5 signs you’re ready for a part-time CFO
Money is the backbone of business. Not to reiterate what a basic business degree would teach you, but you can’t run a business without proper cash flow! According to research from the Bureau of Labor Statistics (BLS), of all the millions of businesses that fail worldwide, 45% go under due to a lack of profitability or capital.
Of course, you already know businesses need money to succeed. But once you “get into the trenches” of business, managing your finances is often easier said than done. Sometimes, it helps to have someone around who knows their way around money. Perhaps it’s time for your business to hire a part-time chief financial officer (CFO).
A part-time CFO (or fractional CFO) is exactly as it sounds. It’s a part-time financial expert who can manage your finances and provide financial advice without costing you an arm and a leg on a full-time CFO salary.
If you think it might be time for a little financial help for your business, here are five signs that you’re ready for a part-time CFO.
Your business lacks a long-term financial strategy
Where is your business going to be next year? What about in five years? Fifteen?
If you don’t have specific answers to each of these questions, a part-time CFO could help — and no, saying “I plan to grow” doesn’t count.
You need a specific, realistic, and attainable long-term financial goal if you want to prevent fizzling out. That’s where a part-time CFO comes in. They can help you develop a complete financial strategy, including milestones and roadmaps, that you can follow to future success.
You’re having trouble making business decisions.
Poor decisions aren’t a sign of bad business intuition. They’re a sign that you don’t have the right data. Financial data drives informed decisions. And if you don’t have the right data, how can you expect to make the best decisions for your business? Warren Buffet doesn’t just guess when it comes to investing!
If you have trouble making the right business decisions, or if you’ve made a few that didn’t turn out so well, it might be time to start looking for part-time CFO services.
A financial expert like a CFO will be able to compile and monitor the right data,
including:
→Cash flow
→Working capital
→Forecast of liquidity
→Growth rates
→Essential KPI
→Economic factors
→And much, much more
No one is watching your finances closely
When you first started your business, things probably looked a bit different. You weren’t managing
multiple teams, chasing vendors, marketing your services, and about a thousand other things during the
day like you are now. After a while, finances take a backseat to many other business aspects.
But as we learned from the intro, your business needs money to operate! So it’s not something you can
just put on autopilot.
If you find yourself spending less and less time looking over the books, part-time CFO services might be
in your future. Having someone keep a close eye on your finances is the best way to identify
opportunities and even cost-saving errors.
Your business is growing
It may sound odd, but growth is often the downfall of business. Yes, it’s exciting to watch your invoices
get bigger and bigger every month, but your operation needs to be able to keep up. If it can’t, well, just
imagine what happens if a skyscraper is built on a toothpick foundation…
Business growth requires more expertise. You want to ensure your growth is sustainable, so you can
keep growing in the future without toppling over. Part-time CFOs can help you with additional
compliance, legal, and tax rules that come with quick growth. They can also help you identify and avoid
associated risks, so you can keep safely climbing toward the sky.
You aren’t ready to hire a full-time CFO
The average salary for a chief executive is $179,520 annually. Many CFOs make upwards of $300,000 to
even $500,000 per year! That’s a lot of money, and many businesses just aren’t ready to put down that
chunk of change to get the expert help they need — no matter how bad they might need it.
Luckily, if you aren’t ready to hire a full-time CFO, a part-time CFO can give you the same expertise at a
fraction of the cost.
Naturally, since they aren’t at your office all day every day, a part-time CFO will receive a part-time
paycheck. You can get the expert financial advice you need to help your business grow without the
financial risk of hiring a full-time executive.
Even if your goal is to hire a full-time CFO in the future, a part-time CFO makes a great filler until you’re
ready to hire the full-time exec of your dreams.
Find a part-time CFO that works for your needs and budget
A business is only as good as the team that runs it. If you find yourself lacking a long-term financial
strategy, having trouble making business decisions, failing to keep a close eye on your books, growing
your business quickly, or aren’t quite ready to hire a full-time executive just yet, a part-time CFO could
be the best choice.
With a part-time CFO, you can get the same financial expertise to support your business without the
massive cost. It’s a great option for smaller businesses and startups that might not have the cash flow to
hire a full-time executive.
If you are interested in having an executive sounding board on where your business is financially and
what you should do next, schedule a free consultation and we can talk through your business.
After a quick no-obligation evaluation, we can set you up with a fractional CFO to guide your business
into the future. Don’t wait. Get on the path to financial success today!