Hiring a Chief Financial Officer may seem like a far-fetched and expensive option for your small business. However, when your business experiences unexpected and rapid growth or becomes large enough that the financial responsibilities are becoming too much for the owner and staff you may start to wonder what your options are. Gaining expert financial knowledge from a professional such as a CFO is possible with the help of outsourced part-time CFO services.

Hiring a full-time CFO costs an average of $200,000 per year when benefits and salary are added together, which clearly isn’t a price that many small businesses are willing or able to pay. Part-time CFO services, on the other hand, are an affordable option for small business owners who can pay for exactly what they need. Additionally, you don’t have to sacrifice any of the great benefits of having a finance pro among your ranks.

Part-time CFO services manage cash flow, reports financial information to management efficiently and performs other important finance-related tasks that can fall under the radar at busy small businesses. They also can train qualified employees to do some basic accounting work. All of these great benefits come to you without the high overhead costs of annual salaries and benefits as well as Social Security and Medicare pay-ins.

Startups today can greatly benefit from the expertise of a chief financial officer, so it’s vital that you know when if and when you are ready to take on a part-time or remote CFO.

#1. Investors are Showing Interest

For many small businesses, investors showing interest in your business is a marker of success. While it is exciting, small business owners shouldn’t be eager to jump at the first offer. A part-time CFO’s skills can really shine in this period of uncertainty and growth.

A part-time CFO will ensure the company is able to meet its financial commitments and manage cash flow in the most efficient way. He or she will also carry out the issuing of any debt, managing investments, and handle other liquidity-related decisions. Part-time CFO services will also help you establish a strategic outline that will illustrate what will be done with the funding and how it would benefit your small business or startup.

The majority of chief financial officers skill sets are focused on controllership skills, managing and analysis finances based on past financial records, in addition to keeping a close watch on capital structure. When approached by investors a CFO can help you decide if your startup would indeed benefit from an investment and on what terms and conditions you are willing to agree to.

#2. Developing a Loyal Customer Base

Small business owners must prepare their business plan before bringing in a part-time CFO to help sort out finances. Startups and small businesses should be keeping track of growth by monitoring your consumer base. It is essential to identify what your customers expect from you as a company and what marketing tactics are most effective when it comes to attracting and retaining customers.

As your small business begins to generate more interest and attract leads, a part-time CFO can help you develop effective strategies based on attracting consumers based on your current growth activity. Budgets that consider consumer needs, will help you make smarter investments in marketing and also understand where improvements need to be made in order to encourage customers to stick around.   

#3. You Need Help with Forecasting

Becoming familiar with the biggest trends minimizes the struggle with increased efficiency and a more streamlined approach to managing corporate finances. If you need professional tracking of growth and performance before you make your next business move, hiring a part-time CFO would be incredibly beneficial.

CFOs recognize the value of current and other emerging accounting technologies. Understanding how to implement and utilize the right combination of systems results in a more stable financial state and improved corporate growth. Modern accounting technologies are efficient, scalable and secure, providing just what CFOs need to ensure success

#4. You are Selling your Business or Acquiring a New One.

You might think that your company’s financial statements are difficult to misread. After all, the revenue and expense numbers that they list are plain and unambiguous, right? The truth, though, is that business owners and managers misconstrue their financial reports all the time.

During a transaction, a company’s chief financial officer will be a central figure. Though the chief executive is often the focal point of a company’s operations, the CFO will share with the CEO the key responsibility for driving a deal forward in his or her capacity as the foundation of the company’s financial function.

If you are preparing to sell the business or purchase/merge with another company, it wouldn’t hurt to have a CFO assist in such a serious financial change.

#5. When You’ve Experienced a Sudden Departure of a Financial Executive

Many good practices can slip in the time it takes to hire a new CFO. Hiring a CFO or Controller is sometimes difficult for a CEO, as there are many aspects of the CFO role that are not well understood by those outside the finance function.  Having an experienced financial professional assist in the hiring process helps to ensure that the new hire will have the solid financial and technical skills required for the job.

What’s Your Range?

One of the biggest questions you should ask yourself when hiring part-time CFO services  is, “What’s my range?” Simply put, your range is how far your skills can stretch, particularly into areas you are not necessarily prepared for. Knowing your range is the single most important concept to keep in mind when you begin this process. When hiring a CFO, determining your range depends on your financial skills and the financial skills of your team.

Ask yourself these questions:

  • Can you take a company to or past a Series A without a CFO?
  • Could you handle corporate tax compliance or annual revenues of over 10 million?
  • Would an accountant be enough for you to breathe easier?
  • Do you have the skills to plan for the future while staying compliant with the past?
  • Do you understand things like cash flow, run rates, profit and loss, etc.?

If those questions bring you a certain uneasiness than you should probably invest in a team member who can help you such as part-time CFO services.

Don’t Wait too Long!

Some articles say to wait for more than 25 million in ARR or until you’re close to an IPO. We think that’s probably too late for a lot of companies. Part-Time CFO services can help you position yourself for that IPO or strategize how to approach your next round. You don’t want to miss out on the benefits a CFO brings to the table because you waited too long.

Final Thoughts

Not only will part-time CFO services save you money in the long run, but you’ll also get access to experienced professionals who have worked with several other startups. They’ll be even more equipped to spot opportunities and threats, then to act accordingly. Hiring this way puts the experience of the experts in your hands, giving you the best bang for your buck.

Limitless Investment & Capital’s Remote and Part-Time CFO Services

Growing businesses often reach a point where they need professional financial advice, but can’t afford a full-time CFO or controller. If you’re fortunate enough to be in this position then we have the perfect solution for you. Our Part-Time CFO service gives you a professional financial manager who works with you to help guide your business to success. If you’d like to learn more about our Part-Time CFO Services please contact us to get a Free Consultation.