Steering Through Risky Waters: The Key Role of an Experienced CFO – A Conversation with John Hannum of PPS Solutions

In the vast sea of entrepreneurship, the finances of a company determine its ultimate fate. While the captain undeniably provides the vision and drive, they also need a maritime partner to safely guide the ship to its intended destination and on the most expedient route. The CFO is the support that every entrepreneur needs as they head into the uncharted waters.

Why is having a seasoned CFO crucial to a business’s success? Firstly, it’s about credibility. investors, partners, and stakeholders are far more inclined to trust and invest in a company that showcases financial acumen from the get-go. Think about it: in the world of business, where failure rates are alarmingly high, having an experienced CFO “navigator” on the bridge can mean the difference between sinking in a storm of uncertainty and sailing smoothly around obstacles during the voyage.

Meet John Hannum, the founder and driving force behind PPS Solutions. This firm specializes in bringing experienced CFOs to small and growing businesses on a fractional basis. As the financial leader of several companies that have experienced phenomenal growth, John understands the storms and rocks that many Disruptors are bound to face on their voyage. 

He advocates: “A calm sea doesn’t make a good captain.” He often uses this phrase to explain how experience matters, especially in disrupting businesses. Having a clear grasp of the financial arena of the industry you are entering and the direction of your company within the industry from the outset is the only way to ensure you’re starting your journey in the right direction. 

“Having a well-defined destination and intended path means we can put resources where they belong to make the most difference and measure our success against the plan”, John says, “A great plan can guide us to much better outcomes by ensuring that every resource allocated aligns with the company’s vision and goals.”

For businesses from startup to growth mode, prioritizing the finances in an organization goes beyond solely setting up accounting systems and doing the bookkeeping. Businesses can ascertain the capital needed by starting with a robust foundation built on financial basics – such as budgeting, forecasting, analysis, and modeling. This capital can be used for startups or expansions, model scenarios to cut down risks and chisel out operational strategies promising success in both the short and long haul. Without these tools and an experienced CFO who helps you interpret them, you’ll have no way of measuring success on your goals or ensuring that your business is on the right track.

Furthermore, a strong financial leader acts as a beacon, attracting stakeholders and instilling confidence inside and outside the company. “A financial leader’s presence demonstrates a company’s commitment to financial responsibility,” John emphasizes, “your team and your business partners see that commitment and appreciate it.”

John’s journey in finance has taken him up through the ranks in some fast-moving, high-growth companies. He’s been a tireless champion for a strong relationship between Finance and Operations. Finance’s role is to support operations and give critical information and insight based on the number. By harnessing our data and allowing it to guide our decisions, the result has been exponential growth during his role as a finance executive. “The power of an adept CFO as part of a high-performing management team cannot be overstated,” he states, “Operations should embrace Finance, and Finance should understand and support Operations in everything it does.” 

Peeling back the layers of John’s journey reveals a pivotal moment in 2020 that catalyzed the vision for creating PPS Solutions. While advising a small business navigating some troubling partnership challenges, he identified a glaring gap in the startup world – businesses made decisions without solid financial input, which is risky and costs them incrementally more in operating costs. “The entrepreneurs I encountered early in my journey would always tell me they didn’t have anyone to ask for guidance in finance matters in their businesses,” John explains. “These businesses were paying more than necessary for financing, insurance, and other areas because of an inability to negotiate financial terms.” This lightbulb moment was the spark behind PPS Solutions. 

As John stepped into the world of smaller businesses, he saw things from a fresh perspective. It struck him that not all of these businesses could afford a complete finance team or a seasoned CFO. “Because CFOs are so valuable to larger companies, they are rewarded extremely well for shepherding their companies to financial success. Many smaller companies know they would like their own CFO, but don’t have the budget. So they either leave the CFO chair vacant, often with the entrepreneur attempting to perform the job themselves with clerical help such as a bookkeeper who works directly under their supervision. The other tendency is to find someone to accept a CFO title without the typical CFO salary, which is typically someone without the direct experience necessary for the strategic component of the job. Either way, the company needs to catch up on the strategic component that an experienced CFO brings. It may have been more successful with a strategic financial partner on the management team. 

According to John, the answer to the puzzle is the idea of ‘fractional finance,’ allowing businesses to obtain “just the right amount” of financial expertise they need based on their current size and complexity. Using a simple analogy, John quips, “Think of a finance department like a pie. Big companies might gobble up the whole thing, but the smaller ones? They might just need a slice or two. PPS seeks out the best pies, then divides each pie to serve many businesses, resulting in the full pie being utilized. Still, each client gets the amount of pie they need to be successful.” Businesses can find stability, expert guidance, and a predictable cost structure by partnering with PPS Solutions.

The second element of PPS Solutions, on which John is adamant, is the focus of the financial professionals on his team. “We focus on becoming part of the businesses we serve,” he states, “we identify ourselves with the company and always act in its best interest. Some firms in the Fractional CFO space operate on a consulting model – meaning that the CFO views the client as someone to sell additional services to. PPS operates on an internal model, where our CFOs imbed into the company and become your finance department. We’re your team, not consultants and not outsourced help.”

Under John’s leadership, PPS Solutions champions the cause of businesses, irrespective of their growth stage. They strive to partner, guide, and alleviate the administrative load many entrepreneurs grapple with. In essence, they free business leaders from operational shackles, letting them channel their energies into growing their businesses. And in high-stakes scenarios like fundraising or investment pitches, having a seasoned CFO in your corner can add immense credibility.

To explore PPS Solutions’ comprehensive financial services and learn more about their mission, visit their website today.

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