What is a Virtual CFO? And how can it help your business?

We get it. Running a business of any size is hard work… and to top it off, the more successful you become, the harder a business is to manage.

Did you know that less than 5% of businesses within New Zealand turn over more than $5 million per year? Crazy right? Today, $5m is not a lot of money – yet so few businesses in New Zealand have the structure in place to make it there.

We all assume that if we continue working hard, the time and freedom to enjoy the simple pleasures of life will naturally come. However, more often than not, without a clear vision in mind with the right path and tools, most business owners end up in a worse-off situation than if they had a salaried job.

At GS, we noticed a pattern in the type of help clients ask for – whether that be on an ongoing basis or for ad-hoc challenges – and thus, our VCFO package began to make a lot of sense.

So, what is a VCFO?

VCFO means Virtual Chief Financial Officer. Simply put; a VCFO is hired as an on-call external resource to oversee and manage all the financial operations of an organisation. They provide effective financial guidance and strategic analysis to support a business on an ongoing or project-type basis. Your VCFO could work with you weekly, monthly, or quarterly for business management and advisory, and the service offering is highly tailored.

To give you an idea of some things that a VCFO is trusted for, and what we can help with:

1. Capital Raising or Debt Structuring
2. ESOP and Succession Planning
3. Board and Shareholder meetings
4. Management Reporting – cashflow, budgeting, performance, and KPI tracking
5. Ad-hoc specialty reports such as Valuations
6. Being your full finance team – from strategic management through to IRD compliance and bookkeeping

What are the benefits?

The most immediate benefit that resonates with a lot of people – is that even small-to-medium businesses can have access to top-tier advisory. You don’t have to be a large corporation to take advantage of highly skilled advisors with board-level financial experience. In fact, having a Virtual CFO offers a completely unbiased professional opinion. You get to work with a team who engage with multiple businesses handling a range of different challenges, at a fraction of the cost.

Our VCFO team consists of board level financial advisors, strategists, accountants, business coaches, entrepreneurs, and investors. This means you’re getting a higher level of industry expertise than you might from an inhouse advisor.

What these benefits mean for you:

• The confidence to make better decisions
• Gaining an outsider’s opinion and a fresh set of unbiased eyes
• On-call advice
• Custom reports with information that’s actually useful
• Reduced in-house staff remuneration costs
• Cost savings and revenue growth
• Improved stakeholder relations
• A relationship and service that grows and matures alongside your business

What I personally love about the business environment today, is how accessible and accepted it is to utlise a network of people who are all experts in their chosen fields. It’s changing from the need to do everything yourself, to a culture that values collaboration. Focus on what you’re good at, and work with people who love doing what you don’t enjoy – that’s how businesses grow at rapid rates.

Our clients often enjoy only having to deal with just one team/person, having peace of mind that everything is sorted. As we have an accounting team, tax specialists, and an advisory team – it makes it easy to know that you have the right people on the job, without having to worry about who does what.

Is a VCFO what you need?

Well firstly, as you now know, there is no predetermined checklist of the services that a VFCO can offer. As the service offering holds such a wide range, a VCFO can really be beneficial to almost any business.

Okay – that might sound a little bias, and maybe it is – but to simplify it, I’ve listed eight situations or challenges that a business can find themselves in, where we believe a VCFO can be extremely beneficial:

1. You’re a new venture – there are endless things to work through when getting a business off the ground. Whether its strategic forecasting, raising capital, or streamlining processes to ensure you’re meeting targets.
   
2. Bringing on new shareholders/expanding. Alignment is key here. When learning to deal with new shareholders, staff, or other stakeholders, most people walk into a relationship with their goals already in mind. A VCFO can help ensure that everyone is getting the information they need and outline areas of focus so that the business can continue moving forward.
   
3. You already have a bookkeeper and/or accountant, but you’re not getting the financial management advice you want or need. This is an extremely common issue. Often businesses hire accountants with the expectation that they’re getting a VCFO type of engagement. Not all accountants are equipped to provide this service. To make good decisions you need more than bookkeeping and some rinse-and-repeat reports! 
   
4. Preparing to sell. You’ve done your dash. You’re over it. Now its time to amp it up, increase revenue, decrease costs, and make it as attractive as it can be for future buyers.
   
5. Disputes. Internal or external disputes can suck up all of your time and energy, and often becomes so distracting that you don’t know where to apply yourself. We will help manage the day-to-day issues along the way and have our own team who are experts in dispute resolution – no matter what the issue.
   
6. You need board or governance support. This can be advising you on how to differentiate or separate the operational from the strategic direction/oversight of the business, and/or helping set up a board. This can be tricky to do well, and is often neglected by a lot of businesses.
   
7. You’re facing a challenge. For example, poor liquidity, shareholder relations, bank requirements… Or perhaps you don’t even know what the challenge is yet – but you just know something is NOT working. A VCFO can help you identify what may need tweaking.
   
8. You simply want to focus elsewhere. Whether you have the skill or not… Handover the stuff you don’t enjoy to someone who is trusted and experienced. Work together at growing your business and apply your time to areas that you love.

Again, there’s no one-size-fits-all. So, if you don’t quite fit into one of the categories above but are thinking about getting your own VCFO on board – don’t be shy to reach out for a chat. 

In closing

Give yourself the ability to make quick decisions with confidence, alongside a capable team with unbiased guidance. Be challenged by someone who asks the right questions. Get the comfort and peace of mind that someone is keeping an eye on possible financial threats.

If any of the above resonates with you, don’t hesitate to get in touch with us to learn more. We offer free no-obligation chats and take “finding the right fit” very seriously. That means you can trust us to tell you whether or not we think a VCFO will truly benefit you, and if so, whether or not we think we would be the best fit for you. We love helping businesses through challenges – and the best way to start a relationship is by being real and upfront.