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Spring 2023 49 RECESSIONARY PRESSURES BOOST CFO DEMAND Claire Trachet discusses the need for experienced finance officers to help navigate businesses out of crisis. L ast year’s steep drop in tech valuations, triggered by inflation and high interest rates, marked an end to the era of cheap capital and finance, so companies are now looking for more from their finance directors. Priorities have massively shifted for CFOs since the beginning of 2022, where the focus for scaling businesses largely relied on growth at all costs and vision statements. The increased focus on defensive strategies is being driven by a sharp rise in the priority given to improving cash flow, meaning business models are increasingly embedded with detailed plans which will help drive tactical decisions. Because of the highly agile nature of startups and scale-ups, in the past, many have steered away from the same level of quality analysis seen in big corporations. However, this is evolving as detailed models become a key tool for visualisation, which, if balanced properly in terms of time and effort, will be crucial for the next 18-24 months. Having a firm grip on cost control and cash accumulation should remain top balance sheet priorities over the coming year. Finding the right candidate that will help an organisation adapt to a changing landscape is not easy, however there are some key traits which can help your organisation identify a versatile CFO within your budget. In times of crisis, you need to lean on people who are experienced. You may not have time to teach someone at the expense of your company, and you cannot be abundant with your time and resources, so will need people who can get you where you need to be, quickly. If you find someone that’s really ambitious but still rather early in their career or mid-career, you can combine themwith an external or fractional CFO because they can be coached. However, without the latter this could prove challenging. Alternatively, you could try building a strong accounting team in the company, and then hiring a CFO later. It’s better to have more experienced and expensive people on a short fractional basis, rather than someone who is laying the foundations at a very high cost. The landscape is evolving faster than anticipated, compared to a year and a half ago when the focus was on growth at all costs. Even though there were business plans, they weren’t detailed and were not helping drive decisions like the big corporations were. At that time, we were offering the same level and quality of plans as big corporations, because even though scaleups and startups are smaller they can still benefit from these models. This kind of model is now fully accepted as a tool for growth and has become critical in helping discussions with the CEO and the board. The main commonality for CFOs between then and now is the time it takes in getting to the next phase. << Claire Trachet is an award-winning entrepreneur and corporate finance professional who founded business advice firm, Trachet, in 2016.