Once your business grows to a certain point, it’s important to bring on the assistance of a CFO. A CFO’s primary role is to elevate financial strategy, streamline operations, trim fat, and maximize sustainable growth. CFOs are experts in their fields and can bring a level of strategy and organization to your business that would be impossible to find on your own.
The easiest way to determine if you need a CFO is to look at your company's growth. For example, if your company is generating revenues of over $6M or has over 60 employees, hiring a part-time CFO is advisable. While mid-sized companies will often have a full-time CFO on staff, a full-time in-house CFO is usually not necessary until the mid- to upper stages of small business growth. You'll want to start with a part-time CFO and could even consider outsourced CFO services.
Aside from the size of your company, here are some signs that your business needs to look into hiring a part-time or outsourced CFO:
YOU CAN'T OBTAIN EASY ANSWERS TO YOUR QUESTIONS. It takes detailed financial knowledge to make informed business decisions. If you find yourself unable to get useful data your financial team it will prove difficult to make financial or strategic decisions. A CFO aims to make sure your company can engage in a higher level of strategy for sustainable growth. He or she will get the answers you need on your company's finances and help form a strategy for the future.
YOUR COMPANY IS LOSING MONEY—BUT YOU'RE NOT SURE FROM WHERE. If company spending seems to have gotten out of control but you're not sure of which costs to cut or how to make those cuts, then you need a part-time or outsourced CFO. A CFO will help ensure your business’ spending is strategic spending. A CFO can analyze your cash flow to determine where your money is going and eliminate unnecessary spending. He will also utilize his knowledge in benchmarks and vendor relationships to help optimize company spending and keep it competitive in the market.
YOU'RE RAISING CAPITAL. A part-time or outsourced CFO's services will be very useful when wanting to raise capital. This is especially true if you aren't sure how much you need to raise, don't have a strategy for the right debt-to-equity ratio, or are raising a series C or later.
Your part-time or outsourced CFO will utilize his extensive knowledge and experience to benefit your company operations. Your CFO will likely have already worked with companies in similar stages and industries and draw on his past relationships and draw on his credibility to help achieve company goals. A part-time CFO will be valuable in steering your company towards key financing strategies, practice due diligence in defining contract terms, and advise on company financials.
The benefits to hiring a part-time or outsourced CFO are numerous. If you're considering outsourcing CFO services for your growing company, look no further than Business & Accounting Solutions. Our CFO services include bookkeeping, cash flow, finance consulting, and more. Contact us or call (503) 710-6213. Know someone in need of CFO services? Consider our referral program.