Traditional finance skills of analysis, reporting and control are in demand outside of the finance function and the role of the CFO is broadening far beyond its technical heartland into a role that is much more “strategic” — in the broadest sense of the word. Leading CFOs are overturning outmoded perceptions of finance as “business prevention units” and repositioning the function as an enabling partner to the business. For many CFOs, the acid test is the extent to which business managers consult them for advice on key aspects of strategy. For leading CFOs, this goes beyond being an “information provider” or “aggregator presenter.” Their business understanding and analytical skills mean that this proactive, yet supporting, role is a vital part of understanding how different decisions will lead to certain outcomes.
Business owners often overlook selling their company to their management team, with help from an outsourced CFO, as a possible exit strategy. But for solid companies with good cash flows, selling the company to management may yield a higher financial value for the owner, and a much brighter future for the business, management, and the seller. Business owners choose this exit strategy as in the right situations this type of sale can provide four key benefits:
1. Sale at a higher value than offered by third private equity firms.
2. Receive significant cash proceeds at the closing.
3. Sale to a group most qualified to successfully run the business – the management team.
4. Owners get to stay involved in the business.
The characteristics of “Growth Champions” were defined as those elite middle market companies that grew at four times the rate of U.S. GDP by the National Center for the Middle Market, a partnership of The Ohio State Fisher College of Business and GE Capital. These characteristics as defined by the Center were summarized in a prior Harvest article and are listed below:
- Strong management culture
- Exceptional talent management
- A formal growth strategy process
- Sharper customer focus
- A broader geographic vision
- Focus on innovation