An often-overlooked role in smaller businesses, a Chief Financial Officer (CFO) could make the difference in meeting your goals in the coming year. A company needs all manner of money people to keep things moving. Your bookkeeper enters transactions and codes expenses. Your accounting firm handles taxes and filing. They’ll both hand you a report and manage the numbers. Your CFO takes those reports and makes it all come together, aligned with your strategic plan.
No matter what size, your business can benefit from a CFO – even if only part-time
Perhaps you don’t have a CFO because you’re lean, or you just haven’t considered expanding your leadership team. Either way, it may sound like another salary to justify. But you can hire a CFO that will work as much as you need them – and they’ll find serious ways to shrink your budget and grow your revenue.
Consider a Fractional CFO, someone that’s on your team as a consultant or on a part-time basis but has the experience and perspective to bring full-time results. Here, our (un)Consultant Business Coach Mike Knapp talks to Matt Putra of (Your) Fractional CFO / Eightx about how a CFO can help your business, and how a part-time, or fractional, CFO works for you.
So, what should the CEO of a small business expect of a CFO?
Part-time or full-time, your CFO should help build the long-term view and mission of your business, and make sure the cash and the plan are in place to get there. How does that happen? Consider your CFO as a financial guide, sharing the story behind the numbers. That story shapes your business strategy to help you grow.
A CFO should be with you for the long-haul, no matter how many hours a week or month they’re spending with you. They’ll learn your business inside and out to better help you assess potential projects for growth and scale. While some of the advice and work a CFO will bring to the table is hard to generalize, there are real tangible results you can expect from working with a CFO:
- Actionable financial forecasts
- Reducing uncertainty
- Managing cash flow
- Cost savings
- Margin growth
- Sales growth
Essentially, you can expect a quality CFO to bring the insight to help you strategically grow your business as you intend to.
Is my business big enough for a CFO?
It’s possible you don’t have the cashflow to justify another expense at the moment. If not, consider that as an early-stage entrepreneur, you should have a CFO on your advisory board. As you grow, that person should become part of your leadership team, and will be well-versed in both the history of your business and in the state of your finances when the time is right.
If your company is pulling in revenues of $1 million+ annually or making big investments in materials or large-scale projects, it’s definitely time to start looking for a fractional or fulltime CFO. While businesses that are just starting out may manage to operate with only a bookkeeper and accountant, scaling your resources, systems, and processes strategically will take the finesse of a seasoned professional.
A CFO won’t be a “yes”-person. They’ll bring their expertise and tell it like it is. As a CEO, you should expect some difficult conversations and perhaps some disagreements – both of which will help provide a balanced view to make better decisions.
Matt Putra is a Fractional CFO that helps business owners optimize their cash flow so they can get keep their businesses growing, stop worrying about resources and get back to enjoying the journey.