IxCFO; Shared CFO services for SME's

The concept of sharing resources has been on the rise in the recent times and ingenious new models are being developed around this concept. One such new offering is financial control; a shared CFO and this is exactly what IxCFO provides. Shared CFO services are emerging value based services segment worldwide and these services are one of the top growing services in finance consulting worldwide. IxCFO are one of the first movers in India. Sanjay Gaggar, a chartered accountant having 18+ years of experience in this field, started up IxCFO in the October of 2010. We, at YourStory caught up with Sanjay to know more about this unique offering. Excerpts from the interview:Tell us about IxCFO.

IxCFO is a provider of shared CFO (Chief Finance Officer/Finance Controller) services targeted towards SME business segment in India. We provide an experienced CFO who works across multiple businesses owners at any given point of time on sharing basis. This enables the business owner to get valuable expertise available at his/her disposal to drive its finance function and all this at a cost which is significantly lower in comparison to hiring a full time CFO on roll.

How did you startup? How much capital was required to start up?

We launched this service after intensive market research and understanding the requirement of missing skill set within finance with special focus on SME segment. We also spent a lot of time meeting industry experts, PE/VC Investors, family set-ups, industry CFO’s and understanding their view/opinion to make this model work. Our initial capital requirement was around Rs. 10 lakhs to start-up this venture in terms of hard cash which does not include the sweat efforts which as we all would agree, is invaluable.

How does the whole procedure work if a small company wants to avail your services?

We first get into understanding the business, its current size, organization structure, finance team & functions structure. We also understand the current gaps in finance function mapped to our CFO services engagement bucket & figure out expectation of business owner.  This may take typically 2-3 sittings with the business owner in clear understanding of issues and may involve interacting with Tier-2 management team/investors as well to customize our offering then.

Based on this understanding, a detailed draft of CFO services mandate is given to business owners from our side for sign-off to commence execution. Mandates are clearly defined & measurable deliverables are being given coupled with our timeline & execution approach in brief.

What is the pricing?

Typically, cost & pricing is the function of business scale and growth aspects. Our cost varies from per man day in case of specific on-site assignment. Other model is in the form of fixed monthly retainership model (with on-site & off-site presence) having typical lock-in of six months to one year to start engagement as shared CFO. We believe in a professional relationship and deliverables based engagement with our client and to derived fruit of shared CFO by business owner, we advise them to engage us for certain reasonable tenure.

What is your revenue model?

We have positioned three services vertical clearly demarcating CFO’s forte - Finance operations, Business support, Business strategic advisory & execution. While the first two services are typically monthly retention-driven based on our resource mix man-days pricing, last one is percentage base or premium pricing services based on IP, Knowledge & our network driven. This makes our revenue model clear in terms of our pricing v/s deliverables, brining clarity to business owner.

How do you market yourself?

Our marketing is largely within our direct professional business & finance network driven and indirect approach consist of membership of SME chambers, media/banker/NBFC sponsor finance events, participating in CFO talks in apex bodies of various businesses, bankers SME finance cell, web media site like linkedin, our Institute and CFO network among others.  We also have partnered with various services providers wherein we cross sell each other’s services.

What are the obstacles you face?

Many of these SME business owners do not have finance team above tier-1 or tier - 2 level i.e. they have transaction level associates or at the most Managerial level finance associates. Since we are targeting largely SME segment business owners, current knowledge on CFO’s role in the business becomes biggest stumbling block.

How big is your team? Are you hiring?

We are currently three managing partners & five associate/executive level partners spread across Mumbai, Delhi & Pune region. We are looking for experienced controllers/CFO/Senior finance professionals to be part of our team as we expand with more mandates based on our current quarterly run rate. We are already ramping up team and building a network of CFO’s having enterprising zeal.

To know more about IxCFO, click here.