From Firefighting to an 18% Turnover Increase
A luxury furniture manufacturer with real ambition was being held back by problems it couldn't seem to get on top of.
A luxury furniture manufacturer with real ambition was being held back by problems it couldn't seem to get on top of.
Cash flow was under pressure, the board wasn't functioning well, reporting was unreliable, and three separate IT systems that didn't talk to each other made everything harder than it needed to be. Senior people were spending most of their time firefighting rather than growing the business.
A Fractional CFO was brought in, and the first job was straightforward: get a clear picture of what was actually going on.
The challenge
Ash Tree is an ambitious business; but at the time of engagement, the management team was stuck. Cash flow was unpredictable, the IT infrastructure was a patchwork, and monthly accounts weren't giving anyone a reliable view of performance.
The board wasn't moving in a clear direction, and the people who should have been focused on growth, were too deep in day-to-day problems to lift their heads.
The approach
A full MOT of the business was the starting point - a complete overview which was then presented to the board, and agreeing a plan that was logical and actually achievable.
Some quick wins came early; cash flow management was tightened up, which bought breathing room and demonstrated progress. Longer-term projects ran simultaneously - one centralised IT system replaced the three that had been causing problems.
For the first time, the business had monthly accounts it could trust, a set of KPIs that meant something, and a five-year plan the whole team believed in.
The outcomes
- Turnover grew 18% in the first year
- Three IT systems consolidated into one
- Accurate monthly accounts & management reporting was in place for the first time
- A clear set of KPIs for the business going forward
- A five-year business plan with genuine buy-in from the leadership team
The impact
The owners received an unsolicited valuation shortly after, and it made them smile.
That's probably the most honest measure of how far the business had come.
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Frequently asked questions
Common questions about fractional services and how they work
What’s a CFO, and what do they do?
A Chief Financial Officer or a Financial Director (FD) is responsible for the entire financial function within a business or organisation. Often referred to as a CEO’s righthand man/woman, they are always looking into the future and driving the business forward.
What’s the benefit to a fractional CFO, and how do I know if I need a FT or PT one?
It is recognised that 99% of businesses in the UK with a turnover below £50m, do not require a full-time Finance Director to achieve their strategic goals. Often full time CFO’s within these businesses find themselves doing non-CFO work (finance control work, IT, HR). This is hugely costly to the business. A fractional CFO allows a business or organisation maximum benefits to a business without the costs of a full time CFO. It’s a very cost-efficient way of accessing a superstar CFO without the full time cost. The savings to a business can be enormous (>£100k pa) If you think hiring a superstar fraction CFO is expensive, try hiring an average full time and seeing the value difference…
What’s the difference between a fractional, part-time CFO, interim, external, outsourced FD?
They’re all the same!
When should a company hire a fractional CFO? How do I know if we’re ready?
As soon as possible! We help businesses at all stages, whether that’s a pre-revenue startup, rapid growth, scaling up, cash-flow issues, to successful exit. We have highly successful CFO’s who have stellar backgrounds at all these stages waiting to help.
Can they help raise significant funding and or investment for the business?
Yes, they have a unique approach around building a proposition for a funder and taking the funding project right through to conclusion.
Can a fractional CFO help with scaling?
Yes, they will be advising on every element of the business that can be strengthened to grow the business.
Can a fractional CFO help with exiting/sale?
Yes, typically a CFO will stay with the business right through the whole process, concluding when the money is in the back. To ensure continuity they can also stay on under the new ownership.
Will the CFO’s be qualified?
Yes.
Do they work remotely or in our offices?
They can be flexible as to your needs, working either in the offices or at home or a combination of both.
Do they typically attend board meetings?
Yes, they usually attend, and quite often chair or lead the meeting.
Can a CFO help bring AI automation into the finance team/throughout the business?
Yes, our leaders will be working to ensure the most efficient technology systems are running throughout the business.
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