Strategic Planning Tips for CFOs

January 26, 2023

As Chief Financial Officer (CFO) you’re in a pretty influential position. Not only do you take charge of the purse strings, but you are also a key source of strategic direction for the business, its board, and the financial future of the company.  

However, your role is notorious for having an inordinately long to-do list, and too little time to achieve it.  

When it comes to finding the mental bandwidth to strategise a financial future, it can be a challenge against the day-to-day responsibilities of a CFO. What should your priorities be? Which opportunities need your attention? And how can you stay informed on potential risks on the horizon?

In this article, we tackle our top tips for CFOs to streamline their strategy.  

What does strategic planning entail for a CFO?

As CFO you’re on a mission to haul the business from where it is today, to the brave new world of tomorrow. To do so, you’re going to have to take a holistic approach that considers the market, your competitors, internal ongoings, and future goals. Below, we tackle just some of the key areas CFOs should be focusing on when building their strategy.  

Horizon scanning

Often times financial forecasting can feel a little like toying with a crystal ball. And, while CFOs are bloody good at it, it’s not a perfect craft. When it comes to planning a financial roadmap, it’s important that CFOs embrace horizon scanning to make educated decisions about their financial strategy.

But what is horizon scanning? Well, horizon scanning is a methodical approach designed to predict hurdles, spot opportunities, and prepare a business for the future. Perhaps looming regulatory changes are set to impact the cash flow of your FinTech business. Perhaps, shifts in employment law have the potential to change your overheads. Or, perhaps, tightening data protection rules place your company at a higher risk of eye-watering fines. Horizon scanning can be a CFOs secret weapon to mitigate against risk and maximise opportunity.  

Build a relationship with the board

The board of directors is a seat of decision-making, often packed full of diverse individuals with varying goals, needs, and beliefs. As CFO, it’s your responsibility to not just present ideas to the board - it’s also down to you to sway the board to your strategy. At the outset, it’s important that you garner the confidence of the board, but that’s easier said than done.  

It can be a helpful tactic to begin your CFO role by targeting easy wins that can greatly impact the business. Perhaps the company has unfavourable payment terms throughout its contracts, or perhaps the business has outgoing costs that are no longer beneficial to the business. In the early days, it can be a handy strategy to prove your immediate worth, and build confidence that you’re making actionable change within the business.  

Revenue

As CFO, you’ll likely spend time auditing the business, getting up close and personal with business expenditures, and reducing costs where possible. While planning the cash flow of the business will be paramount, so too will be improving the revenue of the company overall.  

This is where relationship-building with your sales and marketing teams can become invaluable. Similarly, this is where embedding robust reporting systems and data collection processes are paramount.  

Take the time to probe deeply into the most successful initiatives within the business. Are there missed opportunities? What is the retention rate of existing customers? What is the average price point of a sale? Are there trends impacting the revenue of the business? Are there steps that can be taken to capitalise on that?  

To answer many of these questions you’ll need to build a relationship with the commercial function of the business (whether that’s sales or marketing or both) and ensure you’re both on the same page when it comes to reporting data. In doing so, you’ll have a crystal clear view into the existing revenue of the business - and the opportunities that lie in wait.  

Competitors

As a CFO you’ll spend a long, long time becoming intimate with the inner workings of the business. However, it’s important you do the same with your competitors. Competing businesses can teach us a lot about our strengths and our limitations as a company. Similarly, their behaviours can signal changes in the market, looming economic pressures, or even opportunities to claim a larger market share.  

While deep diving into your own business, don’t forget to look at the bigger picture, and how your business exists within it. By doing so, you’ll equip your company with a serious competitive edge.

Legal advisors

CFOs and legal share a key goal: the avoidance of risk. As Chief Financial Officer you’ll be buried in the financial well-being of the business. While that means you’ll have a close eye on the financial risks facing the company, it also means that you need to rely on legal to monitor changes, uphold compliance, and support you when the business has legal obligations related to financial matters.  

This is where it’s crucial that you have a robust relationship with legal that promotes open communication, pragmatic decision-making, and reliable expertise. Without it, your financial strategy is wide open to risk. With it, your financial strategy is protected on all sides.

At Plume we equip CFOs with just that. Fast-growth startups deserve support that allows their CFO to flourish, and our Flamingo Subscription is designed to be the legal fuel a company needs.

In need of a legal partner? Contact us now for a free, no-obligation discovery call.

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