Replying to Anil Mascarenhas of IIFL, Bhairav Kothari says, “Good talent is always short in supply, across functions. And this situation is amplified when it comes to good quality CFOs.”
Explain to us your business model.
All companies need a good CFO to assist, but not everyone would have adequate budgets or even enough work for a good CFO to be occupied full time. At SuperCFO, we launched our services to fill this void by providing Virtual CFO Services (also known as Shared CFO & Freelance CFO). Over a period of time we have expanded our service offerings and today we provide Interim CFO Services (where the requirement is temporary, on an interim basis), Full Time CFO Services (assisting companies on finding the right full time CFO), and various other solutions like SuperCFO BI, Finance Health Quotient Assessment, MIS Revamp. Budgeting & Forecasting, Transaction Support, Turnaround Management, etc. Depending on the nature of engagement, we would put together a team of managers, analysts and CFO’s to assist our clients. As regards terms, some of our engagements are on a retainer basis, some on success based and some a blend of both.
What made you start such a venture?
While I was working with CBay Systems, I used to interact with several entrepreneurs and saw how many of those could benefit with the support of a good CFO. Moreover, as a CFO at CBay, whenever I needed some help on any project, while I had a lot of advisors (from big accounting and consulting firms), I just couldn’t find someone who could help me with executing various tasks in the F&A domain, sharing responsibilities like a CFO. So I decided to address these pain points, by providing CFO as a Service. Further, a good CFO was expensive to hire. I came across some interesting models in the US and from there I structured a solution that was suitable for the Indian market, wherein one CFO would help multiple Companies on an ongoing basis.
Is there a talent shortage in the industry?
Good talent is always short in supply, across functions. And this situation is amplified when it comes to good quality CFOs. That’s where we leverage our search and reach capabilities, to identify the best talent around, in the finance domain. Because of our specialization in the CFO services space, senior finance professionals regularly talk to us when they are evaluating alternate career opportunities and that helps us in helping our clients find the best.
What are some of the big opportunities and challenges for CFOs?
With increasing investor activity, and globalization, several companies today are looking to strengthen their finance function. This serves as a significant opportunity for CFOs who are looking to scale up. Further, with Companies like SuperCFO, CFOs now have an opportunity to take up freelance, consulting and part time engagements. In fact we have seen several women execs, returning from a break, taking up the role of a Virtual CFO, which allows them to have a good work-life balance.
But there are also quite a few challenges for CFOs in today’s age – expectation to multi-task, be involved in several aspects of the business, dynamic & fast paced work environment and most important, regulatory accountability.
In promoter-led companies, CFOs often succumb to pressure and are unable to manage finances prudently. Do you come across such instances?
It does happen in few instances. But this is very case-to-case specific. CFOs should constantly evaluate their strengths and weaknesses, and work towards upgrading their skill sets. This, along with a clear perspective on where to draw the line, will help them not succumb to these pressures.
Comment on your financials. What is your outlook?
We have seen significant growth, especially in the recent past and feel we have a good number of years ahead to continuously grow at this rapid pace. I started my Company with an initial capital of Rs. 30 lakhs. Thereafter, we have been reinvesting profits from the business, each year. Last year (FY 14-15), our revenues grew 50% over the previous year and we are aiming to grow faster this year.
What is the revenue mix from various sources like Virtual, Outsourced, Interim, Special Purposes and Full Time CFO Solutions.
Today we are kind of evenly spread out across different segments.
How many corporates do you work with?
We have worked with over 100 corporates.
Who is your target market? Is it more of start-ups and Private Equity funds?
Target market would be early stage and growth companies for Virtual CFO Services, larger companies for Interim and Full Time CFO Services, and companies across the spectrum for various other solutions like SuperCFO Business Intelligence (bi.supercfo.com), Finance Health Quotient Assessment, Budgeting/Forecasting, etc. We also work with several PE funds, as well as second & third generation entrepreneurs.
What are your growth plans for the company?
Deeper market penetration (There are perhaps millions of Companies, without a CFO that need assistance.) Build a few more technology solutions, thereby making the business model more scalable. And through technology, service clients globally. SuperCFO aims to have a 100-member high quality CFO team in the next 3 years.
What is the range of charges for example for an interim CFO.
Costs depend on the background, experience, requirement, and the skill sets of the individual. We have a broad range of CFO profiles, ranging from 2 lakhs a month to 8 lakhs a month. We also assist companies with services of a Controller, whose cost would be a bit lower as compared to a CFO.
What is the shareholding pattern of your company? Any plans to sell stake? What is the valuation of your company? IPO?
The company is held by my family and me. I have no plans to sell any stake. We are quite profitable and growing rapidly. We don’t see the need to dilute and raise funds right now.