The Movers, Shakers and Dealmakers Interview
Scott Anderson has over 20 years of client experience building reliable financial projections. His investment banking, restructuring and hands-on modeling experience combine to provide unique insights about the cash demands at each phase of corporate growth. He brings these insights to each client discussion when assisting with short and long term business planning.
Fundology: Please tell us about the services that your firm provides.
Anderson: We provide a forecasting of services, specifically helping companies improve the quality of their forecasts. I work with really two types of companies. One is what I would say is lower-middle market firms; low fifty million in revenue. And the other major market area is start-ups. Both companies have major needs to improve the quality of their forecasts.
Fundology: How do you add value for the companies that you work with?
Anderson: It depends on which market. The value is added a little differently for each of the two markets. Fundamentally, the major value is an improved quality forecast. What are the benefits of that? It is like improving your radar, looking out into the dark night ahead. Helping guide your company forward. Those issues are different for the midsized firm and the start-up firm. In particular, the midsized firm often has grown to its current size without paying attention to the infrastructure necessary to have top technology behind their forecasting processes and procedures. That will become apparent if they try and move to the next level; reaching $80 or $100 million in size. I help those firms by improving those processes to improve the quality of the forecast.
The start-up firms have a little different requirement there. Clearly, a start-up firm has the vision, the idea. They’re excited, they’re looking to move ahead and, “Oh by the way we’re going to have to raise some money to help get that company ahead and fulfill those dreams.” Often the founder doesn’t have the financial skills to be able to prepare a model that accurately predicts how much money they’re going to need. So for the start-up I typically offer a number of valued components of that process of moving to early revenues, to a point where they can begin to move ahead and proceed with successful capital rates.
Fundology: Now what makes your services different from your competitors?
Anderson: The primary reason is my singular focus on the forecast. Almost anybody can present and prepare a forecast. The issue is, what’s the quality of that forecast? Forecasts come into play in many different times throughout a company’s growth or life, such as a transaction if a company is about to be sold.
Forecasts are used implicitly by the investors and by lenders trying to establish a line of credit. And often each one of those forecasts is directly impacted by the preparer, the bias that may be in place by the user or by the consumer of the forecast data. Unfortunately, that tends to skew the quality of the forecast by moving away from the facts. That is directly at the heart of what’s behind a quality forecast. Those are the sorts of issues that I focus on and certainly for start-up companies. My start-up clients, in focusing on the underlying drivers of the business, we actually are able to focus on fundamental issues like; why is the company there? Where is it going to make its profits? Where are customers coming from and so on. It’s central to both clients, in particular the start-up.
Fundology: What is a challenge that you have faced in starting and growing a company and how do you overcome that?
Anderson: As a new company it faces a challenge of keeping all the balls in the air. The challenge is to find the important ball; focus on that one. And you have got to figure how to do that if you’re going to be successful. It’s important to identify that important ball, mainly the ball that is most critical to the strategic growth path of the company. Literally every day I’ll write down a set of tasks that are on my plate and will focus on the top task — get it done. Go to task number two, get it done. There may be some things I don’t get to but I can be comfortable knowing that I’m accomplishing the primary tasks that are central to my strategic plan.
Fundology: What is the most critical thing when it comes to moving your company forward?
Anderson: The challenge facing my company now and moving ahead is scaling up. One of my products consists of standard, off-the-shelf products that a company can use as is. They can also work with me. I can provide advisory services to help them build better forecasts.
In scaling up my business, I need to find people who can deliver those advisory services. It’s all about the people, regardless of the size of the firm. With a small firm it’s especially critical what the team’s capabilities are. It’s a little more of a challenge for me to achieve high growth, high scale as opposed to a web-based platform that can achieve very high growth rates in a very short amount of time. That’s my challenge moving ahead.
Interested in learning more or in connecting with Scott Anderson? Please visit: www.fundology.com.