The CFO’s guide for growth

By Rowan de Klerk | CEO of The CFO Centre

As we move into the final quarter of the year, there are early signs of renewed confidence in the
South African business environment. For a long period, leaders have been forced to operate in
a low-growth mindset. Most decisions were centred on cutting costs, tightening processes and
keeping businesses stable during difficult conditions. Now there is a shift happening. It is not a
dramatic upswing, but it is a noticeable change in sentiment that creates an opportunity for
CFOs to reposition their organisations for growth.

It is important to remember that a CFO does far more than keep score.
A strong CFO plays a central role in strategic decision-making. When the next cycle of growth
arrives, the companies that are prepared will be the ones that can act quickly and confidently.
The ones who have tightened their systems, understood their numbers and invested in the right
areas will be able to take advantage of new opportunities.

The first step is to analyse where the real problems and opportunities exist in your revenue.
There is often an assumption that revenue growth must come from doing more of what you
already do. In reality, most businesses have pockets of strength and pockets of weakness.
Some markets are saturated. Some products have reached their ceiling. Some customers cost
more to service than they repay. Growth requires a detailed understanding of where the real
potential sits.

CFOs also need to be honest about the limitations of the South African environment. The local
market is likely to remain relatively sluggish for the next few years. This does not mean
opportunities are absent. It simply means that if you want to grow meaningfully, you may need
to expand beyond South Africa or into new channels. A useful example comes from a retailer
that chose to move certain products onto Takealot. This was not a shift for the sake of trend. It
was a deliberate strategy to reach customers in places where physical retail expansion did not
make sense. It raises the right questions. Are you entering a new geography? Are you entering
a new market? What are you planning to do differently? Growth only works when there is a clear
strategic intent behind it.

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The next area that requires attention is capital expenditure. Capital Expenditure (CAPEX)
decisions can set a business up for long-term expansion or lock it into unnecessary risk. Many
owners underestimate the importance of doing proper homework. This is where a financial
person becomes essential. A CFO can test assumptions, model different scenarios and
calculate realistic payback periods. Banks respond positively when businesses demonstrate that
they have done the work. When the modelling is strong, you can negotiate better, present a
clearer case and build confidence in the decision.

A practical example of this comes from a client who manufactures shoes. He exports to the
United States and sells out his production, but he has been hesitant to double his capacity. The
fear is understandable. He believes he could sell more, but he is unsure about the expansion
risk. When a CFO entered the business, the focus shifted to understanding how the model
works, how long the payback period would take and what the underlying costs would be. Once
the financial framework was clear, the owner could make a confident decision about whether the
expansion would produce a return.

Acquisitions are another strategic route that CFOs should consider. It is still a good time to buy
businesses because many companies are emerging from tough conditions. If you are looking to
grow market share, acquisitions can accelerate the process far faster than organic growth. The
key is to avoid buying businesses that are already performing at a high level. Look for
businesses that are struggling but have a structure that you understand. If your operating model
works well, you can often apply it to other businesses and turn them around.

There is a client with a franchise model who followed this approach. He started with one store,
found two additional stores that were underperforming and turned them around by applying his
existing systems. Another client in the laboratory sector used a similar idea. Before entering
mining operations, they had a very efficient way of running their labs. By acquiring other labs
and applying the same model, they grew their business significantly. The principle is simple. If
you know what you are good at, and if your operating model is strong, then acquisition becomes
a practical way to expand.

Growth also depends heavily on people. A proper SWOT analysis with an external person can
be very useful because internal teams often overlook their own weaknesses. Growing
businesses almost always face capacity problems and skill shortages. As they expand, the floor
manager becomes the factory manager, and the bookkeeper becomes the finance head. This
may work for a period, but it eventually reaches a point where the business needs stronger
skills.

Good leaders understand that they need strong people around them. If the organisation cannot
afford full-time executives, then a fractional team can fill the gaps. A fractional CFO, a senior
marketing specialist or an experienced sales leader can guide the business with far more clarity.
You cannot cut corners on senior skills. If you buy the right experience, it pays for itself.
Businesses without strong people do not grow in a sustainable way.
The final question every CFO should ask is simple. Where did I get complacent? Where can I
add a resource that strengthens the weaknesses in my team or in myself? Strong boards do this
all the time. They introduce external advice so that leaders can make better decisions.
Those who have the confidence to act on improving sentiment will benefit. People follow
sentiment, and the fundamentals eventually follow too. Your timing may be exactly right if you
decide to move now.