A new U.S. Bank survey of large-company CFOs has found that, as new challenges loom- from inflation to the effects of the war in Ukraine - many CFOs are shifting their priorities. The survey results indicated that many financial leaders are focusing on risk and cost management and away from growth.
How do these trends translate to small and medium-sized businesses, like the ones that FocusCFO serves?
"We’re seeing a slightly different version. Risk Management, or de-risking the small business, is always top of mind for our CFOs as we build sustainable, transferrable value in the business," said Brian Ford, a FocusCFO Area President in the Nashville area. Fractional CFOs, like those at FocusCFO, are working with their SMB clients on "making the business healthier through improved cash flow and access to capital, which, in turn, de-risks the business and positions it for growth. Although many companies are in a cost-cutting, hunker-down mentality, we challenge entrepreneurs to think about investment growth opportunities. In doing so, the company is more nimble, faster, and stronger to come out of any downturn."
Ford also highlighted that talent acquisition and hiring continue to be a challenge for SMBs and larger corporations alike. "Many SMBs at this size are under-staffed, rather than over-staffed right now. We are evaluating new technologies to help our clients scale with the existing team, while also looking for new team members."
When it comes to retaining talented employees, Nashville Area President Jason Dean points to the CFO's ability to help small businesses create sustainable employee bonus plans to help drive growth. "When it comes to retaining talented employees, I find that some business owners think that they can't afford employee bonus plans," says Dean. "In their book Profit Works, Alex Freytag and Tom Bouwer show that it is possible to build a motivating employee incentive plan that increases profits."
While CFOs of large companies may be shifting focus from growth to reducing business risk, small businesses should focus on making the business healthier through improved cash flow and access to capital, while also looking for innovative ways to scale the existing team and attract and retain new talent.
If this level of financial planning and strategy is out of scope for your organization, consider bringing on an embedded fractional CFO to help your company on the path to sustainable, transferable business value. Learn more or schedule a consult.
Brian Ford and Jason Dean are Area Presidents providing support to small businesses in the Nashville Metro region.