CEO of StretchSense, Ben O’Brien, is a strong advocate for SMEs bringing in a Virtual CFO (VCFO). Ben has been using David Jobling and Mark Talbot from the Deloitte Private team in Auckland, as his company's VCFO support since July 2015, and credits them with bringing immediate benefits. Ben says unless there is someone in the company with the financial skills you need, it's imperative to have someone who can bring them.
Why did you choose a VCFO?
We raised money in November 2014 so grew the team and added a layer of management to the company. I then started going away to the USA frequently. Before long, I realised we had built this hectic machine of a business and had a very limited understanding of what we were committing to financially. Basically I had a budget blowout, got scared, and then looked around for a VCFO to help me and the business.
How did you go about finding one?
We knew Mark Talbot through some connections, so while all the professional services firms had similar offerings, it was the fact we knew Mark and liked his approach that sealed the deal. Mark then bought in David Jobling to do our day-to-day things while Mark sat in on board meetings.
What has happened since?
David came in and really cleaned everything up and got insight and understanding into what we were doing. He even found some areas we were spending unnecessary money so the service paid for itself pretty quickly!
As we have gone forward, the ability to own the financial state of our business has been very helpful. So I would say to other entrepreneurs that the best thing we ever did was to bring in the financial talent.
I even think people could bring in someone much earlier – even one or two hours a month at the beginning would mean you could catch a lot of things! We're using David one to two days a week now.
What's the biggest area that your VCFO has added value in?
It would be the proper financial discipline around reporting because we did not know what we were signing up for. David and Mark really helped us in terms of the visibility around our financials.
It used to be that we'd just ‘pay a bill’ a few times a month but once you’ve got lots and lots of people all making obligations and sales on your behalf, then that just breaks down.
What have you been most surprised by?
The cost effectiveness of it – the value a VCFO brings is huge and it pays for itself really fast. I’d previously approached it as a kind of long-term investment but actually it has very quick benefits – and getting your financials under control can have effective and immediate benefits.
What would you say to others thinking of it?
Do it as it's incredibly cost effective! For example, I made a very small error on day one and it took us three years to find it. While it hasn’t cost us a lot of money, it's costing us a lot of time to fix. But if I'd had the support in the beginning it wouldn’t have happened.
You only know what you know. Entrepreneurs generally don’t have financial skills – they’re pretty sales focused at the beginning – and you shouldn’t beat yourself up for gaps in your knowledge. So it’s utterly critical to get someone on your team with the financial skills you need.