Why Mairianne Stewart Left Big Business to Go Fractional

Speaker A: Culturally, there's a lot of politics that go on in the big corporate environment. There's a lot of things that's unsaid, but that's really how it works. Behind the scenes. It's a lot more underhanded and the level of governance, in my opinion, unnecessary governance and admin and bureaucracy is just off the scale.

Speaker B: Welcome back to the new F Word podcast where we talk finances in business. I'm your host, Colin Hewitt, founder and CEO at Float. We're so glad to be back for season three, and this season we've got some great guests that are going to bring a ton of value. We'll be diving further into how fractional CFOs had value, what financial clarity actually looks like, and what systems and apps are leading the way. New guests, sharper conversations. Let's get into it. Welcome, Marianne. It's great to have you on the podcast. How are you doing?

Speaker A: I'm doing good, thanks. And thanks for having me, Colin.

Speaker B: It's a pleasure. So you're a seasoned finance professional who has made the leap from significant companies into a fractional role and taking on going into companies that are at startup level, maybe pre revenue all the way up to 10 million. What was it that. Not everybody makes that jump. I'd love to hear a bit about your decision to get into that space and sort of almost start again in in that world.

Speaker A: Usually they say something happens in your life to make me to force you, and that's exactly what happened with myself. So just over five years ago, I had contracted Lyme disease. I hadn't been happy in the corporate environment for a long time, but the money keeps you there, the bonuses and so on. And I was plodding along. But then when I became ill, and I was pretty ill at the start, I knew I wasn't going to get better in that environment. I could come out of a meeting, it could have been a pretty stressful meeting, and literally the symptoms would flare up. So that was why I made the decision to leave that environment. I took nine months out to focus on my health. Just a lot of intensive treatment during that period. And then after that, I didn't know what I wanted to do. So I started to do interim work with smaller businesses, get a bit of experience working with smaller businesses, and I actually loved it. I could bring a lot of value to SMEs, but I never wanted a permanent job with any of them. Uh, the reason being was quite bored. They didn't use my full skill set all the time. And then that's When I started to read about fractional work, obviously there's a bit more in the US market. You could see it in the LinkedIn. And just about a year and a half ago, I just decided to, at the end of one of my contracts, I thought, right, either I do it now or I don't do it. So I just decided to go down the fractional route at that point. And I can see, I mean, I have. Overall, I've loved it since then.

Speaker B: Brilliant. It's quite scary in some ways to move into having to all of a sudden find your own clients. And were you tempted to join up with an agency or did you always want to go out on your own?

Speaker A: I had been invited along to one of the agencies that does the fractional on a, uh, information type session. And personally I thought, well, you've still to go out and pull the work, really, but you're given commission. So I couldn't understand that model. It wasn't like they were bringing tools or help as part of that commission. So I decided to go out on moan and do it also. I think it just allows you to have a bit more. You could be a bit freer with what you're doing as well. And since then I've evolved my thoughts about what this involves and I think it's probably more opening up to outsourced finance as well. I think the model definitely works better rather than just been a fractional because you're relying on other people to make you allow you to do your job.

Speaker B: Yes. How do you deal with that then? Are you working with some trusted people that you bring in or you.

Speaker A: So at the moment I use outsourcing resource to help me. I've actually just recruited the first person to get working for me. She starts next week. Probably like a fractional business partner stroke, financial controller type level. I've swayed over what level I get in, but I think I need that to help me take it forward. And part of the reason for that is you're relying on the quality of good bookkeeping and keeping on top of the bookkeeping side of things. But also when your multiple clients have similar deadlines at the same time, I need a way to work around that. So that's really where my thought process is at the moment and why I think I need that resource to help me.

Speaker B: It makes sense. And the business doesn't want you to be doing the bookkeeping, do they?

Speaker A: No. But if the bookkeeping's not very good, somebody should do it so you can do the strategic side. So that's one of the downsides.

Speaker B: Absolutely. I think there's an education piece for a lot of companies that they don't know what they don't know. And if they've been in that model of just getting end of year accounts from their accountants, then things can be a bit of a mess until, until that point actually people who are starting to work with fractional CFOs, we see this all the time at Float where people come and they want to use our product but the books are a mess. They have to go on this whole journey which can take a couple of months to figure it all out and get it up to speed and not. It's not easy, you know, it's like.

Speaker A: Exactly. And they don't appreciate that when you arrive how long it takes before they can get the information that they want.

Speaker B: Yes. It's a bit of a on uh, ramp, isn't it?

Speaker A: Yeah.

Speaker B: Do you have an ideal client? You know, what's your sweet spot? If you were thinking of taking on a new business today? Do you have something in mind? Do you have a. I uh, know you say you go from pre revenue, you know, all the way up, but do you have a certain stage that you enjoy more?

Speaker A: Again, my thinking on this has evolved over the last year and a half as I've experienced different types of companies and I'm really now settled on I like working with innovative type companies. Science tech I've not worked with but you know, somebody's developing a new product. Obviously generally there'll be pre revenue but they might have some revenue but they're definitely going through fundraising stages and looking for funding. And the reason why I've settled on that is because I like working with those type of founders. They've got a completely different mindset. For example, I'll compare it to if it's a family business that's been going for 20 years and look at cash problems. Trying to change those type of business owners mindsets is very difficult working with innovative type finders. They have a love for their product or the service and that probably drives all the right decisions that they make in the business. And I really like working with those type of people and the pace that they work at. So that's really what I've settled on. Um, don't get me wrong, it's like there's a lot of rough with it and there's a lot of downsides. For example, was worried about the next fundraising round and cash is a um, number thing one thing. Whereas if you're working in a more Established business, it's probably a bit smoother. The journey from a CFO perspective. I quite like that thrill there. I quite enjoy that side of it.

Speaker B: I see you're based in Scotland as well and do you typically stick to uh, that location or do you go all over the UK at uh, the

Speaker A: moment my clients are on Scotland, I have had clients down south as well. So that's not a problem. Yeah, generally, to be honest, if the business is interesting, the main thing for me is tech. For me.

Speaker B: How would you typically approach what sort of things? Just thinking. If somebody's thinking of making that, that leap into that space, what are the typical things they can expect to find when they come into a business that maybe hasn't had a fractional C.F.O. uh, at all? What sort of things are you starting to or, or if you're a business that's listening and you're thinking of be hiring a fractional CFO for the first time, where do you start? What are the benefits? What's on their list?

Speaker A: Generally when I've been called up to now it's there's either a problem with cash, for example, or they're uh, wanting to do a fundraising round. And the biggest issue I would say, which I've found across the board, is they probably wait too late for the timelines that they want to work to. But you touched on it earlier when you come in generally, I mean I've never picked up a client yet where this has not been the case. The transactions aren't recorded correctly in the right way to give insight. So there needs a bit of tidy up, a bit of. You're also looking at historical tidy up of data because if you're going for a fundraising round, potential investors want to see your books back two or three years. So we need to present the numbers in a way that helps them see the story and the picture and how you've progressed over that period. So a bit of tidy up then we might decide do we want to use tools, for example, do we want to use float, do we want to use a ah, reporting tool that's going to help us and then do for. And then there'll be longer term forecast than it needs done. That all takes time. M. I need to sit with the founders multiple times and pull out their ambitions or where is it to see the business going and pull that out of their head, turn that into a financial plan and also then just, you know, and it takes several iterations to go through that type of information and bottom out. The costs to get so Pulling that together can take a bit of time. And then once you see your numbers and your vision as a financial plan, it all starts to make sense and then they can do that next thing, whether it's fundraising round or whether it's to help them develop further strategies in house. And it would take typically two to three months to get up to speed. The other thing I would say, and probably both from the business perspective and people that are thinking about becoming a portfolio CFO. And it's one of my frustrations with LinkedIn and when people post about it, they think it's all finance. It's not finance, it's about 30% of it. It's all the other stuff that basically if nobody in the business does it, they expect a CFO to do it. That's generally how it works. So it could be dealing with insurance, preparing a draft cap table, dealing with the lawyers for the fundraiser generally. That's what I've found. I've been involved in all of that. So that's one of the things to bear in mind. And if you have came from myself a, uh, corporate world, you had teams that done all that stuff, you've never done it. So you have to learn on a job, you've just to work how to deliver what you have to deliver. So really I would say that's. I personally enjoy that. I like learning, but I think maybe people should maybe be aware of that before they take the leap as well. You might have to sort an invoice out. If the bookkeeper's off that day, you have to sort out that payment as well. That's the other side of it.

Speaker B: Absolutely. You kind of end up being the backstop as well.

Speaker A: That's the nature of the game with it.

Speaker B: And I guess your job is to try and bring in the systems to try and create opportunities where that those things happen less and less. It's under control and other people have that in hand.

Speaker A: That's why I felt the need that I had to recruit somebody in. So while it takes, while you're shortening out these issues and the ongoing challenges, having somebody who can just focus on improving processes and systems and reporting, that's a uh, win, win for both sides.

Speaker B: Obviously you mentioned float, which is great. Appreciate that. What other sort of software do you find of choice do you like to use for you? Typ using Xero as your. As a tech style?

Speaker A: I prefer Xero. I just think it's easier to use. It's easier to get the data and also capturing additional. If I'm looking For additional fields I can capture data in the way that I want. I currently use Fathom for business planning. However, if I'm being honest, it has some limitations. It's starting to frustrate me now. I do think it's overall it's a very good tool and I can easily work around those, but I have got to use spreadsheets to work around it, which is one of my frustrations. So my next task is to look at what different business planning tools are out there. Things like if you're doing consolidation, if a business has got a couple of entities and that's the type of thing I'm looking to see what's the best tools available to help with that.

Speaker B: Absolutely. I think it's an exciting space. There's a lot of people in that uh, zero ecosystem that are building tools like translucent. I don't know if you've come across that it's like multi entity reporting stills or Mayday. It's also kind of where do you build that time into and also how

Speaker A: can I use AI to make my processes? Finding the opportunity to do that as well to see how I can improve. But it's building the time and so hopefully I get that soon.

Speaker B: And do you find, have you found any other sort of community like of fractional CFOs or people that you're able to find out how they're working or do you miss the kind of side of that people, uh, at. I suppose you're getting it through the companies that you work with but do you have any sort of community of other fractional CFOs or that kind of thing?

Speaker A: There's a couple of communities that I'm a member of, whether I can remember the proper names of them so. But one of them is actually a recruitment consultant that's created a uh, community imaltiply so Chris has pulled one together. There's also within Glasgow area there's a community, uh, I can't remember the formal name of it and it's not just CFOs it's just fractional C suite that's been pretty useful. Have I found one where, where it's where we discuss like technical aspects like great systems season. No I haven't and I think that's probably something that's missing at the moment and that's the thing that I'm genuinely would like to learn about more. You do feel uh, as I say there's a lot of posts and people out there, the types of reports and things we do. But the reality is the Founder or an investor asked for a certain report on certain and you do need to spend time being custom and they tell you you've got to try and streamline it and that doesn't work in reality? I don't think so find it n tools that whatever works and answer to know whether I don't. I haven't found that right community for that would be useful to do that.

Speaker B: I'll share with you after some of the ones that I think we're seeing that are starting uh, to form. There's a few that I think are doing a good job and yeah it's just you want that honest advice which is coming from a neutral place rather than being promoted by the people that are behind it. We use fathom ourselves. We're sort of seeing more people using our 0uh Fathom Float tech stack. But like you say there are always going to be areas that you need to pull out the spreadsheet for from time to time just to get that.

Speaker A: But overall I think it is a very good tool for them. You know I can't say too much about it but yet.

Speaker B: Yeah. Do you think you'll continue to hire or do you think you're kind of at the sweet spot now where you've got like that one person and just yourself or do you would you see. Could you see that growing further? What's your ambition for the company?

Speaker A: I think I'll grow it further than that. I have finance at uh, probably bookkeeping level, maybe a management accountant level and so on because a lot of the work could be done by lower level staff. I think businesses think they recruit uh, a fractional CFO and they go in and a lot of the work is not fractional CFO level. But when it is it really is fractional CFO level. But sometimes you can't do that side of it because you've got some of the transactional or more compliancy type work that needs tidied up. So I do think for the model to work I will expand further.

Speaker B: I totally agree with that actually. I feel like at times when we brought in fractional cfo, we've got lots of fractional rules in float. Sometimes it's just perfect because you're getting that expert uh, advice and you need that, you need that high level, you need that experience. And then other times you know, you're going through a period of just taking along. You actually don't need could be done by somebody at a much lower level and at a cost. But it's hard to. It's almost like you want to have that flexibility of we don't need a CFO for three months. We've got the systems in place, but now we do and we've got the relationship and somebody who understands the company. That's an interesting one that I think will happen. Businesses are going to find more is like you say, they get somebody in, they need them to sort of come in and set everything up, but then they might not need them for the next six months going forward. And then they're doing. All of a sudden they're back into a funding round or a cash crunch or something and they really do need them. So it's that being able to have that flexibility and keep it with the same company is really appealing.

Speaker A: And also for a fractional cfo, when you're going in, you're reliant the business to have either they've got bookkeeping or their outsource and so on. Sometimes you get a really good bookkeeping and sometimes you don't. And having somebody who consistently works the way you work, I think would be a huge asset to doing this job well. So that's really where my thought is.

Speaker B: No, 100%. I think you're on the right lines. What are the common mistakes that you see? Um, when you typically come into a

Speaker A: new company, don't understand the numbers, they don't understand the story they're telling. And typically, which was a shock to me, not knowing how much money they've got left and when they're going to run out and having anxiety about that and being frightened to make commercial decisions because they don't know what's happening with their cash. I think that's the number one thing I've seen across the board. Sometimes Maybe the prior CFOs have not been able to tell them quick enough what the cash position is. So they're making delays on hiring or signing a contract and so on. I think that's for me the number one issue. So for a founder to understand, first of all the cash position, what they're spending every month, typically when the money's going to run out or when they're coming up with any cash crises or concerns, I think that's the number one thing for me. And then after that, it's then looking at their overall financials and understanding the story and how to turn their vision into a financial plan that they can understand and track, basically working blindly. That's, uh, summarizing it.

Speaker B: Founders can be difficult people to work with. Have you ever had to turn down a company or based on the fact that you just don't think you can work with them.

Speaker A: So I have went for a couple of initial meetings with people and I don't think this is going to work or I have worked with people and I think right, this isn't working in the long term. I'll do this piece of work and that'll be it. And it's probably from both sides as well. Generally though, I think particularly innovative type companies because these founders have got, they have an ambition for the product or their service and any help they can get and they're open to, generally they're open to be challenged and they want that if that's going to help them achieve their goals. So that's back to why I enjoy working with them. Um, and I think the other thing is maybe probably because I'm long in the tooth now. I don't take it personally, you know if you get like a rude email or a rude because they're feeling stressed it's just, it's like water off a dog's back. That's just how they're feeling. It's not personal, don't worry about it. But we'll loads of the time sometimes founders are like, can be quite hot headed and they're interesting characters, they're quite funny working but you've just to accept that.

Speaker B: I think that's very good advice personally speaking if you can learn to, to ride out uh, the, the storms. Because there's a lot going on for a founder, you know, there's a lot riding on it and I've got a

Speaker A: lot of stress so you've just got to appreciate that.

Speaker B: Yeah, but how does that compare to, I mean I, I've never worked in those kind of 5,100 companies that you have. You were saying that you felt like it wasn't an environment where you were gonna be able to feel healthy. What's different, what do you notice differently about the startup world versus the 5100? Is it that there's, the cultures are more, they're healthier or is it just what's wrong?

Speaker A: To be honest, it's like they're probably polar opposite types environment. So culturally there's a lot of politics that go on in the big corporate environment. So there's a lot of things that's unsaid but that's really how it works behind the scene. A lot more underhanded I would say if that makes sense. And the level of governance in my opinion unnecessary. M governance and admin and bureaucracy is just off the scale. So actually the amount of time you do on value adding work is like 10, 20% of your time. And working with a founder in a startup type environment, there's no politics. The only politics is what the founder wants. Generally the ones I've worked with all let you know what exactly the. And I think that might be a shock for people coming from the big corporate environment. Maybe a bit more brush when they're telling you what they want or their deadline. But it's honest, it's exactly what they want. You don't need to worry about any other agenda. That's exactly what the focus and the objective and the priority is and what they say their goal is. That is their goal, getting whatever if they want to get that next contract in place and get or get that grant application and that's what you have to focus on and that's your priority. So there's no hidden agendas and it's much so for me that's less stressful if I know what the real goal is. That's better than a goal that we don't actually know but we say it's something else.

Speaker B: Uh, have you ever been in a situation with one of the companies where they are running out of money or they have had to close?

Speaker A: I've ah, had one. It was actually when I first started out he got in touch with me because they'd known him. He was actually a supplier of one of the other companies I'd worked with. But I mean technically he got me in far too late. So for the last few months it was helping him manage the bank even emotionally, trying to get his head around the reality of the situation and trying to make sure that he was like. Another lesson or go off on a tangent is I'm surprised by people that are directors in companies house do not understand the obligations on them. So making him aware of his obligations in terms of running out of cash and how to treat suppliers and employees and making sure we do everything, you know, proper for all those stakeholders and just managing that end position well and then getting a restructuring in place, it was pretty tough even it was an emotion. Helping him emotionally was quite part of the job just to get in the right place. But he'd left it far too late. He should have got somebody in probably a year earlier. He left it to the last moment

Speaker B: just for any company directors that are listening, what are the obligations in those

Speaker A: moments if you're running out of cash and you genuinely know. So not a case of giving your finance director uh, over ambitious sales Forecasts that you know you're not going to meet. Being truthful with the numbers, what do you genuinely think your cash position and your sales forecast are going to be working it out, seeing how long you've got. Is there any way left on cash and not engaging in new contracts or purchasing new goods and services from suppliers if you know you can't pay for that? And ideally you get in a position where you've got time to involve a proper professional to help you through that end process and you deal with every day all your stakeholders fairly and you wind down properly. But a lot don't realise that.

Speaker B: No, absolutely. And uh, is it a bit of a gray area in terms of things are tight and depending on whether you make a couple of sales contracts or you close an investment round, like, how do you make the decision if you've got. Because obviously, uh, my understanding is if you've got staff and they're on like a three month notice period, you want to be able to, you have to kind of have enough staff or cash to pay for the redundancies. What happens if you feel like you're so closing a funding round or making a big sale?

Speaker A: So for example, if it's a funding round, you probably have two separate cash flows. You've got one with the funding round actually goes ahead and you get the money in, you have another one that doesn't happen. You build into your cash forecast. Winding down costs. How much do you need to close the business in a, uh, lawful way that's supporting all your stakeholders? That would include things like redundancy costs and officer building and notice periods. And then which I've never quite got to that stage apart from, is what's the adopt dead date for making a go no go decision that you're closing the business down by that point. And by that point, hopefully you'll get a bit more understanding of whether you're going to get that uh, funding or the cash injection that you're looking for or the contract that you're ready to sign, but you've got to work back from, for example, a three month period that you have to give notice to your employees and make a go no go at that point.

Speaker B: What if you get it wrong? What if you think like, yeah, the investment deal is going to close or the sale's going to go through and you take the cash right down to 15 days and it's not. You say, at this point I can't do it. Are there legal obligations against you from Companies House or.

Speaker A: Yeah, I mean there are Legal obligations. However, whether they're enforced on you and what the accreditors will be, I don't think there's always consistency there. Then as a founder, um, and as a director, you're taking the risk. Will that impact you in the future if you decide to set up another company or will they come back, come after you for financial redress for some of those stakeholders? So there's a theory it could be really bad for you or. But whether it's enforced, I suppose it's down to your risk profile and how much. But personally, I would think when it's employees, et cetera, involved and other people, it's other people's businesses as well. You know, if you don't pay something, they've provided, uh, a large service to you or whatever and they've not been paid, that could impact them as well. So it's morally as well. You've got to think about the right point. So, but generally I think when you get to that no go stage, I think you've pretty strong feeling what's happening.

Speaker B: And do you typically get involved in boards with the board or do they keep, you know, does that stay separate? How does that work?

Speaker A: No, no, for some clients I, ah, go to the boards, um, I'll put together the packs. And that's one of the things I probably try and professionalize what they do, pull together how they, you know, put a bit more structure around that. It's down to the investors. Some investors, some companies are really on the ball about what, how professional it looks. And then other ones have been quite surprised at could they get away with more to what they're allowed to submit there compared with that Other business generally go to boards if they want to present the financials. Even just managing the whole, making sure we're taking minutes and notes and getting the minutes prepared and sent out afterwards, that type of thing. Yes, pull those together, present the financial results.

Speaker B: On going back to your experience previously, one of the things that you learned that if you hadn't have done that, it would make your job harder now. Like, what are the things that you've garnered from that experience that you think has been really useful for you?

Speaker A: No, definitely. It's just the higher you go up, the more politics in the corporate world. I think that's what it is and it gets to a point. Is this what I really want in life? I think, but overall I wouldn't change my whole experience. So a huge amount of knowledge and experience from lots of different jobs that you can't really get in smaller Companies. So I've worked in internal audit, for example risk, even trading. When I was in Scotch Power they used, you know, there was a trading department, finance, different areas of finance and then supporting like finance deductor to the business level MDs. So through that whole process I gained lots and lots of experience also even just watching and shadowing directors, ones that are good at their job, ones that aren't so good at their job. There's parts of governance and risk management. People would think oh that's not applicable to SMEs but actually there's parts of it that can help you run your business better if you use it properly. Like focusing on your top 10 risks. For example your board meeting, that could be five risks, it could be 12. But what is the things that as a founder do you lose sleep at night over? And that should be part of the basis of the conversation and for your management team to know their role and in managing that risk and allowing you to monitor it. So there's things like that I think you definitely can bring from the corporate environment. Also you've got to learn the biggest lesson that I think was more communication skills and having to adapt that for the different audience members as well and being thick skinned. If somebody's uh, managing directors haven't had day and back in the days when they used to shout and swear at you just to take it personally, just learn to deal with different types of people. So there's a lot of things I took away from it so. And the variety of skills I did enjoy it overall.

Speaker B: Absolutely. Did you have a particular. Was there somebody that you felt like you looked up to or you earned a lot from in that sort of journey?

Speaker A: The one director. So he was my boss at one point when I was internal audit Scottish Prayer was he's Keith Anderson and he's now uh, he's been the CEO of Scottishpur for a long time. The thing I would say what made him brilliant at what he'd done was he was actually a great mentor and coach as a junior team member while he was also dealing with the board non execs and execs so he could communicate both up and down. He made everything clear when he was giving you feedback. You know, he could give constructive feedback and help you to improve what you were doing. And he had a lot of patience and if you went into a meeting with him at the end he would spend time coaching you and he was just really strategic and you can see what he's been a brilliant CEO at Scottish Power. So he's the one person always. I really enjoyed working with Keith as well.

Speaker B: It's nice to have. Be able to have those shout outs in the, uh. In a world where I can imagine it's challenging, especially for coming through as a woman and there must have been like, oh, it hasn't been the easiest environment to come through in those board meetings.

Speaker A: I imagine they could be very interesting, I'll say that. Yeah, they could definitely be. Especially at business planning time when you had different MDs sort of fighting for the same pot of money and it was how good your business plan was over the other, other ones. So it did start getting a bit tribal in those rooms, trying to get that pot of money for your business and your md. So that was really a good skill set for me to help me then know how. Know how to present information to investors and so on, like, what is it? And keeping it simple and clear and what you're going to deliver with the money is probably the best message to take from that. Don't overly complicate business plans.

Speaker B: Brilliant. It's been fascinating to chat and, uh, trying to think, is there anything that we've missed that you have a burning desire to communicate to the world? World.

Speaker A: One thing is for people that are thinking about doing it, I love what I do. I love the people I meet. It's very interesting. And as an accountant who's. You've never had to go out and sell yourself or pull clients in, I love that part as well. It's like a new experience, it's new learning. And if you're looking for something different, it is actually. It's really quite fun and it's a bit of a roller coaster, but it's good.

Speaker B: Brilliant. And your company is called Plugin Finance? That's right. Right.

Speaker A: Web and finance. Yes.

Speaker B: So we'll put the link in the notes at the end and if anybody wants to reach out to you, then I'm sure you'd be happy to chat to them.

Speaker A: Yeah, Brilliant.

Speaker B: Thanks so much, Marianne. Um, thanks, Colin. Thanks for tuning in to another episode of the new F Word. I hope you enjoyed it. Remember, expert financial advice shouldn't be limited to those with just big budgets. You can access the same level of advice for a fraction of the costs, thanks to this fractional revolution. I believe that every growing business needs to know how much a game changer this can be. So if you loved the episode, please consider subscribing to the show. It'll help us keep doing what we're passionate about. And feel free to share this episode. With others who might find it useful. Finally, we'd love to hear your thoughts. Feel free to connect with us on LinkedIn. See you in the next one, Sam.