When is it Time to Hire a Part Time CFO?
webmanager • May 17th, 2023
If you’re reading this article then chances are good that your business is growing – congratulations!
There are few things more exciting (and tiring) than pushing your business towards success.
And while there are many roles to hire into a growing and/or promising business, there are few as important as the role of a CFO.
A CFO, or chief financial offer, oversees everything that falls under accounting and financial strategy in the business.
They are responsible for the annual budgets, forecasting growth, managing payroll costs, annual taxes, management reporting, and much, much more.
However, with so many responsibilities comes a great cost.
The average salary of a full-time CFO is more than many businesses care to invest in from the get-go, or even ever.
Which is why the part-time CFO has become such a popular role for Tech start ups, mid-sized firms, and other small businesses.
Let’s dive into when it’s time to hire a part-time CFO, and whether or not it’s a good idea for your business right now.
A part-time CFO is exactly what it sounds like: someone who acts as the Chief Financial Officer of your business in a part-time capacity.
It is usually a contracted position, and often outsourced to larger accounting firms and financial teams.
A part time CFO can help with a myriad of things – from growth strategy, to conflict resolution, and onto general management reporting – and is a great solution to the budget constraints of a full-time CFO.
If you’re reading this, chances are good that your business is likely ready. However, to give you a bit more confidence, we’ve laid out a top list of scenarios when hiring a CFO would be helpful, or even required.
A part-time CFO is essential if your business is in the process of scaling and growth. A part-time CFO can help you avoid huge financial mistakes, give financial advice to hiring decisions, lend a hand in pricing, and ensure cash flow is running smoothly. 85% of businesses that fail do so due to poor cash flow visibility. A part-time CFO will have eyes over any gaps in your business at all times.
Your business doesn’t only need to be growing to warrant hiring a part-time CFO. In fact, it can be declining or stuck on a plateau. A part-time CFO excels at identifying the strengths and weaknesses within your business, and puts together a plan to accelerate growth. If your business is in this position, there is no better hire you can make.
Part-time CFOs are in your business to set a financial direction, and keep your business on track. If you simply want to keep your business running at the same numbers year-on-year, you may be fine with a general business accountant. However, if you’re in search of an advisor to help you forecast what your business will look like in 5 years, and help you make decisions in order to get there, a part-time CFO is the right hire for you.
This one is critical. If you plan to sell your business one day, you need to hire a part-time CFO, yesterday. There are things that you should be setting up and doing in your business year-on-year in order to get the most return when you exit. We’ve written another great blog post to read about that here.
If you’re a start up in the Tech industry, it’s strongly recommended to hire a part-time CFO from the beginning. A part-time CFO can be instrumental in obtaining financing, pushing for capital raises, and providing insightful management reports that will be required for stakeholders and investors.
Additionally, as a Tech Founder, you are going to make thousands of financial decisions along your journey. Hiring someone with prior experience to help will go along way in avoid critical mistakes.
Finally, you might just simply want more from your accountant. While a good business accountant will provide a similar service to you as a part-time CFO, upgrading to a part-time CFO will ensure that someone is invested in your business, and has eyes on your financials at all time.
A good part-time CFO will not only give you a blueprint to help you reach your business goals, but will also make sure you stay on track to get there.
And what makes a good part-time CFO?
We’ll save that for another blog post!
If you’re in search of a part-time CFO for your business, you can schedule a free 15-minute consultation with us over on our calendar.
We’d love to see how we can help.
Until next time!
Samy Basta brings you more than 20 years experience in tax, financial, and business consulting to his role as founder of Basta & Company. His focus is primarily strategic business planning, empowering clients to set priorities, focus energy and resources, and strengthen operations. In addition, Samy and his firm provide strategic counsel, and technical insight, on a wide range of needs, including tax saving strategies, tax return compliance, as well as choice of entity.
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