Steve Ellis is the epitome of a modern CFO and a growth leader for SMEs in the Yorkshire region.

We first met Steve over 15 years ago when he joined Q-Park as Finance Director for UK and Ireland. We recently introduced him to Mattress Online in Rotherham, to be their Fractional CFO, and were delighted to catch up with him at our CFO Dinner with Endless last month.

With growing SMEs and Fractional CFOs featuring so significantly in our strategy, interviewing Steve to share his story with our network was attractive for obvious reasons. He has a classic CFO history – Big 4 trained, climbing through head office and operational finance roles, over 20 years at board level and with experience of plc, private equity and OMB environments.

“Fractional CFO for growing SMEs” – it is the ambition of many to reach this position and status in their careers.

Tell us about your journey to get to this point

I retired from Q-Park in July 2022, a week shy of my 57th birthday. It’s a brilliant business and I loved working there, but after 13 years as FD I’d done what I wanted to, and frankly no longer wanted to work 5 days a week. So, I found myself a 2 day a week FD job (in a recruitment company!) and it started from there…

The job was great for me because it was more of an advisory role to the owner – the accounts were simple and well controlled. It was clear that after 36 years in finance I knew a lot more about people and business than I perhaps realised, and that I enjoyed passing on this knowledge and especially helping smaller, growing businesses. The recruitment job diminished, and I branched out into being a proper Portfolio FD / Fractional CFO. It was never a plan to do this – just a desire to work 2 days a week and be useful – but it’s tremendous fun, and working with smaller businesses and passing on knowledge of all types is satisfying.

Over the past 3 years I have worked with 8 different businesses, as well as doing a small amount of mentoring for young, up and coming FDs. Every business needs different types of support, so you need to be flexible. Sometimes strategic, other times support with auditors; often there are financing constraints, and once I spent several days reconciling a tricky balance sheet account which hadn’t been looked at for 4 years! This was satisfying, as at the end of it the company recovered £50k in cash, so I definitely paid for myself.

We have known Mattress Online for a few years – tracking the growth, fundraising and acquisition. How have the first few months been for you?

The first few months have been great. It is an established business and the owner has a clear plan for the next 3-4 years. For me, it’s interesting because it needs strategic as well as some mentoring and financial input, so it plays to my strengths. E-Commerce is a sector I have worked in before, although this is more complex and advanced in terms of IT, so more numbers to play with! I love the fact that everything is real time, and you can see the effect of any changes made. We see a lot of value in A/B testing.  

The future is focused on growth. FDs are often described as Sales Prevention Officers, and of course there has to be a focus on costs, but for me, growth comes from investment and I want to support that. It’s always about the business – the numbers merely confirm what you should already know. We see opportunity to scale up and we want to achieve that.

What advice would you give to a business owner bringing in their first Finance Director?

Decide what you need! If you simply want more accurate numbers then you need a Financial Controller or Management accountant, rather than an FD

A Finance Director will help you understand your accounts, eliminate control weaknesses and provide support to the finance team. They will also be more forward looking so can provide strategic support for growth and, of course, exit or succession planning. They can also act as a sounding board which is useful for owner managers – it can be a lonely place at the top.

For smaller and growing businesses, the portfolio or fractional model works brilliantly. You get all the experience and knowledge without the full-time commitment.

We don’t get the chance to talk to many CFOs who have Big 4, PE, plc and OMB on their CVs. How does it help you and the businesses you work with to have this blend in your experience?

As I alluded to earlier, you know more than you realise. I have worked in many different environments, and reported to Head Offices in Hong Kong, Maastricht (and Keighley!). It becomes less about technical accounting knowledge (your accountants or auditors will provide that) and more about familiarity with different business situations and how to work with business owners.

What are the main benefits of being a Fractional CFO for you?

Flexibility. I am lucky that I am able to choose my clients, and every company I have worked for has been an enjoyable experience. You learn something from every situation, and I have met some really interesting people along the way. Obviously younger FDs who are considering this will want to work full time, and I wouldn’t underestimate the amount of networking it takes to become established. For me, flexible part-time working with interesting and diverse clients has been a fantastic experience so far.

Flexibility also extends to growing companies who think they need FD support. The fractional model allows you to dip a toe in the water, so to speak. You can engage someone, maybe even for a day a month, and see what value they bring. If the fit isn’t right, then you can look again – there are no contracts to tie you in. I always work on a handshake – if I’m adding value, then you will want me to come back – and I commit to clients for as long as they need me.

What does the next chapter in your book look like?

Mattress Online will be my main focus for the foreseeable future; a lot to get involved in and a longer-term project. I have a couple of clients where the requirement has dropped to maybe a day a month and I will continue to support them. Sometimes the remit is to improve things to a point where you are no longer required, and that’s great – you want to be useful, not be a consultant looking to stay forever.