For most small businesses the need to hire a CFO is not high on the key hire list. However, when a business experiences unexpected rapid growth or the complexities of the day to day accounting are outside of the skill set of either the owner or staff, the investment of hiring a CFO will pay for itself ten times over.
The payoff will be inconvenience, accuracy, timeliness as well as having peace of mind that the financial aspects of your company are being over the scene by a trusted individual. The downside, on average a full-time CFO can cost upwards of $175,000 per year once you factor in benefits and salary, which most small business owners won’t or can’t pay. There is an alternative for small business owners to gain the services and knowledge of a CFO. It is just not in the traditional sense.
Should I Hire A CFO
Engaging with a part-time, contract CFO can save a small business owner a significant sum of money without sacrificing the ability to have a finance pro as part of your team. A part-time CFO can oversee and manage cash flow, report efficiently, and timely financial information to management as well as perform other important tasks that typically fall under the radar of any small business. The best part is all of these benefits can be had without the high overhead costs.
Hiring a Part-Time CFO
If the addition of a financial officer to your companies’ team would be beneficial, the next step is finding the right one. Your CFO is going to oversee your businesses finances and be a key member in your decision-making process, engaging the wrong person could be a costly mistake. Questions to consider when interviewing individuals:
- How have they helped other small businesses take control of their finances?
- What experience do they have in your industry? Have they worked in your industry before?
- What other skill sets can they provide your company outside the financial skills?
- Would other small business owners recommend working with them? Often times asking for references can provide a great deal of clarity.
Signs your business needs a CFO
For small business owners, decisions are made at the speed of business. Having sound accurate financial information readily available to make business decisions is key to moving the needle in your business. Other significant events that would warrant your company engaging a CFO would be:
- You are considering outside investment in your business from investors. Having a CFO on staff to meet with potential investors says a lot about your company.
- You need clarity on the financial direction of your business. Forecasting financials are key in putting your company on a path to success. Being able to foresee constraints well in advance and having time to proactively react is a big benefit of having a CFO.
- Selling, Acquiring, or Merging a Business. If you are at a stage where you are considering making a dramatic shift in the makeup of your company, it wouldn’t hurt to have a CFO on staff to help navigate the various issues.
If your business is at a tipping point and the financial aspect of your business is not giving you the information you as an owner need, hiring a part-time contract CFO should be next on your to-do list. A Part-time CFO will give you the vision and insight to help steer your business and become an integral part of your team.