Before you and your small business hires a part-time CFO, we breakdown what expectations you should have.
“Should I hire a part-time CFO?”
We get this question a lot.
Especially from firms who have a solid bookkeeper or in-house accountant and haven’t experienced the benefits of a senior financial leadership.
Most firms focus on generating revenue and product/market fit when they launch. But as they grow, their risks start to grow too. They take on more staff. Investments in space increase. The size of their contracts get bigger.
And they start to have questions that maybe weren’t a priority in their first few years.
Like these questions …
- We run a reasonably profitable business but we’re always short on cash. How come?
- We spend a lot on freelance labour. Do we have enough business to justify another creative team?
- What does “good” look like by marketing agency standards and what do we need to do differently to get there?
- Which of our clients are the most profitable?
- How much revenue should a firm my size be doing?
Beyond that, our clients often come to us when they are looking for someone experienced to help support their in-house or out of house team.
The benefits of hiring a part-time CFO are numerous, especially if you hire one experienced in your industry.
Should I hire a part-time CFO? What To Expect When Hiring a Part-Time CFO
Hiring a part-time CFO may be what your growing firm needs to reach its full potential. It depends what your firm needs to get there. Here are the top 6 things you can expect when hiring a fractional CFO:
- Strategic Planning
- Improved Management Reporting
- Scenario Planning
- Performance Bench Marking
- Business Liaison
- Experienced Leadership
1. Strategic Planning
A part-time CFO will seek to understand what the financial goals are for your business and will work with you to build a plan to get you closer to your financial goals.
Beyond that, hiring a part-time CFO with experience in your industry can help paint a picture of what good looks like and will work with you to get there if you aren’t already.
2. Improved Management Reporting
Evidence-based decision making is critical to your success. Hiring a part-time CFO will help your in-house team build better financial reporting.
As your business grows, understanding operating metrics like client performance, year over year performance and revenue per employee will become even more important.
A part-time CFO will work with your team to ensure that you get monthly visibility into your operating performance. You’ll be able to make decisions more quality and will feel more confident in the decisions you are making.
3. Scenerio Planning
As your business grows, the decisions available to you change.
Do you ever wonder what the impact would be if you chose one path vs. another?
A part-time CFOs will work alongside your management team to quantify the impact of various paths you may choose. By doing so, you’ll be making decisions with your eyes wide open.
You’ll also understand how this impacts the larger goals you have for your business.
4. Performace Bench Marking
When you hire a part-time CFO with experience in your industry, they will be well versed in what good looks like.
You can expect that they will review your historical financial performance and let you know how your performance ranks vs. the best performing businesses in your business.
Given their depth of experience, they can provide insight into things like market rates, market salaries, and things like benefit programs and insurance best practices.
Small improvements to all of these things can make a large impact on your profitability.
5. Business Liaison
When you hire a part-time CFO, he/she will want you to focus on growing your business. Because of that, they will act as a liaison with your other professional advisors, including legal services, tax accountants, and other financial institutions.
6. Experienced Leadership
Just like you are an expert in your craft, you can expect that a part-time CFO is an expert in the financial management of businesses. When you hire a part-time CFO, you can expect to have experienced financial leadership added to your management team and a coach and a mentor to your in-house team. Beyond that, you get the peace of mind that goes with having executive level oversight.
Should You Hire A Part-Time CFO?
We know that you didn’t become an entrepreneur to get lost in the day to day financials of your business. But, as your firm grows, you realize how important having an understanding of your financial position is, not to mention having a future-focussed view.
If you find that you’re spending more time worrying about your financial performance than focussing on growing your firm, you might be ready to consider hiring a part-time CFO.
At Finally we believe that access to good financial leadership isn’t just for big businesses.
Hiring a part-time CFO may be just what your growing firm needs to reach its full potential. If your firm is in the architecture, design, or marketing industry, get in touch to see how we can help.
READY TO HIRE A PART-TIME CFO?
We provide part-time CFO and advisory services to marketers, designers and architects. Check out the five questions to ask yourself before hiring a CFO, and if you think we’d make a good partner, contact us.