Commercial Finance expertise is critical when it comes to scaling IT services companies for a number of reasons, allowing them to stay ahead of the game. Let us think about what happens when IT & financial expertise collide…
Pouring your profits into technology development and you will drive innovation into the service you provide to your customers, but to ascertain the volume and value of funding will require acute commercial finance experience, a skill set missing within many scaling IT service providers, as they normally cannot afford the significant expense that a CFO or Finance Director will command.
Taking this a step further in a rapidly changing world, IT service companies need to build and maintain exacting and innovative IT infrastructures in order that their people, process, and software platforms can deliver the highest standards of service management to customers. A grounded yet ambitious commercial finance approach driven by a project-driven Finance Director will achieve this.
What happens if scale happens quicker than expected? A good problem to have. A thoughtful commercial Finance plan regarding investment will enable IT companies to deliver to an enlarged client base, in an increasing international client environment.
How do you know how much to invest in sales and marketing strategies, and CRM technology. Proper financial planning enables IT Service companies adopt the right marketing campaigns, and support sales and customer relationship management.
Proper financial expertise also supports strategic growth when IT companies want to expand their share in the market via M&A. The right M&A model will drive successful fund raising to support growth, providing confidence to future stakeholders.
Typically, an IT services company may endure long payment cycles or large upfront expenses. Depending on where an IT business is at in its lifecycle of growth, a financially disciplined approach to financing and managing debtors will provide the comfort to 3rd party funders that you have everything under control and ready for scale.
Having scaled and exited my own IT Service Provider and making all the mistakes that I have talked about in this article, I am happy to share some of the battle scars.
Alternatively, if you want to get all the benefit of a CFO for your IT business without the fully loaded cost, then take a look Fusion’s part-time CFO service.
Our CFO’s have experience in working with founders on all the areas in this article and more!
Contact me or Adam Bloch by scheduling a free discovery call now.
