Moving from a small business to a growth business is a major task. It is a task that often proves too hard and results in a successful smaller business failing as it tries to grow to the next level.

And it should be hard! The rewards for doing it successfully are large. This article will try to keep things simple with a few definitions to start with. There are many definitions but for the purpose of this article they are:

A small business: A business where a small management team, usually including the owners, are pretty much making all the important decisions.

A growth business: A business that as a result of growth strategies is becoming more complex and for which the core management team can no longer successfully make all the decisions.

The reasons for the added complexity include:

• Increasing size of the workforce and the related management issues

• Increasing reliance on the supply chain

• Increased impact of capacity constraints

• Increased need to delegate decision making

• Greater difficulty in gaining clarity over performance at each level

• Increased need to direct scarce resources to the most productive activities

• Greater need for reinvesting capital into the business and maintaining a strong cash position

The Virtual CFO

How can the virtual CFO help you to successfully navigate through all these issues to achieve success in the growth phase? The common strengths of virtual CFOs include strong financial management expertise, extensive industry experience and a clear understanding of the constraints within small businesses.

The virtual CFO will focus on the following areas:

Planning: Forecasting, modelling and budgeting will enable the business to have clear short term & medium term strategies.

Reporting: Regular performance and position reporting enables the business to understand how it is tracking against its plan and to identify those areas that need to be reviewed.

Analysis: Taking a detailed look at what is driving business performance enables management decision making to be focused onto the things that will make a difference to performance.

Focus: These processes will enable management to keep focused on the critical business drivers.

Risk Management: The business exposures to a range of risk areas will be highlighted and strategies developed to manage these exposures.

There is an increasing number of virtual CFOs available to small business. Technology is driving this trend and it is an enormous opportunity for small business to access this low cost option for accessing critical financial skills for their business.