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Let's chat today about Business Life Stage with Finance & Accounting?

But first, are you wondering what's coming up where you can tune in and learn? Both topics that we have booked next are going to be important to businesses in all stages. These two topics are designed for CPAs as well as Business Leaders. They are applicable to all size entities.

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Business Life Stage with Finance & Accounting

At Amplify we discuss six stages of business when we look at the lifecycle of an organization.

We detail our definitions below. A few things to consider are also noted here. There is danger in general rules. It is especially risky when you use numbers. But as CPAs, you expect that from us, so we are throwing it out there.

Please read the following with consideration of your industry and specific circumstances as that will change the numbers or stages. By and large, you'll see patterns and trends that apply though.

• Before a business hits ~ $1m it will not have a proven business model.
  • Without a proven business model there is a need to focus on revenue and understanding the market.
  • In some cases, the reason there isn't yet a business model is because you are still developing your product and service.
  • Other times, you are developing the team, the pricing or the marketing of a proven service or product.

• Businesses hit plateaus. One of the most frustrating and surprising things that happens in business is hitting a ceiling. But, here is the thing, if you see that ceiling you can work to break through it. If you don't see it, you'll knock your head on it and you'll rebound down. If the latter happens, you can actually see your business face distress.
  • We've worked with businesses that hit this plateau at >$1b. Certainly, they probably hit bumps before that, but by the time we were introduced they were in the state of needing 'transformation to get through to the next level'.
  • The typical plateaus we see happen at ~$1m when you have the proven business model;
  • At ~$5m when you need to focus on profit and often need a team that differs from the start-up or scale-up culture that was magical at the beginning;
  • At ~$12m when you need to start introducing new products or services or get ready for an exit/merger/acquisition in order to continue to grow
  • And then again at ~$20+m when you start to be a 'big' company.

• There are many types of an accountants. Most of the time businesses don't invest in their Finance & Accounting function until there is a bit of a 'mess' to clean up. Makes sense right? Even the biggest companies in the world will define their Finance & Accounting function as a cost centre. It is hard to invest there unless you have a compliance reason or a compelling need.
  • The return on investment of a modern CFO is clear once you are at the early wrowth stage onwards.
  • A tax expert is not a CFO, yet many start-ups can get to the expansion growth level before they realize this.
  • A book-keeper is also not a CFO.
  • A controller is not a CFO.
• Below we discuss our perspective on why you need a Finance Leader at each stage and how they can help. We work with clients at all stages.

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• Amplify considers the scaling years to be Early Growth, Expansion Growth, and sometimes, Sustaining Growth. The trendy term to use is 'scale-up'. We like that word too. We relate to scale-ups because we self-identify with them and we work with many of them. Scale-ups need CFOs. Yup, we said it. If you are a growing business and you are in the stage of scale-up, you need an executive financial leader. Profitable growth relies on the right systems, processes, and people in place to scale the business and support the team.
• We define the early years as start-up and sometimes, early growth. Financial leadership helps, but a CFO is often more than you are ready to committ to.
• Once a company is past sustaining growth they are in the corporate stage. This is when team members that were 'joiners' of start-ups or builders of scale-ups can struggle culturally.

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• The inability to achieve goals threatens business leaders' reputation and the company’s future. They’ve worked too hard to watch their business plateau from chaos. They need support to restore their leadership and prepare the business for growth.

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