19 Feb 2024
After a period of growth, you may be wondering whether or not it’s time to hire a CFO for your small business. On the one hand, CFOs offer top level financial advice and expertise that can take your business to the next level, but on the other, they are expensive and you may not be ready to commit to an in-house hire.
What is an Outsourced CFO?
An outsourced CFO works part-time with you, and usually remotely. This means that you have access to expert financial guidance as and when you need it, without the commitment or cost of an in-house hire. For many small businesses, this is a convenient and affordable option that can really take them to the next level and transform their profit margins.
Let’s take a look at how an outsourced CFO can drive up your profits and transform your business.
Labour Cost Management
As your business grows, you will need to take on more team members and the cost of this can be very difficult to manage. Timing is crucial. If you hire new staff too early, you put your cash flow in jeopardy. However, if you hire too late you will antagonise your existing staff by overworking them and compromise the quality of service your customers receive, too. A virtual CFO can optimise your hiring process by helping you to understand when it makes financial sense to hire and when to hold back.
Debt Management
Whether you currently have debt or it’s part of your growth strategy, an outsourced CFO will prove instrumental in helping you to manage your credit well.
A significant amount of debt can really eat into your profits. An outsourced CFO will create a debt reduction plan to get you back on track and maximise your margins.
Meanwhile, if you anticipate going into debt prior to a period of growth, your CFO can devise a strategy to mitigate the risks and optimise your liabilities to help you achieve your goals.
Budget Tracking
Many business owners create a budget, only to get side-tracked and forget all about it. An outsourced CFO can not only help you to craft a realistic business budget that supports your goals, but analyse your actual reports in order to track how well you are sticking to it. This data can then inform future planning, help you make well-timed investments and allow you to create more accurate financial forecasts.
Cost Control
In order to maximise your profits, you need to keep your costs as low as possible without compromising your business. An outsourced CFO can help you to implement efficient cost control by identifying costs that you can reduce and carefully tracking your variable expenses. This gives a significant boost to your bottom line as well as improving your cash flow.
Planning for Growth
A lot changes as your business grows. If you fail to prepare properly, you might find yourself face-to-face with a financial disaster. The financial acumen of an outsourced CFO is invaluable when you are preparing for growth. Their vast experience allows them to offer expert, impartial advice, act as a well-informed sounding board and help you avoid financial pitfalls.
Summary
If your business needs financial guidance but you’re not yet ready to hire an in-house CFO then outsourcing is a fantastic solution. This gives you access to top-level financial advice that will steer your business towards success without breaking the bank, thus maximising your profit margins.
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14 Nov 2023
We often hear about technology stealing jobs and making certain industries redundant. However, technology can also greatly enhance and improve your organisation, and drive your profits through the roof. By digitising your small business and using automation to streamline processes, you could see a huge increase in profitability. Here’s how to harness the power of technology and boost those margins.
1. Improve Efficiency
As your business grows, it is necessary to streamline processes in order to increase efficiency and save time. Today’s technology, such as business process management software and customer relations management solutions, allow companies to optimize their business procedures. This makes it easier to restructure and automate repetitive processes, cutting down on both man-hours and mistakes.
2. Better Customer Service
Technology allows you to provide excellent, round-the-clock customer service without breaking the bank. You can use chatbots to answer customer queries or outsource chat support, so that you can be there for your customers 24/7. You can also offer your customers omni-channel support which syncs all communication channels together, creating a seamless and more efficient experience.
3. Remote Working
Technology not only allows you to improve your business, but to save money whilst doing so. One significant way to do this is by offering remote working. Research by Forbes found that staff who work remotely save their employers an average of $22,000 per year. On top of this, a study by Stanford found that remote employees are 13% more productive, take fewer sick days and report higher job satisfaction. Therefore, employing technology to encourage remote working can help you get more out of your staff whilst saving significant money.
4. Reduce Costs
Technology also offers small businesses many money-saving benefits beyond remote working. For example, switching your landline to Voice over Internet Protocol (VoIP), which works via your internet connection, can save you significant money over time, as well as encouraging more efficient communication.
You can also use automation to fulfil menial tasks to save man hours and free up staff time to focus on high priority, profit-generating duties. You can automate many different office tasks, including:
- Filtering applicants when hiring
5. Improve productivity
Productivity is directly related to profitability. As discussed, technology can make employees more productive by facilitating remote working. However, there are many other ways you can harness the power of technology to increase productivity. For example, technology can allow you to gamify your office, which helps to motivate employees. You can also use gamification to increase participation and engagement rates in online training and courses.
You can also use collaborative software and tools to encourage organisation and consistency amongst your workforce. This is particularly valuable when employees are working remotely, as it ensures that everyone is on the same page and feels valued and involved.
6. Smarter Marketing
Technology can really enhance your marketing and help you to get more out of your budget. It can help to create personalised marketing campaigns and allow you to split-test your marketing materials to fine-tune your strategy and find out what works best for your business. It’s also possible to use artificial intelligence to gather data on your target audience and thus create more accurate marketing campaigns that speak directly to them.
Summary
Technology can enable you to build a faster, better and more profitable business, driving your costs down whilst increasing output. On top of this, technology can help you increase sales by helping you create more targeted and impactful marketing campaigns. If you’re serious about driving up your profits, it’s time to take advantage of all that modern technology has to offer.
If you’d like to speak to us about how we can support you with your accounting needs, book a free consultation here.
4 Aug 2023
Money leaks in your small business eat away at your profits without you even knowing about it. Even if your business seems to be in great financial health, you should regularly check for leaks to ensure that you’re not unwittingly wasting money. Plugging money leaks can help to reduce your spending and thus boost your profit margins without too much extra work on your part. Here are the most common money leaks to look out for, and how to fix them.
1. Online Advertising
It’s easy to let advertising fees get out of hand. Social media pay-per-click fees may seem small, but they do add up and can present a significant money leak for your small business. Keep a close eye on any social media or Google advertising campaigns to ensure that you’re not running up a big bill. It’s also important that you regularly review the effectiveness of these adverts. If they’re not bringing in business, they’re a wasted expense.
2. Subscriptions
At some point, we’ve all signed up for a free trial with no intention to continue, then forgotten all about it and ended up paying. Other times, we stop using a service but forget to cancel the subscription. It’s all too easy to let your business leak money this way, but it all adds up. Review your subscriptions regularly and promptly cancel any that are no longer benefiting you.
3. Power Usage
Small mistakes like leaving the lights on overnight and forgetting to switch off devices may not seem like a big deal, but over time they can seriously eat into your profit margins. It’s important to get into good energy saving habits and encourage your staff to do the same.
There are many other ways to cut down on electricity usage, such as investing in insulated blinds or switching to energy-efficient lightbulbs. Although these changes do present an upfront cost, they will save your business a significant amount of money in the long term.
4. Office Supplies
It’s easy to go over-the-top with office supplies, so take some time to assess what is and isn’t necessary. Thousands of multicoloured sticky notes are fun, but they’re hardly a necessary expense. Furthermore, many businesses waste a lot of money on printing, which is easily avoidable in the age of cloud-based software.
5. Credit Card Fees
Being lax with your credit card payments is a surefire way to create unnecessary costs. By clearing your balance each month – or at least as much as possible – and paying attention to any annual or hidden fees involved, you can save your business money and boost your profit margins.
When signing up for a credit card, don’t get distracted by the attractive rewards. Make sure that you read the fine print and understand the fees before you choose a card. This will help you to use your card wisely and avoid any money leaks.
6. Smartphone Bills
If you’re not keeping a close eye on your smartphone bills, you could be paying a lot more than necessary. Make a habit of reviewing your charges every month to ensure that you and your staff aren’t exceeding your plans. Take a close look at your usage, too, because you could be paying for more than you’re actually using. It’s also worth shopping around regularly too to see whether or not you could benefit from switching plans or providers.
It Pays to Plug
By plugging these common money leaks, you can cut down on costs without making any real sacrifices. Regularly checking for leaks helps you to make your business budget go further, so make sure you don’t grow complacent. Get into the habit of regularly performing basic checks to maintain a healthy profit margin and prevent your business from losing money.
Did you know we’ve also got a free downloadable eBook dedicated to the most common profit draining mistakes made by small businesses. Check it out here.
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