Every founder I talk to running a $1M to $20M business can tell me, within seconds, roughly what their revenue was last month. Most can tell me their overall margin too. What almost none of them can tell me, without really thinking about it, is whether that margin is actually good for a business like theirs: their industry, their stage, their people, and where they want the business to go.
Owners know that pause. It’s the feeling of making decisions off of instinct and a monthly P&L that’s accurate but doesn’t provide nearly enough to feel confident.
And what counts as good moves too. A margin that’s strong for a five-person shop just getting started looks thin for the same company two years and a dozen hires later. Industry norms don’t hold still either.
Someone has to keep rebuilding that comparison as the business changes.
And that’s a structural gap faced by most businesses in the $1M to $20M revenue range, and it’s the same gap I worked on for about two years prior to starting Sightline Partners.
Two years ago I joined a SaaS company as CRO. Early revenue. Big ambitions. No dedicated finance function, and nobody yet owning the layer between the books and the decisions. That job became mine too, and over time so did the acting CFO seat. Whatever infrastructure the business needed, we built while it grew, because there was no time to wait. By the time I moved on, the company had a real, recurring revenue base, anchored by enterprise customer contracts with their own billing requirements, and a finance rhythm the team could carry forward.
The lesson that stuck with me most was the realization that small and medium businesses need quality financial support just like a fortune 500 company. Just on a smaller, often fractional scale.
Why?
Because the P&L, balance sheet, and cash flow statement all provide critical information about what happened in the business so far, but they don’t tell you what decisions the numbers are pointing toward or what the leadership team might need to do next.
Somebody still has to connect the accounting to the decisions the business is making. In a lot of owner-led companies, nobody actually owns that job. Not because anyone made a bad call to skip it, but because most businesses in the $1M to $20M range don’t have anyone to do that job.
And that’s understandable when the average total cost of a CFO today is >$300,000 according to Glassdoor.
Here’s how the gap usually plays out. The bookkeeping is accurate, the CPA handles compliance and taxes properly, and monthly close statements are received on time. But something still feels off.
Does the P&L say you turned a larger profit than what you see in the bank? Which service line is actually earning its keep? Which service line should we invest in? Can the cash position nine weeks from now support the hire we just approved? Do the numbers finally justify the price increase we’ve been putting off?
All these questions point to the job nobody owns, so the owner or leadership team ends up making six-figure decisions with whatever information is available and filling in the rest with instinct.
I’ve seen versions of this across very different industries.
An MSP running managed services alongside project work sees it in blended margin numbers that hide which contracts are actually profitable. A SaaS company sees it in a revenue number that keeps climbing while the mix underneath quietly shifts from durable recurring revenue to usage-based revenue that swings hard month to month. A property management company sees it in a portfolio of doors that all look similar on a summary report and aren’t remotely similar once you separate flat management fees from maintenance markup.
And none of this is a knock on bookkeepers or accountants. They do great in their job. It’s just a different job, and therefore, it’s an issue of scope.
Asking a bookkeeper to also provide forward-looking financial strategy is asking someone trained for one discipline to perform a second, different discipline they were never positioned to do. So you can definitely have excellent books and a fantastic accountant, and still have this problem. And I’d argue most businesses under $25M in revenue have this problem.
Why? Because accurate financials don’t solve the question of what management should do with them.
I started Sightline Partners to build that layer, on a fractional basis, for businesses in the $1M to $20M revenue range.
The goal is to take the information the bookkeeper or accountant are already producing, and use it to help owners and the leadership team run the business.
What does this look like in pracatice?
At it’s core, it starts with seeing your cash position several weeks out instead of managing off today’s bank balance. It might mean knowing margin by service line rather than just company-wide margin. It could mean evaluating different scenarios for staffing and growth to help teams visualize results. And every month, it means identifying the two or three decisions the numbers actually point to.
There’s a pretty simple way to tell whether that function exists in your business.
Pick a number you don’t already have memorized, preferably one that could bring you serious insight into the health of your business. One example might be the margin of each service line and how they’ve grown or shrunk over time. A second example might be what it costs to deliver services and how that cost has grown or shrunk over time. Then time how long it takes to get the real answer.
If that answer was harder to get than it should have been, that’s probably the gap.