What Good Financial Leadership Looks Like in Practice

What does good financial leadership actually look like inside a growing business?

Many founders reach a point where bookkeeping is under control, management accounts are being produced, and year-end compliance is taken care of, yet they still feel uncertain when making important business decisions.

They know the numbers exist.

They receive reports.

They have visibility of revenue.

But they still don't feel fully in control of profitability, cash flow, hiring decisions, pricing, or growth plans.

In this episode of The Fractional CFO Show, Adam Cooper is joined by Heidi Armstrong, Fractional CFO at ACC Finance Solutions, for a practical discussion about the role financial leadership plays in helping founder-led businesses improve profitability, strengthen cash flow, and make better decisions.

This is a particularly special episode as it marks the first time a member of the ACC Finance Solutions team has joined the show.

Drawing on her experience working with businesses across recruitment, beauty, media, professional services and other founder-led organisations, Heidi shares what she sees when businesses begin to outgrow basic finance support and require more strategic financial guidance.

The conversation explores a common challenge faced by many SMEs.

Business owners often know they need "better finance", but they're not always sure what that means in practice.

Is it better reporting?

More detailed management accounts?

A bigger finance team?

More software?

Or is it something else entirely?

Throughout the discussion, Heidi explains why good financial leadership is often less about producing more reports and more about helping business owners understand what their numbers are telling them and how those insights should influence future decisions.

Topics covered include:

• What a Fractional CFO actually does within a growing business

• Why many founders feel disconnected from their numbers despite receiving regular financial reports

• The difference between financial reporting and financial leadership

• How financial forecasting helps business owners make decisions with greater confidence

• The role of cash flow forecasting in supporting sustainable growth

• Why revenue growth does not always lead to improved profitability

• How management information can become a genuine decision-making tool

• The importance of monitoring financial KPIs that actually matter

• Common reasons margins deteriorate without founders noticing

• Why pricing reviews should be a regular business discipline

• The impact of inflation, supplier costs and overhead increases on profitability

• How hiring decisions affect cash flow, capacity and future growth

• The financial implications of expanding too quickly

• Why business owners should place a value on their own time

• How scenario planning supports better strategic decisions

• The hidden cost of difficult clients

• Why client profitability is about more than revenue alone

• Lessons learned from working across multiple industries and business models

One of the most interesting parts of the conversation centres on client profitability.

Many business owners evaluate clients purely based on the revenue they generate.

However, Heidi discusses why some clients can consume disproportionate amounts of management time, operational resources and emotional energy.

A client may appear profitable on paper but become significantly less attractive once the true cost of servicing them is taken into account.

The discussion highlights why founders should regularly assess not only what clients pay but also the time, complexity, interruptions and stress associated with managing those relationships.

The episode also explores the connection between financial visibility and confidence.

When founders lack clarity around cash flow, profitability or future financial performance, decision-making often becomes reactive.

Businesses delay investments.

Hiring decisions become difficult.

Growth opportunities are missed.

Cash flow concerns create unnecessary stress.

By contrast, businesses that embrace financial forecasting, scenario planning and regular performance reviews are often able to make decisions earlier, with greater certainty and lower risk.

Heidi shares practical examples of how she helps business owners understand the numbers behind their businesses, identify potential issues before they become serious problems, and create financial plans that support both growth and profitability.

The conversation also touches on a challenge many founders face but rarely discuss openly: the value of their own time.

Business owners frequently make decisions without fully considering the opportunity cost of their involvement.

Tasks that appear profitable on paper can become far less attractive when the founder's time is properly valued.

Understanding this often changes how businesses think about delegation, recruitment, pricing and operational structure.

Whether you're running a recruitment business, professional services firm, agency, consultancy, creative business or another founder-led organisation, the principles discussed throughout this episode are widely applicable.

If you've ever wondered:

• What does a Fractional CFO actually do?

• When should I hire a Fractional CFO?

• How can financial forecasting improve decision-making?

• What financial KPIs should I be tracking?

• How can I improve cash flow visibility?

• How do I increase profitability without simply increasing sales?

• How should I assess client profitability?

• What does good financial leadership look like in practice?

This episode provides practical, experience-led answers.

The Fractional CFO Show is hosted by Adam Cooper, Founder of ACC Finance Solutions, where each week he speaks with founders, operators and business leaders about the financial, operational and strategic decisions that shape successful businesses.

Subscribe for more conversations covering financial leadership, business growth, cash flow management, profitability improvement, financial forecasting, strategic finance, management reporting, founder decision-making and the realities of growing a business.

Transcript

Adam Cooper (00:01.676)

Okay, so today we've got a slightly different one. This is the first time we've had a member of the team join as a guest on the podcast and I'm delighted to be joined by Heidi Armstrong, a fractional CFO here at ACC Finance Solutions. I won't embarrass her by saying how long we've known each other, but we've known each other a long time and Heidi works as a fractional CFO with us here. So Heidi, welcome to the Fractional CFO Show. How are doing today?

Heidi (00:30.604)

Yeah, really good. Thank you so much for inviting me on. What a treat.

Adam Cooper (00:34.426)

Thank you for being here. I know this is slightly outside the comfort zone, but we'll make it work. We'll make it work.

Heidi (00:39.566)

All good. All good.

Adam Cooper (00:42.768)

So you've obviously worked in a really interesting mix of different industries, beauty, recruitment, media. So like really looking forward to exploring some of the common themes and differences across those sectors and how good financial leadership looks in those different industries. So maybe to start with, could we just take a couple of minutes, just talk a little bit about how you've got through your career, how you've got to where you are today.

Heidi (00:51.694)

Mmm.

Heidi (01:12.066)

Yeah, absolutely. So if we go back way back when, I studied management and French at university because I was one of those people who didn't know what I wanted to do as a career. And I thought that that covered all my bases. I liked languages and I had an inkling that I wanted to end up in business, but that was just a bit too vague. So we kept options open, studied, decided that actually a sort of strategic focus was probably where I wanted to end up.

but ultimately decided to take an accounting route because I felt like that would give me the kind of strong core and foundations to build on any which way going further forward. So I started work in practice. I worked across all tax and accounts. I then had a very brief stint in investment banking before ending up in media and publishing for about 10 years, which was fantastic. And very much at that point,

where I thought I would be actually working on international strategy, development, and learning an awful lot, both industry specific and more broadly. I then took a career break to focus on family. And it was at that point that I ventured into the fractional CFO world. It was, I wasn't sure at first, but really it kind of gives you the best of both worlds. What I can do is look at the numbers, which is obviously where my foundations lie.

There's a huge amount of strategy involved, lots of variety because you're working across different industries with different clients at different stages of their business. One of my favorite bits is building the client relationship. So actually building quite a personal connection and collaboration with those clients, having hopefully a meaningful impact on their businesses. importantly for me, from a personal perspective, it's about being able to do all of that whilst also

juggling family life and having a degree of flexibility around that as well.

Adam Cooper (03:11.386)

Okay, excellent, excellent. That's a real good overview of how you got to where you got to. That's brilliant. And I think today, what I really would like to do is unpack a little bit about what you've just said there about how you've built those client relationships, how you build them, how you have that meaningful impact. I mean, to start with, it'd be good to understand what it is in terms of...

working directly with smaller businesses, founder led businesses. Like the audience of this podcast tends to be a mixture of finance professionals and founders of smaller and medium sized businesses. So what is it about those types of businesses that appeal to you? Having been in large corporate, yeah, moving to this world.

Heidi (03:57.386)

Hmm. I think it's, um, the smaller businesses in my mind are almost a little bit more exciting because you don't quite know where they're to end up. Typically they are led by business owners or founders who are obviously very optimistic. They're very passionate about what they do. So getting to know them and you know, what makes them tick as well as what makes their businesses tick. Um, I think for me is, is really motivational. Um,

And also I think there's a bit of a niche I think for us, isn't there really? Because if you've got a big corporate, they can afford to have full-time finance teams and CFOs working for them. Whereas actually these guys, they're at a level in their development usually where they do need financial support, but they can't afford to have it full-time. So where we can come in is actually, we can give them a little bit. It's not 24 hours a day, seven days a week, but actually we're there when we need them and you can kind of build up.

surprisingly strong partnership I think even though you're not working full-time with them you can really kind of get to know their businesses and see how they grow how they develop and help with that process as well along the way.

Adam Cooper (05:06.128)

Yeah, absolutely. And interesting what you said there about how they need financial support. Do you find that when you come in and work with a business owner that what they need is different once you're in there? So their expectation of what they need versus what you deliver, do you find that there's a gap there at all?

Heidi (05:28.878)

Yeah, I think often there is. think that sometimes finance gets a bit of a bad rep and I don't know why. you know, I think most people initially start out by thinking they want more. So it's, need more numbers, I need more reports, I need all the complicated dashboards, I need, you know, all of these forecasts. And it's more, more, more. Whereas actually, I think sometimes what we do quite well is we come in and we say, well, actually, hang on a second. What you actually need is a bit more

clarity, let's kind of strip things back. Maybe we need more further down the line, but as a starting point, let's just strip it back. Let's look at perhaps the five or 10 key metrics that are really driving your business. Give you more clarity and a better understanding of those, which will then as a knock-on effect allow you to hopefully make better decisions. You can start running your business perhaps in a more proactive rather than reactive way.

hopefully give the founders greater confidence in the numbers that they're working with because I think often founders can feel a bit disconnected from the numbers. They're quite busy running the business and that's their skill and their skill is not necessarily finance and numbers so their focus is on driving that revenue and making things profitable. So I think actually if we can help make the decision making process behind the scenes a bit less stressful for them

That's where we can actually add a lot more value. I mean, I think, especially for the size of businesses that we typically work with, the reality is they don't need complicated dashboards and 40 KPIs. It's actually just, yeah, a sort of slightly more strict back approach, I think, sometimes works better. And that's not necessarily what they're expecting from the outset.

Adam Cooper (07:20.28)

Yeah, I couldn't agree more. And I think the, that sort of simplicity and keeping it simple is something that we as finance professionals are often guilty of, of not doing. We, we often try, you know, particularly where we're so into a spreadsheet or so into a set of numbers, we, we think that that's what the business owner needs. But the reality, as you say, is, very different. And I, I wonder about the timing of when, you know, you, you get brought into a business, start working.

with a founder. Do you think that founders often wait too long before bringing in that higher level financial support or do you think in your experience what's the sort of sweet spot for when you come in to work with a founder do you think?

Heidi (07:50.616)

Hmm.

Heidi (08:06.348)

a really tricky one because personally, and this is not practical, I love to be involved right from the start because there's nothing better than setting things up in a wonderfully organised way and actually having it all tickety-boo behind the scenes. But you know the reality is that that is rarely the case. In my experience, often we are probably brought in a little bit too late, so things can be a little bit messy behind the scenes. Actually there's a chance that things have gotten

to the point where, we really need to grow now, but actually we don't have the mechanics or the operational, the operations side of things behind the scenes is not organized enough to allow us to do that. So founders have kind of hit a bit of a sticking point, which then can perhaps slow them down a bit because generally speaking, my advice would always be hang fire. We're not going to make any mega strategic decisions here that involve a lot of investment unless we understand what's going on behind the scenes. And we know that that's a viable option.

So yeah, it's a difficult one. And I suppose every business is different in terms of knowing when the right time is, but I would definitely err towards sooner rather than later, just to kind of avoid things getting to a position where it's going to take an awfully long time to fix. I've worked with clients before whereby it's taken sort of six months to tidy everything up almost to get into a position where back to par is something.

I often use and where we're like right now we're good and now moving forward we know everything is streamlined and working in the way we want it to do.

Adam Cooper (09:36.049)

Yeah, no, for sure.

I'm interested, again, with founders thinking they need something versus what they actually need. It's often, you know, the real issue sits somewhere different, right? So you'll go in there and the founder will be like, oh, you know, I'm really struggling with this particular area. And you'll go in there and it's clear to us when you scratch the surface, it's often a blind spot that the founder's not aware of through no fault of their own, just they didn't sort of, their eye is focused on building the business.

Heidi (09:45.037)

Hmm.

Heidi (10:00.611)

Yeah.

Adam Cooper (10:08.28)

experience are the most common blind spots that you've come across that, you know, when you scratch the surface that that often becomes clear. Are there any common commonalities that you see?

Heidi (10:20.654)

Yeah, do you know, interestingly, and I don't know whether this is just a pure coincidence, but the one that I have found across some of the clients that I've worked with is undervaluing the founders time. And I don't know if you've seen the same in clients that you've worked with, but you know, what happens or what I often see is that it's a small relatively new business that's growing. The founder is typically working all hours, putting all the work in, and obviously they're usually very, very skilled. And what they're not doing is

factoring in any form of remuneration for themselves because they're so desperate to get the business up and running and to make it work. And the next stage is they start to look at the numbers and they say, great, things are actually going quite well. Look at this, we're bringing in revenue, we're looking quite profitable. Great, now let's think about factoring in some remuneration from us. And it's got to such a point that actually then that picture changes quite dramatically. And as soon as they start to factor that in, especially if we're talking sort of market rate, whether that be in the form of salary or dividends,

They're back to square one again. And as I say, for me, this has happened numerous times. And my advice would always be don't fall into that trap. It seems to be quite a common one, actually start, you know, maybe it's not market rate from the outset, but certainly factor something in and especially in terms of forecasts, don't wait too long to be bringing it up to something that is realistic, because whilst you might think you're doing your business a favour in the long term, actually, sometimes it doesn't really pan out that way.

Adam Cooper (11:47.729)

I

completely agree. And interestingly, I've worked with a number of businesses where they're trying to sell the business and they've historically not worked with a fractional CFO. They brought us in to help them get ready for that. And they've been looking at their margins, at their profitability without any form of remuneration for themselves. And obviously if you've got someone doing due diligence and coming in to have a look at the business, they're going to want to replace you, to be frank, with one, maybe two, maybe three people.

Heidi (12:02.818)

Mmm.

Heidi (12:07.096)

Yep.

Adam Cooper (12:18.476)

given the nature of what a founder does and that completely changes the view that you have on profit. So I think it's so so true to factor in those a fair salary, fair dividends for yourself as a founder, you know, both to make sure that you're being rewarded for the time you're putting in, you can pay yourself and keep the lights on personally, but also from the perspective of always building your business to sell, having that factored in is so critical. Now that's

Heidi (12:30.594)

Mm-hmm.

Heidi (12:43.32)

Yeah.

Heidi (12:46.926)

for sure. So yeah, think that's the main one. And then the other two, which I suppose are sort of perhaps quite common would be around pricing and pricing reviews and not really actively doing any pricing reviews. So kind of getting a little bit stuck in terms of not updating prices to make them realistic, not perhaps having a brilliant idea of what you know, our competitors are doing.

Adam Cooper (12:48.121)

See you.

Heidi (13:12.398)

And, or again, for newer businesses, sometimes pricing a little bit emotionally rather than strategically with a view to, we're in a bit of a panic, we've got to get lots of clients on board and not thinking things through. So I think that from a pricing perspective, know, recommending regular pricing reviews is something we would always do. And again, it surprised me how many weren't doing this as sort of a matter of course.

And similarly on the cost side as well, regular cost reviews, the number of times, know, it's sort of, it's almost an easy win from our perspective, but coming in and actually doing a thorough review of those costs and making sure we do that annually, because it's incredible actually, when you sort of then present a founder with, well, you know, you're spending 50 quid a month on this, and are you actually using it? And then, God, no, we haven't used that for, you know, for a long time. And it sounds marginal at 50 quid a month, but actually, if there are a handful of those, and if you then add them up, the cumulative effect can actually be quite significant.

There are bigger examples as well of course but it always surprises me how the small stuff sometimes has the biggest impact.

Adam Cooper (14:15.162)

Yeah, those are two very good examples. think the particularly in the environment we're in at the moment where inflation is creeping up and the macroeconomic conditions are so variable, pricing is a particularly important one because obviously if you've set your prices a couple of years ago, inflation has eaten away at that. And as you say, founder led businesses are often not the best at knowing what their competition pricing, they might emotionally know it, they might have done research.

Heidi (14:36.59)

Hmm.

Adam Cooper (14:45.106)

at the outset when they started up, but it's not something that they're doing on a scientific basis on a regular basis. So you're right, having a regular price review, regular cost reviews, so critical, so critical. No, that's super, super helpful. And I wondered like from the perspective of the founder having confidence in their numbers, you know, and what is it, you know,

You said before about 40 KPIs or 40 key metrics and trying to keep it simple. How do you balance that? Because there'll be some founders that you'll work with who are so comfortable with their numbers and they want literally every detail and want to run through every single metric and give you 40 metrics before you've even started working. And then there's right at the other end of the spectrum where there's some people who will not have an accounting system or not open any books will not be interested. How do you personally with the businesses you work with,

Heidi (15:20.173)

Yeah.

Heidi (15:26.894)

Mm-hmm.

Adam Cooper (15:44.16)

find that right balance.

Heidi (15:46.905)

think it's reading the room really, isn't it? And at the end of the day, we are there to provide a service and we want to provide the best service to our customers that we possibly can. But equally, I think we're also there to challenge assumptions a little bit and to push back. That's part of our job in a nice way, of course.

I think that there are some businesses I work with who very much like a hands-off approach and they like that simplistic, know, just give me the bare minimum that I need to run my business so that I haven't got to spend hours pouring over the figures. Absolutely fantastic. know, great, that's what we can do. That sort of aligns with my ethos. As you say, there are the polar opposites who really want to dive into the nitty-gritty and have all of the KPIs and the dashboards and the metrics.

And I think for those ones, it's absolutely providing them with what they need. But I suppose trying to teach them along the way, you know, happy to provide all that information if we feel like it's adding value. So I suppose almost showing them, well, okay, let's pull it together and review it. And if we feel after a couple of months, it's really not adding any value and we're not using it in a beneficial way, then

let's try and think about that objectively and actually the time and the cost involved in a putting it together and be reviewing it. Does it make sense to continue and kind of actually just taking a sort of step back a bit? I think sometimes having that that external third party view on things can be quite helpful in that regard to founders and business owners, because it does make them sort of

question things a little bit more that perhaps and again I think we can all fall into the trap of we did that before so let's just carry on doing it and by bringing someone new in you can kind of say well yeah okay we might have done that before but perhaps we don't need to anymore for these reasons and you know it's it's it's questioning everything to make sure that there is value in what we're preparing and providing for all involved.

Adam Cooper (17:47.697)

Yeah, definitely. And I think it's so important to remain flexible with our approach as fractional advisors, CFOs. Not every client is the same and having a templated approach that works across the board is not realistic. So you need to obviously have your foundations as finance professionals, as qualified accountants. We have those, but then it's being flexible and reading the room, as you said before, meeting them where they are and ensuring you're treating each client individually.

Heidi (17:53.368)

for sure.

Heidi (18:14.339)

Hmm.

Adam Cooper (18:17.68)

So I think that's critical. I'd like to change tax slightly and we'll talk about growth because obviously, you know, lots of the businesses that we work with come to us because they're growing and that's great, but it can obviously hide quite a few problems as well.

Heidi (18:18.2)

very much so.

Heidi (18:22.702)

Hmm!

Heidi (18:36.376)

Yeah.

Adam Cooper (18:38.308)

And you mentioned something before that I think is a critical factor that we need to always help our founders and clients work through growth around, is forecasting. So you mentioned about, you know, forecasting being providing that visibility.

And I wondered particularly around periods of growth or periods of change, how important you find sort of that regular financial forecasting, budgeting, re forecasting, how important is that during those periods of growth periods of change?

Heidi (19:12.054)

I it's really important. I've banged on about keeping things simple and not overdoing it, but I do think having a forecast in place and reviewing it regularly for me personally is critical. And again, it amazes me how many businesses don't necessarily have those in place. But again, I think it's not just about the numbers, it's the story behind those numbers. So absolutely having the forecasts in place, but

reviewing them and understanding what's going on. So it is looking back historically, which I know sometimes people can say, that's not, it's not so great. But I do think it's important to look back historically and say, okay, well, this is what happened compared to our forecast and why and understanding why so that either we can do something about it and change it if it's negative or we can replicate it and do better or do even better if it's positive. But I think it's using those forecasts as well to help us with

you know, adding more value in terms of say, for example, scenario planning and saying, okay, well, these are our forecasts. And, you know, depending on your industry, but you know, I worked with a client in the past around, you know, opening a new location, for example, and actually kind of looking at the various scenarios. Okay, first of all, you know, if we open a location in London versus in Manchester, how is this going to look? What sort of a pipeline do we need in terms of, you know, members for that location in order to make it viable and

putting all the different scenarios through and using those forecasts, both historical data and what we think is going to happen in future with our existing business to help us make decisions with growth strategies, whatever they may be.

Adam Cooper (20:48.228)

Yeah, no, that's really interesting. And I wondered about...

scenarios because we that's something that I don't think I've ever come across a client who's done that themselves, right? So clients will often do a forecast, do a plan at the beginning for sure. Then there's the re-forecasting and doing that, you know, maybe after three months, after six months reviewing, as you say, how the year to date has gone. And then, you know, what does the rest of the year look like? But scenario planning, that's not something that the business owners are that comfortable with. I mean,

mean, again, I guess going back to an earlier point you said about complexity, that is starting to get more complex. So how do you manage that with them to sort of not, you know, it's a new concept to a lot of them. How do you get them comfortable with scenario planning, thinking about kind of trying to read the room like you said before?

Heidi (21:35.566)

Mm-hmm.

Heidi (21:44.079)

Yeah, well, yeah, I suppose it depends on the client, doesn't it? Some want it as simple as possible and others actually really want to dive into, you know, all the little different things that you're going to factor in. Personally, I do like, you know, whilst it is quite complex and you might have a very complicated model behind the scenes, which is doing all the, you know, the calculations. You know, for most clients, I would not show them that in-depth model behind the scenes and it would be a nice, simple summary page whereby you can actually just say, okay,

as simple as this, whether it's one new location versus two, or whether it's hiring three people versus one, or the timing of those hires, the timing of those openings, keeping it quite high level at first, at least. And again, showing them the benefit and perhaps making it as easy so that they can actually make some tweaks and changes as well and very quickly see what impact that has so that it becomes a tool that they can play around with themselves.

should they say which and some do and some don't. Again, it really does vary. You do have to, as we say, go back to that read the room. You sort of got to work with your client and understand them and their needs. But yeah, I'm always there for the slightly more simple, straightforward approach. Let's not get too carried away. Maybe we start with not changing too many variables and go from there. You can always add complexity further down the line if needs be.

Adam Cooper (23:08.048)

Yeah, now you said a few things that really struck a chord there, is, you know, keeping at high level, having a summary that they look at and then the more detailed model, which you don't necessarily work on with them every day in every meeting. It's just, this is the summary, this is the high level. And then as you say, some clients will want to go into that level of granularity, but I would always encourage you to try and keep it high level because again, what's the ultimate objective? It's not making the perfect spreadsheet. It's making sure that they're able to make clear

Heidi (23:22.318)

Mm-hmm.

Adam Cooper (23:38.036)

decisions.

And then again, like you say, they can play around to keep it simple, have a, an input field or set of fields where they can change variables. And then they've got the summary sheet where they can see it and then it allows them to make those decisions. Now that's super helpful. And you said they're about hiring, you know, with your scenario planning and the three versus one, et cetera. Yeah. That's often one of the biggest decisions that a founder has to make. And it can often be emotional as well as financial.

Heidi (23:50.677)

Exactly.

Heidi (23:58.127)

Mmm

Heidi (24:01.987)

Yeah.

Heidi (24:05.902)

Mmm.

Adam Cooper (24:09.66)

you know, there.

Heidi (24:10.12)

yeah.

Adam Cooper (24:11.064)

looking at, you know, giving away a part of their business. I don't mean in terms of equity and options, which obviously can be part of it. I'm talking about giving up a bit of control and, know, early stage entrepreneurs are not the often the best at giving up control. Right. How do you help them with that? You know, and I'm not talking about like emotionally how you help them deal with it, but just how do you help them approach that decision financially to make sure they're at the right place?

financially to make that hire.

Heidi (24:41.742)

Hmm.

Yeah, it's an interesting one. And again, numerous times I've seen this go terribly wrong. think perhaps because those decisions are made quite emotionally and actually often what you might find is a founder is stressed or overwhelmed or scared and, my God, we need to bring someone on board because we can't handle this. And, you know, there's a lot going on behind the scenes and decisions can often be made based on that rather than on the numbers.

or on the flip side, perhaps an overly optimistic approach. says, yeah, great. Everything's hunky-dory, brilliant. Of course, we can afford this very expensive new hire to pick up the slack when in reality that isn't necessarily the case at all. So I think it's often a case of thinking about each hire, particularly I'm talking more now the high-end hires rather than more junior, but treating them as investment decisions really and actually looking at it financially and saying, well, okay,

For each hire that we make at a certain level, we need to ask certain questions. So we need to ask, you what problem is this person going to solve? What does success look like? You know, both from an intangible perspective, but also in terms of what financial return are we expecting from bringing this person on board? And perhaps the most important one would be around from a cost perspective, you know, let's say we don't grow in quite the way we think we're going to, can we comfortably absorb that cost or not?

because actually if growth doesn't happen as quickly as we think it might and we bring this person on board and actually the returns aren't as good as we think, then how long can we afford to keep them for or is it going to affect, is it going to squeeze those margins too much? I think there's generally a delay, isn't there? I mean, don't know what the average, I think, it can be up to six months, I think, in certain industries whereby you bring someone on board and obviously there's quite a significant outlay for at least six months before

Heidi (26:37.334)

you might actually see any returns from that person having joined, then there's all the associated costs in terms of their training, management time, in terms of bringing them up to speed, software equipment, so on and so forth. So it is very strategic. And again, I think where we can help is actually trying to take some of the emotion out of it and look at it in a little bit more of a black and white way in terms of, okay, you know, what are the expectations around this financially?

Adam Cooper (27:05.774)

Yeah, I think you've said so much interesting stuff there. I think particularly around one doesn't think about some of those complementary costs, I'll call them, like you said, they're around the time to train management time, software time, national insurance, pension. People will often look at the salary, right? They'll benchmark the course salary, but not necessarily think about all of those other associated costs. And I think that what we can do is finance strategic finance

Heidi (27:16.248)

Hmm.

Heidi (27:24.056)

Yeah.

Yeah.

Adam Cooper (27:35.691)

as professionals is have conversations around the return on investment and the time it takes to achieve that return on investment and look at it as an investment decision as you say, take some of that emotion out of the conversation. Now that's so helpful. I think just changing onto, I mentioned at the outset your

Heidi (27:41.838)

Mm-hmm.

Heidi (27:51.394)

Yeah.

Adam Cooper (28:00.027)

professional career and how you've worked across an interesting mix of industries, which is quite unique, I think, in terms of going from investment banking to media to beauty to recruitment. That's pretty wide range. What do you think? Are there consistencies like how people think about business across those industries or are they massively different? What are some of the sort of commonalities and similarities and differences that you over your career?

Heidi (28:01.87)

Hmm

Heidi (28:09.132)

Yes.

Heidi (28:25.122)

Hmm.

Yeah, it's a really interesting one. I think, you know, thinking more of the sort of smaller kind of startup, you know, growing businesses that I've worked with, it's sort of probably slightly easier to kind of compare because again, when you kind of take the big conglomerates and try and compare them with the small ones, are fewer similarities for sure. In terms of working with smaller growth driven businesses, this is going to sound awful. And I hope no one takes this the wrong way. But actually, I have often found that the founders across all these businesses do tend to avoid the numbers a bit.

And I don't think that's because they're lazy or irresponsible or don't necessarily want to, but I think it's because they're quite overwhelmed. know, across all the industries I've worked across, founders are very, very focused on their business bit. And for many of them, and again, this is by no means, you know, overreaching, but, know, the finance side feels a bit too technical. I've worked with some who feel like they're almost a bit scared to look at the numbers because they don't really necessarily want them.

to tell them something they don't want to know, or they don't even know where to start with them. So I think that's definitely a common theme. I think the challenges they face are also very similar. although they can be quite different in terms of how they're run. don't know, let's take, for example, you've got beauty, you've got recruitment, and you've got like an agency.

business. So three quite different industries. And if you look at the cash side of things for them, they're very, very different in terms of how they run. So from a beauty side, you've got your cash, generally speaking, coming in immediately a point of sale, relatively low value typically compared to, for example, recruitment, where your cash is super high value, much less of it coming in in terms of, you know, the number of times it comes in over the course of the year, it's quite lumpy, it's quite unpredictable. But when it does come in,

Heidi (30:22.156)

you're talking big money. And then you've got your agency world, which is of mixture between the two. So you might have your retainers, whereby you've got your smooth revenue and your projects, which are a bit more lumpy. the way the cash works and the way you have to manage your business is quite different. But the challenges are the same. And in the sense of, you've still got to stay on top of your cash, you've still got to stay on top of your forecasts. The challenges around growth.

and not growing too quickly are the same because again I think that's a common theme that I see in terms of businesses trying to grow a bit too fast without having that necessary sort of the operations and the support and the sort of safety net in place underneath. And the other one actually I've seen is around

A client dependency, so depending on one or two key clients and having that sort of all eggs in one basket type approach, which obviously increases risk. And again, I've seen that across all three of those industries. And also perhaps not looking at the quality of your clients. So you can have some really high revenue clients.

who might actually create a huge amount of strain and that's really difficult for a growing business to manage and again that was sort of the same across all of those industries whereby you've got this brilliant client that might bring in lots of revenue but behind the scenes they negotiate heavily, they demand loads of discounts, they've got terrible billing terms so they pay late so your cash is never guaranteed, you're not quite sure where that money is coming in, you know they're constantly negotiating to get a better deal, they're going after your competitors.

And actually, yes, the revenue might be good, but the pain behind the scenes and the unreliability and the risk involved is high. And if that does happen to be one of those clients that you're very dependent on, that adds even more stress to the equation. So I think that sort of client management and looking carefully at that is another one that I've seen across very different industries.

Adam Cooper (32:23.118)

Yeah, that's super relevant. We're working with a client at the moment where we're really diving into their client P &Ls. So looking at the client profitability, because you say that revenue hides a multitude of sins. And so just looking top line at what client is the largest and what your top 10, 15, 20 clients are from a revenue point of view, doesn't give you that sort of view on quality and doesn't hide where margin is getting eaten up by those difficult clients. I think it's so important to focus on

Heidi (32:30.862)

Mm-hmm. Yep.

Heidi (32:42.318)

you

Heidi (32:52.162)

Yeah.

Adam Cooper (32:53.801)

dependency as you say on key clients but also the client quality and the stress and time that is taking up in your business and that's consistent across all of those businesses that you mentioned and industries that you've worked in so now that's super helpful and cash I'm so glad you said cash

Heidi (32:58.094)

Yeah.

Heidi (33:07.331)

Yeah.

Yeah, yeah.

Adam Cooper (33:12.238)

particularly at the moment, know, like cash is so important and you I've had clients who go into different industries where cash flows are totally different. They might go from a service based business to a product based business, or they might go to a service based business that's all digital to one that requires a lot larger outlay as they start opening up in different countries or different offices. And so that focus on cash, you know, it's so easy to open up zero and look at your P and L or to go to your bank.

Heidi (33:41.944)

Yeah.

Adam Cooper (33:42.162)

account and look at the statement but you need to look at cash flow and cash flow forecasting because that will help you encapsulate you know those different types of cash flows and frequencies and lumpiness of the different types of businesses.

Heidi (33:56.527)

Absolutely. And the number of times that again, you know, for very, I've worked with some very small clients who are just starting out. And if you don't have a finance background, you know, there's no wonder it's confusing, but you know, who was suddenly like, Oh my God, I'm suddenly hit with a 70 grand VAT bill, you know, I hadn't thought of that into the equation. And it sounds straightforward to you and I who, you know, work in finance, but again, you know, if you don't, it's really, I think, eccentric, the importance of having those forecasts in place. So you kind of know what's what's coming.

Adam Cooper (34:24.88)

100%, 100%, that's super interesting. okay, well, we've reached the section of our podcast, which I like to call the business book bonus section, which is where we ask our guests to recommend a book or a podcast or some other resource that they found useful and has helped to shape your thinking during your career. So Heidi, is there anything that you'd like to recommend to our audience?

Heidi (34:34.39)

Mm-hmm.

Heidi (34:50.414)

Well, the podcasts I'm listening to at the moment are all about training puppies. So that's probably not overly relevant to this audience. But I did read a book recently actually, and it's not a business book per se, but it does have relevance. And I've actually found it quite helpful both in my personal life and in my professional life. It's called Feel the Fear and Do It Anyway by an author called Susan Jeffers.

Adam Cooper (34:54.96)

There's lots of dogs around so it might be very relevant, but yeah, I'll tell you a point.

Heidi (35:17.262)

quite an old book actually, and I would say some of the ideas are a bit dated and I don't necessarily agree with all of them, but as a high level principle, I think there's a lot to learn from it. And her message at a high level is you very rarely feel fully ready to do a difficult thing, and whether that be personal or whether that be professional. And a lot of us take the approach, well, we'll just wait for the right time. So we'll wait until we're ready. We'll do a bit more preparation. And what she explains is, well, that's a trap.

because you're actually never going to feel ready, especially if it is quite a big thing and quite a punchy thing and you're kind of pushing yourself out of your comfort zone. So the whole argument is the confidence comes after you take action. And what you have to do is you have to trust and have confidence in yourself to not necessarily succeed, but to handle whatever the outcome is. So whether the outcome is positive or negative, I trust that I actually have the ability to deal with that. And therefore,

that's gonna push me to do those slightly braver things. This is somewhat contradictory to my professional approach as an accountant, which tends to be quite erring on the side of caution and questioning all decisions. But I do think that it does translate quite well into business because, you know, as a founder, you might sort of be putting off having a difficult conversation with a client, for example. There's clients we were just talking about, and actually they're being a bit sort of

being a bit difficult and you want to put a price increase through, but you've been putting off having that conversation or, know, again, maybe it's difficult conversation with a staff member, letting go of poor clients that you actually, they just don't fit well with your business anymore, confronting issues that you might have with your cash flow. There's sort of lots of things that you might be putting off doing until the time is right when actually the time will never be right and you just have to take the plunge and do it. So I think, I don't know, that's...

That's my recommend. And here I am doing a podcast, you see? There you go. There we go. That sums it up, doesn't it? I'm pushing my boundaries.

Adam Cooper (37:14.832)

I like that. You felt the fear and you did it anyway. Very good. So I like that. Okay, that's great. I'll put that in the show notes for everyone listening. And before we wrap up, is there anything that we haven't covered today or where can people find out more about what you're doing professionally, any sort of links or anything to plug?

Heidi (37:39.17)

Not many, can find me on LinkedIn. I think, yeah, for anyone thinking about going down the fractional CFO route, as I say, it's certainly worth considering, you know, would say if plugging ourselves and what we do as a business, you know, hopefully we can kind of create a little bit more clarity, a bit more calmness. We're kind of there as a partner to make sort of make, you know, help make those business decisions a little bit less lonely sometimes, which as a founder, when you're doing it alone can be, you know, can be quite difficult. So, and, you know, we're nice and we make finance approachable.

That's what we aim to do anyway.

Adam Cooper (38:11.342)

Very very good. Well thank you so much. I really appreciate you facing your fears. Talking with you today on the Fractional Civilisation, I really appreciate your insight, your perspective and your time. Thank you, Heidi.

Heidi (38:22.703)

Thanks very much.