On Friday we were fortunate to have McGrathNicol come in to present to a group of FinTech leaders as part of our partnership with the FinTech community. Shane Bell, Hugh Monaghan and Adam Blogg presented on the Four key principles to manage growth & maximise value in a FinTech.
They focused on four key areas for growth phase companies:
- Setting your strategy
- Working capital – key considerations
- Maximising value in a transaction
Having consulted to a range of companies over the years it was interesting to hear Adam open the presentation talking about the common traps that companies fall into when growing their business. These included unclear purpose, often with a great product companies fail to clearly identify their purpose, and a focus on core competencies creates a culture to ignore opportunities and threats in the external market.
McGrathNicol has long used the Agenti Principles to consult to their clients to improve performance, these are:
- Purpose sequence – setting targets and measuring success
- Forecasts – set base line, business as usual and perform gap analysis
- The elephant hunt – engage with your business to identify the elephants and set strategies to deal with them
- Evaluation – review if you’ve closed the gaps, tackled the elephants and assessed your risk
The figures of cybercrime are staggering, over half a million Australian small businesses affected. This has gone from being a top priority of just the IT team to a topic of conversation in the boardroom and executive leadership team. In Shane’s experience, the majority of attacks focused on identity theft with malware. Shane talked through the essential eight to kick start your technical operations and avoid issues that affect 90% of Australian companies.
- Application whitelisting
- Patch applications
- Disable untrusted Microsoft Office Macros
- Use application hardening
- Restrict administrative privileges
- Patch operating systems
- Multi-factor authentication
- Daily back up important data
Often small companies scaling can lack resources and fail to set up their IT systems securely, with some basic safeguards that protect the business.
Adam talked about the importance of working capital in your business. It’s not your revenue that will make or break your organisation, but your working capital. Key areas to focus on are when do you need it, how much and are you making it work for your business.
Hugh wrapped up the session looking at some of the key areas to make sure you are ready for either an IPO, Trade Sale, Capital Raise etc.
He pointed to the need to have clear policies, document working relationships with suppliers including signed agreements, and a central record of the operational heartbeat of your organisation. As tech companies grow there is a tendency to have handshake agreements with both suppliers and clients which proves challenging to value a business, and also challenging to pull together when needed. A little bit of housekeeping along the way can create less distraction when the time comes to go down one of these routes.
Common issues impacting sale readiness
- Over reliance on founder of small group of key personnel
- Poor systems and financial reporting
- Business continuity issues
- Lack of external advice
- Complicated corporate structures
- Non-business-related transactions running through the business
- IT arrangements – review of your cybersecurity is likely to be performed
- Key contracts and arrangements not being documented
A highly informative and practical session this was our first in a series of presentations to support the FinTech community we work with. If you would like further information on this session or future session please get in touch.