Scaling your business might sound simple, but there are a thousand different levers you can pull in a thousand different ways to accomplish the growth you’re looking for. But pulling the wrong one can slow you down — especially if you’re doing it without the financial analysis to back it up.

A Fractional CFO is your business’s guide to finding the right levers, knowing when to pull them and avoiding pitfalls along the way.

Don’t mistake customization for being customer-centric

When companies are getting started, leaders want to deliver on service to win (and keep) business. They often do it by customizing services or pricing to meet each customer’s needs. That’s not so bad when you have a handful of customers — but it’s much harder when you want to scale. 

The secret is to build offerings that address the needs of most of the market and deliver on them efficiently. Standardize your packages and your pricing. Simpler pricing is easier to sell, and building plans that work for many customers at once means your employees can deliver a great experience to more customers with the same effort.

Stay focused on ideal customer

Too many leaders fear missing out on opportunities and try to sell to pretty much anyone they can, especially in the early days. But professional services businesses and technology companies often have very distinct types of customers that they’re best suited to help. 

When you focus on your ideal customer, everything becomes more efficient, from sales to customer service, because your prospects will all have similar expectations and needs. If you can get 60% of an ideal target market to use your company, you’ll be better off than trying to get 1% of 60 different markets — and you’ll benefit from more repeatable processes and more predictable revenue.

Find an efficient utilization rate

Setting the right utilization rate is a tough one for most professional services firms. There are a lot of factors at play, but generally 70-80% utilization is typical, allowing for administrative work, holidays and vacations. Firms might exceed standard rates during busy seasons or as they test out new markets or services. 

But as you shoot for high performance, efficient work and the right work-life balance, consider roadblocks you might be setting up for your employees:

• Internal wasted time: Are you blocking potential billable hours with unnecessary internal meetings or by requiring overly detailed time tracking? Take a good look at how you might be hampering your own workflows. 
• Old-school processes: Paper records and manual work are still a lot more common than you might think, and often business owners stick to “they way they’ve always done it” without re-evaluating the efficiency of their procedures.
• Duplicate tools: As companies grow, they often acquire a piecemeal set of solutions that have overlapping features and capabilities, creating clunky workflows and unnecessary spending. Take a frequent look at the subscriptions and services your team uses in their work and identify any that offer the same functionality — or even ones you just aren’t using enough.

Bring on a financial leader to help you get it right

A Fractional CFO has the deep, diverse experience to expertly look across your company for issues you might not see on your own. The right Fractional CFO will take a look at every aspect of your business and find areas that are holding you back from scaling the way you want to. 

They will: 

• Use cash flow forecasting to predict your firm’s cash needs based on project timelines, billing cycles and collection patterns. They’ll help you manage your working capital to bridge the gap between work performed and payment received.
• Partner with you on scenario modeling to help you make more informed, strategic decisions and guide your business thrive through slower periods. They’ll regularly track internal and external variables through dashboards to avoid surprises and give you confidence in your plans even if you hit a revenue lull.
• Keep you aligned with the KPIs that matter most, like utilization rates, billing rates, client/product profitability, and client and employee retention. Consistently tracking these metrics means you can identify issues sooner and quickly correct your course if things aren’t going as expected.

When you want to scale, you need a plan. And without a financial leader beside you, you could make some wrong turns that take you off course. If you’re in Kansas City, one of the experienced financial leaders at Crown CFO can help you with the financial strategy of scaling your company.

Contact Kerry George at kerry@crowncfo.com to bring a trusted, expert Fractional CFO to your business.