, we have partnered with smaller and larger businesses as well.

Engaging a professional company that delivers CFO services can particularly benefit small and mid-sized businesses, which often see their financial situations become more complex as they grow.

Many of these companies don’t have room on their payroll to hire a full-time CFO and lack the in-house financial experience they need to make informed strategic, long-term and day-to-day decisions.

Outsourcing the CFO function is a way to bring on much-needed financial expertise on a flexible and affordable basis.

Contact us to get started with your free one-hour meeting.

Request a first meeting to see how TopCFO services can add value for your business within your budget and timeline

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What to do ? local strategy …..

During my last business trip I got to talk to some senior executives that where complaining about some issues they have at one of their locations from Romania.
Over time I have learned that strategy is extremely important for anybody involved in business environment and not only business.
To be successful you really really need to know what you want and where you want to go.
Knowing this in detail and exactly will help you out in solving any issue you might encounter.
So to come back to the title of my posting. It is given an foreign well established company present in Romania since over 10 years.
The senior management guys that I’ve met complained about one issue in particular, they have one big issue, they have one high headcount turnover.
OK, it is correct that having a big headcount turnover rate is an serious issue.
The high turnover in headcount over the years can hinder a solid development of a company and can seriously endanger its very existence if this topic gets out of control.
It is quite serious when you can not build and retain experience in the company.
How I see it they did not have nor developed any location strategy regarding headcount turnover, they only focused on financial results.
The financial results where squeezed out over time but according to me in detriment of the headcount issue.
What can be done is actually quite simple, the location senior management has to sit together and act on one of the ignored management attributes, develop the strategy .
I agree to the fact that strategy is not directly generating financial results, it is more linked to to frame set-up that enables the achievement of sound and solid financial results.
Getting back to strategy for headcount turnover the important and easiest steps would be :
1. Finding the root of the problem, finding the cause of high headcount turnover at white and blue collar employees.
An easy solution would be exit interviews,  talk to the people that are leaving the company.
2. Try to establish is it only your problem or do the other companies in the area have the same issue at comparable extent.
If its only you than it is obvious something is completely fishy in your organization, try to find out what it is , be honest to yourself.
If the others do not seem to have the same issue , try to find out what are they doing differently, try to see if you can do something differently. You might be surprised….
3. Try to understand the surrounding in that you are active, understand the community , understand their values and what not reassess the local market that you are active in.
You might find out that the values that you knew are obsolete and do not fit to the current situation.
4. Cross-check the findings with your own organizations values , see what is important and act on it. Do not be too shy to admit any potential mistakes that you might have made in the past.
5. Set up a specific clear action plan based and stick to it.
6. Most important Do Not forget to communicate your plan and changes to your staff.
7. Request appropriate feedback from your staff.
8. Do not expect sudden reactions and changes.
After all your action on an issues that has some history in your organization.
I do not know if this is making any sense but to me it is common sense and I am even more surprised that senior management is different companies still don’t get it.
Once I have read something that a smart guy said:

Think global act local , not the other way around.

I would be very interested to know your opinion on this topic.
Feel free to comment or drop me an email.

When life gives you lemmons …..or when my L turned into F

When life gives you lemons …

…as I have found out you have several options.

You can go ahead and make lemonade, meaning you can do the best out of the existing situation.

What if you got from life also a big load of lemons and also a big lemonade ?

What now ?

…or lemonade ….

Well , you can either throw them right back , meaning that you somehow deny what has happened or try to keep up the optimistic point of view regardless of what has happened because life has to go on no matter what …..

Actually you do not have to many choices, you have to get you things together and keep on with life.

It might be hard to accept and it might be impossible to understand what has happened…but in my view you have to keep going.

You might also get very mad about life and “demand to see life’s manager”… but hey what can you do …..it might suck but you gotta love it.

….or both ….

All is getting even more complicated when you get at the same time also a BIIIG lemonade ….somehow everything got much more easier to cope with.

Well it is not that easy to cope with both at the same time, lately I have got exactly this two from my life ….I have got a big , big pile of lemonades but on the same time I have got also an unexpected big and sweet lemonade.

I got pretty messed up coping with this two at the same time but in the end I had to adjust and get on with my life and try to make the best of it.

So to wrap it up …..when life gives you lemons AND lemonade you are in an situation that either your L… (from Luck )  turned into F…. or the other way around. 
It is up to you to get a grip with your life and make the best of it .

Change ….how much ?

Change …how much ? How far should you go ?

Recently I have posted some thoughts about change in the case of senior management / executives.

Fact is that the posting ended with the dilemma “To change or not to change ?

This dilemma is valid for the individual and also for the organization .

Change …how much ?

It is a known fact that when you enter a new organization you have to go through a “accommodation” with each other. In this important period is all about positioning and getting to know everybody and everything.
Now certain “surprises” start to show up from both sides , you and the organization,  Certain things start to show up not as presented.
In this case the first compromises starting to take shape….what should you do ?
Up to a certain degree it is expected to adapt to the new environment and to cope with it.
Now coming back with the senior management / executive aspect, the guy was hired because of the fact that some change was needed.
Important to mention that the guy was hired by stakeholders that are part of the existing organization and that have the means to evaluate and judge the newcomer….
The newcomer has, according to my understanding,  two options:
Change / adjust and give up part of who you are
Fight  and do not get assimilated ( remember Star Trek Borg 🙂 ) try to make a change , try to make a difference.
None of the mentioned options are good or bad, it is matter of what you should choose best.
If you are choosing the first option , change / adjust and try to make out of the trenches some small changes and get set with small but many victories.
Fact though if you try to change / adjust you will be scrutinized by the ones that choose you as a senior manager / executive for their organization .
During this change / adjustment hope that you not loose on the way the skills, aspects that made you appreciated by the organization.
If you decide that you are here to fight and trying to make a change , it is perfectly OK , but fight until when ?
You might get labeled during the fight as not able to integrate into the organization.
What is actually the proper / better way ?  Change / adjust and give up on yourself or fight it through but taking the risk of being labeled as unfit by the stakeholders ?

Change ? How much is enough not to give up on yourself and still to get your recognition as a senior manager / executive in the specific role / organization ?