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Goran Sugarevski, Founder and Director of BGH, provides his insight into the future disruption to SME.

How has Covid-19 disrupted traditional Executive roles?

Adapting to these unusual times is something small to medium size business owners are having to negotiate quickly. It is with that in mind that the role of a Chief Financial Officer is more crucial than ever. The essential role of a CFO is to drive the success and direction of a business through Strategy, Optimisation and Growth.

Over the past 6 months, I have had the opportunity to have countless discussions with SME business owners to gain an understanding of what their issues are and in particular, what do they need to improve their business and take it to the next level. The responses came as a surprise to me, not because I didn’t expect there to be a need for professional financial support and guidance, but what surprised me was the consistency and the extent of that exact need. They all seem to seek the experience and business knowledge of someone to guide them through the fast and ever-changing environment without knowing where to start. It’s the experience of survival and recovery tactics, the type of experience and training that their Tax Accountant cannot provide, but a CFO definitely can.

The unfortunate part of this kind of demand is that the majority of small to medium size businesses do not have the funds or the resources for a fulltime CFO. With the vast majority of Australian businesses being small to medium size, there clearly needs to be a shift in the availability of support to this sector. Considering just over 90% of all Australian businesses are turning over less than $3m, it’s no surprise that only 2% of businesses have a CFO.

The role and responsibilities of a CFO, should not be confused with that of a Tax Accountant. Tax accountants are focused on servicing your tax needs including saving you tax and ensuring that you are compliant with ATO requirements. Whilst this is vital to a business, the role of a CFO is to drive financial performance including tactical and strategic advice; improving cash flow and working capital; forecasting revenue, costs and cash; and providing insights into improving profitability and shareholder value. These are completely different areas requiring a different capability and toolset.

Most SME business owners see their business as too small for a full time CFO or Financial Director however, taking into consideration the changes that are set to be released after the Covid-19 pandemic dust settles including the financial support and recover plan that the Australian Small Business and Family Enterprise Ombudsman and the government are working on, SME’s must be ready to progress and achieve significant productivity and employment growth. With this in mind, a commercially minded savvy financial expert such as a CFO, can add a huge amount of value to the growth and performance of a business. Considering the room for future growth of SME and the support that they will require, the availability of an experienced CFO consultant, whether it’s once a week or once a month, is vital. Whilst SME’s profits may not be bursting at the seams, the lure of a part time CFO consultant, could be the way of the future.

The world is forever changing and new methods of operation are rapidly increasing. The disruption of organisations such as Uber, AirBnb, Airtasker – they are all operational and wildly successful and the reason is that they have given permission to consumers to function outside of the norm. They are fast growing businesses and very lucrative because they have provided a product or service that was already in high demand with limited and restricted competition. Taking into account that Australia is the land of small to medium businesses, why should the professionals on executive levels only be available to the small percentage of larger businesses? One CFO or Financial Director could potentially help hundreds of small businesses in a year, if their time and experience is distributed as a consultant. That idea excites me and appeals to my genuine desire to optimise SME businesses and support the owners to achieve their full potential.

It is with all of this in mind that I am excited to announce that Biz Growth Hub now has a CFO consultancy service.  We want to do our part in keeping Australian SME businesses alive and well by providing the CFO support that will transform SME businesses through strategy and optimisation. 

 

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