Rutherford Cross Director, Derek Lauder shares key insights from our latest Interim CFO Roundtable event, which explored the rising demand for Fractional CFOs in Scotland and how this evolving model is benefiting both businesses and finance professionals.
Rutherford Cross held its Interim CFO Roundtable of the year just before Easter. Nine Scottish-based Interim and Fractional CFOs attended, each representing a variety of company backgrounds, including: Tech, Manufacturing, Professional Services, Energy, Financial Services, Facilities Management, Healthcare, and Start-ups.
Following initial introductions, the discussion began with the ongoing growth of the Fractional CFO market in Scotland. Over the past 12 months at Rutherford Cross, nearly 50% of the interim FD/CFO roles we have handled have been part-time or fractional – a significant increase compared to previous years. High-growth SME business founders and business owners are increasingly recognising the substantial benefits of engaging a Fractional CFO, including:
- A highly cost-effective method of accessing senior-level expertise, but at a fraction of the cost, as they are only engaged 1, 2 or 3 days per week – or even less in some cases
- The impact of engaging a Fractional CFO is often immediate, and due to the role’s flexibility, it can scale in line with business growth
- Business owners can move the requirement up or down by agreement with the Fractional CFO
- Access to the typically extensive network of a Fractional CFO can offer commercial advantages. Many have a track record in Private Equity fundraising, which can be particularly valuable
- Cash flow is frequently the biggest challenge for scaling businesses, and a skilled Fractional CFO can be invaluable during periods of growth
- A Fractional CFO can also serve as a mentor or support figure to the wider finance team
Our Group CEO, Jamie Livingston, recently wrote about the growth of the Fractional market in Scotland in The Scotsman newspaper. This further highlights how prominent the conversation around Fractional CFOs has become – not just among finance professionals, but also at an executive search and strategic leadership level.
The increasing popularity of the Fractional CFO model in Scotland has been driven not only by the rise in start-ups and SMEs but also by many experienced Finance Directors and CFOs seeking a better work-life balance. Key discussion points around this at the roundtable included:
- Opportunities for Fractional CFOs arise from various sources, such as personal networks (firms, banks), Private Equity contacts, LinkedIn, recruitment consultancies, other Fractional CFOs, and membership bodies (e.g. Institute of Directors)
- Ideally, a Fractional CFO would work with no more than five clients at any one time
- Several remuneration models were discussed: operating via a limited company on a day rate, charging a retainer, or working at a reduced rate in exchange for a success bonus or equity stake
The conversation then moved to the Interim FD/CFO market in Scotland, which is also growing – albeit at a slower pace than the market down south. Maintaining and expanding your network, staying visible, and building a demonstrable track record were highlighted as critical for success in this highly competitive market.
Many thanks to all who attended and contributed to such an engaging discussion. If you are interested in the group or in learning more about the Fractional / Interim CFO market in Scotland, please contact [email protected].
