How a Part-Time CFO Can Navigate a Crisis

Fail to prepare. Prepare to fail. Your c-suite team should always be thinking of the future, including how to navigate a crisis. The current market instability shows just how vulnerable industries and companies can be. Hiring a part-time CFO is the best way to navigate a crisis, whether it’s supply chain issues, cash flow problems, or recession planning.

SMEs and start-ups can find themselves vulnerable to crisis, including the impending recession. Hiring a part-time CFO is an investment in the company’s future and one that can enable them to navigate almost any crisis. The evolving role of CFO makes them vital to helping a company survive a crisis.

A CFO is a second-in-command to the CEO, providing them with financial insight and forecasting that is vital to creating a sound strategy. Navigating a crisis isn’t easy but planning and forecasting can make it easier to accomplish.

The role of CFO is never more important than during a crisis. You want to recruit a part-time CFO you can rely on to see your company through the good and bad days. Recruiting on a part-time basis means that it’s no longer just multi-national organisations that can take advance of the skills and experience of a CFO.

It’s never been more vital to have a CFO on your time. If the last two years have taught us anything, it’s that a crisis is only ever just around the corner. At FD Capital Recruitment, we’re working with SMEs and start-ups to connect them with part-time CFOs to prepare them to navigate crises.

We’re sharing how a part-time CFO can navigate a crisis and the benefits they’ll bring to your business on a day-to-day basis.

Part-Time CFOs are ‘Chief Future Officers’

CFOs have evolved beyond being number crunchers and financial wizards. They now engage with every aspect of the business, from supply chains to investors and employee retention. The position has now earned the nickname of ‘Chief Future Officer’ due to a CFO’s role in preparing the company for its future growth.

A part-time CFO can deliver the same results for an SME or start-up as a full-time CFO. The financial forecasting and data insights of a CFO allow companies to prepare for and navigate crises. A skilled CFO can also help companies avoid a crisis by conducting an internal audit to identify potential issues and vulnerabilities.

Most companies view their CFO as the second in command to the CEO and their chief advisor. CEOs feel more supported and prepared when they work in unison with a CFO. It’s not uncommon for stakeholders and investors to rally behind a CFO and view them as a stabilising force. The CFO is the eyes and ears of external partners.  You might be interested in CFO Headhunters.

The forecasting and strategy of a CFO will enable a company to react to industry changes and navigate a crisis.

CFOs Abandon Assumptions

How does a successful CFO navigate a crisis? They abandon assumptions. If the last three years have taught us anything, it’s that everything is possible. Building your strategy around assumptions of an economic upturn can leave a company unprepared for market instability and global events.

Relying on assumptions of previous market and industry behaviour can cause companies to overspend and not prepare for the future. CFOs who have their fingers on the industry pulse will be able to account for potential supply chain issues and market instability in their forecasting.

Not every crisis is internal to a company. CFOs must account for potential government action, whether it’s altering corporation tax or offering industry-wide grants. The recent energy cap was something most CFOs wouldn’t have predicted six months ago, but it has had a major impact on the overheads of companies in dozens of industries.

Abandoning assumptions means companies can pivot during a crisis to explore potential growth opportunities. An external crisis isn’t always bad news for a company. The 2008 economic crisis provided an opportunity for small mortgage lenders, while the electric vehicle industry is seeing a shift in consumer behaviour due to the current cost of living crisis.

Pre-Emptive Crisis Planning

Crisis planning is one way that CFOs pay for themselves. We’re seeing an increase in companies choosing to hire CFOs to avoid being caught off guard by changing economic and global situations. A skilled CFO will implement scenario planning to prepare your company and put systems in place for every eventuality.

What sets specialist CFOs apart is their ability to account for industry and company-specific risks, such as consumer behaviour and supply chain. A CFO will navigate a crisis by developing a ‘war room’ within their company, whether it’s a physical space or using planning software. They’ll work closely with colleagues and c-suite leaders to understand the issues facing the company and industry at large.

Cash Flow Crisis Strategy

A CFO must be prepared for every possible scenario. Their survival strategy will account for every cash-generation scenario, including cash flow and liquidity management. Hiring a CFO adds credibility to a business and gives them greater access to capital from private investors, PE houses, and banks.

Securing short-term funding is vital for a company’s crisis survival strategy. CFOs will build strong relationships with lenders, investors, and financial institutions in the event of cash flow problems, including high levels of non-payment from customers.

Navigating the Inflation Squeeze

An inflation squeeze is a crisis every CFO will be preparing for. The current recession is sending the economy towards an inflation squeeze. A CFO can navigate this crisis because of the data and forecasting they have that offer real-time insights. Understanding unit pricing and consumer behaviour are vital for scenario planning and putting strategies in place to navigate an inflation crisis and preserve a company’s profit margin.

Preparing for an inflation squeeze includes looking for opportunities to reduce costs to counteract rising overheads and unit pricing. Conducting an internal audit is vital for understanding weaknesses within a company’s financial situation. Switching to electric cars such as Tesla‘s could also assist.

Balancing the Financial Books

Having access to working capital is crucial when navigating a crisis. CFOs who see a crisis on the horizon will typically tighten their cash management and reduce overheads by streamlining expenditures.

Crisis planning will enable CFOs to earmark potential savings and ways to increase cash flow. Having a plan for balancing the financial books will enable CFOs to preserve long-term planning and investment during a crisis.

A CFO may respond to a crisis by reducing overheads and promoting a move to remote or hybrid working. The pandemic has shown that major savings can be made by adopting a flexible working environment.

The only way to balance the books and navigate a crisis is by understanding a company’s finances. A part-time CFO will typically start at a new company by conducting an internal audit and putting systems in place to account for every penny in the organisation.

Survival is the key aim of a CFO navigating a crisis. A CFO will start their crisis planning by creating a survival strategy with a focus on minimising short-term losses while finding ways to invest in the company’s long-term future.

Liquidity management is key, particularly for companies vulnerable to currency fluctuations. Engaging with financial institutions and having strong relationships with lenders and investors is vital to building financial resilience.

Exploring Growth Opportunities

A crisis doesn’t always mean bad news for a company – particularly those well positioned within their industry. A proactive CFO can navigate a crisis and explore growth opportunities, including mergers and acquisitions. It’s not uncommon for larger companies with strong financial resilience to purchase a smaller or midsize organisation.

Navigating a crisis correctly can put a CFO in a position to re-evaluate the company’s portfolio and explore potential growth opportunities to develop its market presence. A recession or industry crisis presents well-positioned companies with an opportunity to become leaders in R&D, recruiting, and advertising.

Stronger companies can navigate a crisis and procure talent by being in a position to offer more competitive packages and salaries. We often work with companies in these scenarios who use their market position to attract the best talent with a competitive offer. CFOs in these scenarios can often negotiate more favourable rates with suppliers or restructure their supply chain.

War Room Planning

A part-time CFO can’t navigate a crisis without war room planning. While the CFO might always be there, their war room strategy will be playing on in the background. This scenario planning utilises real-time insights and data to ensure the company is never caught off guard by a crisis and is prepared for anything.

Having war room planning allows part-time CFOs to navigate a crisis by being prepared for everything from the best to worst-case scenarios. A part-time CFO will start by identifying company-specific risks that exist, including employee retention, outstanding debts, and vulnerability to supply chain disruptions.

Your part-time CFO will work closely with their colleagues to understand each aspect of the business and the risks that exist. Engaging with stakeholders and colleagues prevents any unsuspecting surprises from causing a bump in the road.

Increasing Company-Wide Resilience

Companies can only survive a crisis if they have resilience. A part-time CFO will have proactive goals for the company’s short and long-term resilience, from boosting cash flow to increasing employee retention. Working with a part-time CFO can develop resilience within a company by creating streamlined financial systems.

What makes a company resilient is its ability to maintain its customers, steady its overheads, and withstand cost increases. A part-time CFO must understand every part of the supply chain or consumer behaviour to identify proactive measures and ways to cut costs if necessary.

Working with other departments can enable a part-time CFO to navigate a crisis by leading the company to adapt or redesign a product to facilitate lower costs and maintain profit margins.

Operations are an area that is often overlooked. Investing in technology and tracking productivity is vital to promoting efficiency and staying ahead of market trends. A part-time CFO will increase company-wide resilience by putting systems in place to increase outcomes and build company resilience by encouraging career progression.

When Should Companies Hire a Part-Time CFO?

It’s too late to wait for a crisis to happen to hire a part-time CFO. While a skilled CFO can transform a company’s fortune and oversee debt refinancing and company restructuring, they can make a bigger impact before a crisis.

Several events can pre-date the hiring of a part-time CFO, including growth acceleration and fundraising. SMEs and start-ups typically hire a part-time CFO when they’re fundraising or preparing for expansion. Hiring a part-time CFO is an investment into your company’s future, including preparing it for economic instability and industry crisis.

A part-time CFO will provide a fresh perspective on the company’s financial situation and strategy, including its readiness to navigate a financial or industry crisis. The current global economic situation is a case in point as to why companies should have a part-time CFO on their leadership team.

While there’s no perfect time to hire a part-time CFO, they’re an investment that pays for themselves. Choosing to hire a part-time CFO is more economically viable for SMEs and start-ups than recruiting on a full-time basis. A part-time CFO will deliver as well as a full-time CFO for smaller companies.

How Your Company Can Hire a Part-Time CFO

Hiring a part-time CFO is one of the best investments you can make for the future of your company. You never know when a crisis is right around the corner. Whatever your company’s position is, hiring a part-time CFO will make it viable to navigate a crisis or position your company to take advantage of economic uncertainty.

Working with a specialist recruitment agency like FD Capital means you can tailor your recruiting process to the needs of your business. Our team will help you identify your specific needs and connect you with a candidate who will fit into your company culture.

Our portfolio of CFOs has worked for some of the UK’s most successful companies, from multi-national organisations to PLCs. You can access their skills and experience in a way that’s affordable for your company by hiring them on a part-time basis.

Start recruiting for your part-time CFO and prepare to navigate any crisis by contacting our team at recruitment@fdcapital.co.uk

Adrian Lawrence

Adrian Lawrence FCA with over 25 years of experience as a finance leader and a Chartered Accountant,  BSc graduate from Queen Mary College, University of London.

I help my clients achieve their growth and success goals by delivering value and results in areas such as Financial Modelling, Finance Raising, M&A, Due Diligence, cash flow management, and reporting. I am passionate about supporting SMEs and entrepreneurs with reliable and professional Chief Financial Officer or Finance Director services.