Fractional CFOs – Explaining the growing market
Our latest article explores the rise of fractional CFOs, highlighting their growing demand and impact. These leaders bring flexible expertise to drive strategic growth for scaling businesses.
Fractional CFOs – Explaining the growing market
Our latest article explores the rise of fractional CFOs, highlighting their growing demand and impact. These leaders bring flexible expertise to drive strategic growth for scaling businesses.
The Growth of the Fractional CFO Market- Unlocking potential for growing companies
In our last article, we explored the key features of fractional finance leadership and had the pleasure of speaking with Victoria Robson from Mercia Ventures. Victoria shared her insights on the evolution of the term ‘part-time’ to ‘fractional’, the transformative role of technology and why this solution has become a perfect fit for so many scaling businesses. (Click here to access that article).
In this follow-up, we delve deeper into the emerging trends and key benefits that the fractional CFO solution brings to businesses. Once again, we are delighted to include Victoria’s expert perspectives, drawing on her extensive experience across the Mercia Ventures’ portfolio.
A quick search on LinkedIn highlights the increasing prevalence of fractional CFOs and finance directors across the region, underscoring the growing demand for flexible, high-level financial expertise. This trend isn’t just a response to cost-consciousness; it reflects a deeper shift in how businesses access leadership to match their specific growth journeys.
Across the whole region:
The population and the volume of appointments are growing. Still, the most interesting observation sits within the detail and not the headline statistics – more companies are looking to a Fractional CFO as their first financial leadership appointment.
“In Mercia’s experience, fractional CFOs with significant strategic leadership experience can maximise impact and deliver immediate results within early-stage businesses in comparison to a full-time more junior hire. Scaling operations often require new systems, reporting and strategic financial planning from day one, so the sooner this experience can be brought into the business the better.”
What are the extra strengths that Fractional CFOs bring to businesses?
Businesses don’t choose a fractional CFO over a full-time candidate because they possess different skills—it is the depth of their expertise that sets them apart. This depth often comes from an extensive career history, experience operating at a strategic level, or working across multiple businesses. Fractional CFOs bring a wealth of knowledge from navigating diverse challenges, enabling them to provide highly targeted insights and solutions tailored to the unique needs of scaling businesses.
“As well as being high impact, many fractional candidates have diverse experience across a variety of sectors and can leverage this experience to specific challenges within the company. For many founders who have spent their career focused on one specific industry or sub-sector, this experience brings a welcome diversity of thinking to the boardroom. They can also provide operational support, given the bandwidth of founders is often limited this helps with more than just finance!"
How has technology supported the Fractional CFO model?
Strength of IT systems is always one of our first questions to shareholders when we are considering a CFO hire. Systems like Xero have automated many day-to-day tasks at reasonable price points.
“Recent developments in AI have helped streamline financial reporting processes, analytics and enhance forecasting abilities, streamlining complex financial data which all help inform a business’s overall strategic thinking.”
What is the impact on cost?
Businesses that are either at the early stages of funding or are funded by founders rarely have excess cash to invest. As they grow, they recognise the need for stronger financial support and the inclination can be to fit the expectations of the level of candidates around affordability. The fractional CFO solution compromises the lack of “an omnipresent finance leader” with a higher level of input.
Growing SMEs often recognise the need for additional finance resources as they hit key stages of growth. The instinctive approach is often to recruit a bookkeeper or finance manager, with budget constraints shaping the decision. However, some of our most successful appointments with scaling businesses have involved challenging these preconceptions and instead introducing a fractional CFO. These appointments have consistently delivered transformative results, enhancing value creation strategies without exceeding budget limitations.
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