When is the right time to hire a CFO?
Unfortunately for most business owners they learn the “when” after several painful years of struggling without one. It’s true that for most startups, a CFO is more of a luxury than a necessity.
Conventional wisdom says you should hire a CFO when one or more of the following exist: (1) Business leadership is in need of strategic financial guidance; (2) Your business needs to raise funds for future growth; (3) Your business requires advanced skills in financial analysis and/or management. Other factors play into it as well: company size, growth speed, and financial complexity in your industry.
Generally speaking, a business should strongly consider adding a CFO to their team (whether full-time or Fractional CFO), when any of the following are occurring: (1) Business is approaching $10M in gross revenues (or as soon as $5M in some service-based business); (2) Business is growing at a pace greater than 10%; (3) Owners are considering investments into the business (equipment or staff) in excess of 5% of gross revenues; (4) Cash flow management is beginning to get more complicated; or (5) The business can afford it.
What is a Fractional CFO?
We get asked this question all the time. Simply put, they are a close advisor to business owners – making sure their business is as profitable as possible while ensuring cash levels remain healthy during investment phases.
How should I choose a Fractional CFO?
When selecting a Fractional CFO, branding is not as important as the individual you work with. Simply put, you can’t train personality fit and several decades of experience. Ask questions about whether they have experience in your industry and size and have they held leadership roles in the past.
Have additional questions that are not listed above?
If you have questions, don’t hesitate to reach out to us via email blaise@outlookcfo.com or fill out our contact form.