Scaling With People
Tired of spinning your startup wheels but never gaining traction? Buckle up, founders and CEOs, because this podcast is your rocket fuel to profitability! Every week, we ignite explosive conversations with bold-faced founders, brainy experts, and even a few out-of-this-world vendors. Get ready to crack the code on growth, master employee engagement, and blast through your scaling goals. We’re talking real-world strategies, actionable tips, and perspectives that’ll make your business do a cosmic dance. So, strap in and prepare for lift-off!
Scaling With People
Unlocking Financial Strategy: Kevin Appleby on Startup Growth, Fundraising Expertise, and Future CFO Development
Unlock the keys to propelling your business forward with strategic financial insight in our latest episode of Scaling with People. Featuring Kevin Appleby, a visionary in finance team development, we explore the critical juncture when founders should bring finance experts on board. Discover why delegating transactional finance tasks early can free you to concentrate on transformative activities like investor relations and product innovation. Kevin sheds light on the indispensable role of strategic finance expertise during pivotal fundraising phases, from crafting dependable financial forecasts to leveraging industry contacts for securing funding. This episode is your guide to understanding how integrating finance professionals into your startup can provide a compelling strategic edge.
In our deep dive into professional growth, we spotlight Grow CFO’s Future CFO program, a unique 12-month experience designed to catapult finance professionals into top-tier leadership roles. Through practical, interactive workshops held over Zoom, this program equips aspiring CFOs with crucial skills, while we stress the importance of nurturing existing talent alongside new hires in rapidly scaling companies. From our conversation, learn how hands-on experiential courses can transform finance roles at every level, from controllers to seasoned CFOs. As a founder, I share a crucial lesson on embracing flexibility and strategy pivots to drive business success. Tune in to tap into insights that could redefine your approach to financial management and career advancement.
Welcome everyone to today's Scaling with People podcast. I'm Gwenavera Query, your host and founder and CEO of Guide to HR, so I got to ask are you aware of when you should be bringing on your finance experts and what level you should be doing so? If not, stick around. I have Kevin Appleby on the call with us today and we're going to be talking about that. So, kevin, welcome and tell us a little bit about yourself.
Speaker 2:Oh, thank you for having me on the show. Gwenevere, We've met before because you've been a guest on my podcast.
Speaker 1:And thank you so much for that.
Speaker 2:The Gross CFO Show, where we podcast specifically to finance leaders, and that's all part of the wider business of Grow CFO, which is about supporting the development of finance people. So we have as our members people who aren't yet CFOs but want to get there, people who are CFOs who want support, and because those people that are CFOs said, oh, thank you very much for my personal development, what can I do about developing my team? We've got a lot of people in finance teams around in Grow CFO as well, so we know an awful lot about finance roles, the sorts of people that do them, the levels of people and how to get skills developed and make your finance team better.
Speaker 1:So you're the right person to ask that question as a founder who's starting to build their business, maybe they're just, you know, pre-seed, maybe they're series A or B. When you're thinking about bringing on a finance person to help you, when you're just your first finance person, what does that look like? When should someone pull that trigger? Kind of give some framework in helping our founders that are listening today about how to think about a finance support.
Speaker 2:If you're a founder, you need a finance person of some sort almost from day one, because you have accounts to produce, you're handling money, you're handling sales, you're handling costs, you're hopefully making a profit, you've got a cash flow. Okay, now you want somebody to deal with all of the transactional work that goes behind that. So right at the start, you need somebody to handle transactional finance.
Speaker 1:And I would even say that's important because, as a founder, that's the last thing they should be doing is anything transactional, tactical. They should be focusing on conversations with investors, building the product or services or whatever they're doing in their business and finding customers or clients.
Speaker 2:Oh, exactly, exactly. And now, at that basic level, you don't necessarily have to employ a finance person. There are plenty of firms that will outsource that basic bookkeeping. You can find a bookkeeping provider who will do all of that stuff, who will effectively you send them the invoices. They'll possibly even as you, as you bring other people on board, they might even run payroll for you. They'll do all of those transactional sorts of things.
Speaker 1:So as you get bigger, you might consider employing one yourself, but you don't have, yeah, and I even know that some of those companies or vendors also could be your CPA, your tax people too. So a lot of times, as a founder, it's really beneficial to think about how can you use one vendor for multiple purposes so that you're not dealing with 20 vendors. You may be dealing with only four.
Speaker 2:Yeah, I just say be careful, because your CPA may want to charge you a lot of money for those transactional services.
Speaker 2:They may be expensive in that area. Now they've got very, very qualified people who want to do a certain high level of work for a very good salary, so that's reflected in the rates they charge. You Look for an organisation that's specifically doing transactional finance, that's doing bookkeeping, that can run your QuickBooks, your Xero, whatever your accounting system might be. But the real question comes to when do you need different finance support when? When is transactional support not enough? Okay, and that can vary. And one place that it's certainly useful is when you start getting into fundraising. So you might want to go for possibly you're all right at the seed stage, but you might be getting towards a Series A or something like that.
Speaker 2:Now somebody will need to put together some credible forecasts for your business, some credible financials that reflect what's in the business plan. In the business plan, you're talking to the investor about a five-year plan for your business or a 10-year plan for your business into which you want them to to invest. So you want some numbers that show what those five years might look like, what's the, what's the likely outcome, and you probably want somebody who can model a number of scenarios what is good, what does very good look like. What does very bad, look like what's the middle ground and then can articulate to the investor the story behind those numbers. Now, that's that started to get into strategic finance. It's not the sort of thing that your transactional finance person will do.
Speaker 2:Okay, this is about taking the existing numbers. It's about looking into the future. It's about getting your crystal ball out and gazing into what's going to happen and making some credible assumptions and turning those into detailed forecasts of profit loss accounts, cash flows, balance sheets, so that the investor knows what to expect. And if you're going into that sort of exercise as well, you probably need to put together a data room full of documents, that the, that the investor can look at. And again, the, the, the ceo, yes, may provide some of that, but the ceos out there looking at the future, talking to customers, doing other high value things, it could well be the finance person. Is the, is the person that does the detail of putting that data room together for you to support. It's likely that a you know a finance person coming on board as well, has the contacts that are really useful during a fundraising process. Because question one, we're doing series a. Okay, we need some funds.
Speaker 2:Who are we going to ask for those funds from okay hopefully the finance person can at least start to give you a, a list of people that might be interested in funding your type of business or will know people who can introduce you to the right types of people. Okay, so I'd say that's. That's number one. If you're coming into a fundraising position, you probably need that strategic finance person. Um, I'd also say that if you're in a place that the business is a little bit volatile, you need to manage cash. You've got a risk of of running out of cash now. A finance person who can put together forecasts for your business is very useful. Okay, they can look and say, well, here are the targets we've got to hit. Here's where the problems are going to come up if we don't hit this level of sales. Here's where the cash is going to run out. And you've got that ongoing view into the future coming from somebody who's a little bit strategic finance.
Speaker 1:They'll forecast together that run alongside your growth strategy, for example yeah, and they can also can be a really good partner to you as a founder who may you know, maybe, just like I know I need to spend money to make money, I need to get this done, I need to get that done, and you know they're the ones that would well hold on.
Speaker 1:Let's be more strategic about how we're going to spend this money, cause you know money is money, is not infinite. So it can be a really good business partner to you to help you stay focused, help you really recognize how you're going to use your resources and make sure you're using the resources the right way to get to the end results you want and not end up where you're like well, I put all these eggs in 10,000 baskets hoping that some of them would hatch, but I ran out of money to even get to the point where I could warm them up. So, like you know, that's really important to have that person who's going to help you not go too crazy, because I know founders I'm a founder myself like we have our dreams, we know what we want to do, we want to do everything yesterday, but having that partner to kind of keep you grounded and focus is really important.
Speaker 2:And it's worth remembering that one of the key reasons for business failure isn't not making a profit, it's running out of cash. You can have quite a profitable business that runs out of cash and therefore you can't trade.
Speaker 1:So having somebody who's really got their eye on the cash is very useful and, speaking about that too, I feel like a good finance partner is also going to help you. Really think about how you're making money in the business and projecting potential other different ways to do so, instead of like making money because we're going to provide services, which then ultimately I receive the money after the fact. Let's also add another variable where maybe I can get money up front to help fund the growth of the business right and the different ways that you can make money. I think that's another really important conversation to be had. I know a company that didn't think about that and, you know, brought on a CFO too late in the game and the conversation started to be had, but it was already too late and ultimately they had to sell and they didn't get to do what they really wanted to do because they just didn't think about how they could make money in a way that's going to be long lasting and agile and scalable.
Speaker 2:Yeah and we talk about oh, we need a CFO. But we should ask the question as well what sort of CFO do we want? Broadly, I see three types of CFO. There's, first of all, there's, let's say, the the operational cfo, who's probably running lots of things, is looking after parts of the business probably aren't just finance. It could be looking after legal, could be looking after property, could be doing all sorts of things like that. And the operational cfo is generally person who's pushing change in the business, streamlining operations, making sure everything flows nicely. Then there's the strategic CFO, who I describe as the sorry. The strategic CFO who I describe as the co-pilot. To the CEO it's the CEO's right-hand person yeah. To the ceo it's the ceo's right hand person yeah, that person can add quite a lot, because you've got a second brain thinking about which is the right way to do things yeah, and being able to bounce ideas off of and get a different perspective sometimes we're just so stuck in our head, you just need someone, someone to come along and knock us silly.
Speaker 1:Okay, yeah, yeah.
Speaker 2:Now the third type of CEO is what I'd call a Wall Street CEO. Okay, they are probably jumping between mergers and acquisitions and fundraisers and that general buying and selling of businesses raising money talking to the banks is the stuff that really lights their fire. Ok, and they just do that kind of stuff. I'd say the generalist that does the whole lot is fairly rare. You've always got the CFO, will have a leaning to one or more of those, but getting all three is probably quite rare yeah ask the question of well, what do we want going forward?
Speaker 2:are we growing by acquisition? And a very fast way to grow a business could be by acquisition of your race and funds. You buy something, you streamline it. You. You buy something, you streamline it. You could buy something else. You combine those businesses together.
Speaker 2:You want probably a good operational type CFO if you're going to look at streamlining those services and combining them all together. If it's really about frequent deals, well, you want more of a Wall Street CFO. Okay, it depends what you're trying to do as a business. The other decision to make is do I want a full-time finance person or do I want a part-time finance person? And the thing to bear in mind that's become really, really common in smaller, fast-growing businesses is the fractional CFO. We can't afford a full-time CFO. This person is expensive. Ah, we can afford a fifth of a CFO. So we can ask a CFO to come along for one day a week and give us that strategic advice. Now we talked right at the beginning about transactional finance. The one thing that is going to stop the fractional model working is if suddenly that CFO type person gets loaded with transactional finance work.
Speaker 2:So true. So you know, make sure when you're hiring the CFO whether it be a fractional one or a full time one make sure you've got your transactional finance sorted first.
Speaker 1:Yeah, it's all about making sure you set up the people to be successful, being able to accomplish what you need them to do, and that goes beyond just this role, every role you hire, right, like you don't want to bring someone on and expect them to be able to, you know, run the ship, but the ship hasn't yet been built. How can they run anything that hasn't been built? Right, yeah, yeah, now another thing that we the ship hasn't yet been built. How can they run anything that hasn't been?
Speaker 2:built right, yeah, yeah. Now another thing that we see quite often in gross cfo is that the small company that's that's growing, they hired a controller. The controller is sorting out all of the transaction finance but is increasingly being pulled in by the ceo to help with some of the more strategic things. Now we see that frequently and actually that's the reason. In Grow CFO we run the Future CFO program and that typically is controllers who want to step up. Some of the people on there are already doing the number one in finance role, but it's not a cfo role and it's that challenge of how do I get to the next level.
Speaker 2:So we take folk on our future cfo program. It's a 12-month program. We take them through 12 two-hour sessions, going through a journey to really equip them to take the top job. So one thing to bear in mind. I'm saying that's necessarily right for all the CEOs in the audience today to be putting their controller onto our future CFO program. But the thing to remember is that if you're growing a company fast, you need to develop the people you've got as much as you look to hire the new ones.
Speaker 2:As much as you look to hire the new ones, okay. So I really really believe that you should be spending a decent amount of money on the development of your finance people, and that's something we we're really passionate about in grow cfo, we've we've actually just introduced a whole series of experiential learning courses. Oh, oh that's great.
Speaker 2:Working in the same way as the Future CFO program, which is all about two-hour workshops. They're over Zoom rather than the classroom because of the difficulty of getting people together in diverse geographical places, but they might as well be classroom-based training, because that's all that's internet about them. We insist on cameras, on yeah, it's breakout rooms, it's discussions, it's very much two-way stuff and what we're finding is that sort of training for finance people. They come along on a course, they talk about some very practical stuff and they pick up skills like that that actually they're coming back and they're implementing the next day in the office I'm a firm believer in learning from other people's successes and mistakes and everything in between.
Speaker 2:Yeah, no, the, the, that we. We started doing it with kind of three boot camps. We had the FP&A boot camp, which is all about financial analysis. It's all your people that play with spreadsheets and forecasts and crunch the data all day. How do you develop people in that area? So we developed a boot camp for those folk and brought them along and it's where the big programs are running for them along and it's where the the big programs are running for a year and it's to workshop every month. The boot camps. We said, no, this is a workshop every week. You know, if we're going to do four or five workshops to our workshops, we're going to run those over not normally five week, five weeks. We leave a gap around month end because we know that people just won't show up during that particular month no, kidding no we probably run a.
Speaker 2:We'll run a five or six workshop program across two months. Um, and what we're finding there is you. You take people through those sorts of programs and they just show up in the office the day afterwards and they're doing different stuff. So we, we did fpna, we did business partnering. How do you teach transactional finance folk to become business partners, to have the strategic discussions with the rest of the business, to give financial advice and realize that one of the big things that's happening at the moment, particularly with ai and automation, is finance transformation. Everybody is trying to streamline their finance systems. How do you do that? So we started a finance transformation boot camp, same sorts of things, the idea being that the, the cfo, who may have a team of three or four people, would bring them along on the boot camp and we collectively train the team and how to do finance transformation. It's probably for bigger companies than the ones that are listening into this podcast today, but what but aspirational for those listening, that they want to grow their company this large.
Speaker 2:Actually, we then started thinking about that and said, hang on a minute, we need to break this down. Even in a big company, everybody in the finance team is in a different place.
Speaker 2:We can't be expecting a company to be ready to go and take five seats 10 seats on a finance transformation bootcamp. They might have one seat on that, but they probably have a couple of people that want a seat on something that's a lot more basic than that. So the idea of our experiential learning model is originally Growth. Cfo was a membership and all the courses were online self-serve. So now we've said, okay, you buy a membership, we'll give you 24 credits. 24 credits you can then exchange for 24 hours of workshop-based experiential learning, that's great.
Speaker 2:And you can choose. We've now put together a syllabus of about 30 plus courses, so according to your development needs, you choose which ones you want to spend your points on. So it now works for anybody from controller level through to experienced CFO. So if you're listening to the podcast, you want to develop your controller yeah get them along to us and buy an experiential learning package.
Speaker 1:Well, there you go Awesome. So, kevin, I want to flip the script here for a second, because you are also a founder. You've built this business and I would love to just hear from you as you've been growing it, because these are new things that you're offering since you and I've last talked. What are? Uh, could you, would you be willing to share a lesson learn as a founder yourself and grow in your business that we would love to share with those listening to hopefully help them learn from a lesson that you've had to go through and hopefully not do the same thing, gosh the biggest lesson we've learned, and it comes back to the experiential learning that we've just launched.
Speaker 2:We've tried lots and lots of things and the key challenge has been okay, we initially we want to take this to a seven-figure business. Now the question is we want to take this to a nine-figure business? Don't be afraid to pivot, to change and to say say, if something is working better than what you thought was the bedrock of this business, move to it. Yeah, just recently we've we've really challenged again what is it that we should stop doing in the business?
Speaker 1:as much as we start doing doing in the business as much as we start doing. I think I love this. Start, stop, continue, exercise. It really makes you be thoughtful deep, dive into what's working, what's not. What could we continue to grow?
Speaker 2:yeah, yeah, yeah, yeah, it's stop is a very difficult decision to make because you get emotionally attached to stuff yeah it could be very powerful for your business too yeah, yeah.
Speaker 2:The head says stop, says carry on, yeah, and if you've got multiple people in the business, certain individuals will be wedded to certain things. Okay, and as you try to make that stop decision, they'll give you every reason in the world why what they're doing is an exception to the strategy you now want to pursue, and you you've got to learn how to bring people along on that stop journey. The stop doesn't necessarily mean oh, we're not doing that anymore, you're out of a job. It's sorry, we're not doing that anymore. We'd like to redirect you into this particular field. Let's have a talk about that. This is exciting. How can you really be part of this and contribute to it?
Speaker 1:Yeah, yeah, so important. Well, thank you, kevin, so much for sharing that lesson learned and, as we wrap up for the day, any other thoughts or tips or tricks you'd like to throw out to the audience.
Speaker 2:Gosh, just don't leave it too late to bring a person on board. I've seen far too many organizations that have done that.
Speaker 1:Yeah, absolutely Same with HR side. In the world of fractionals, you can get somebody on board early yes, absolutely, and again, that could be such a great partner for you thought partner, financial partner, but business partner, like everything, uh. So thank you so much, kevin, appreciate your time and for the audience. I hope you got a couple nuggets out of the conversation and we look forward to seeing you on the next podcast. Until then, have a wonderful uh day evening, wherever you are in the world. Thanks, guys, bye.
