If your small business is growing (and especially if it is growing rapidly) or you are facing a financial challenge, a fractional CFO can be a valuable asset. These CFOs can help you make better decisions, improve your financial performance, and reach your business goals and objectives.
There are many reasons a small business owner should hire a fractional CFO. Some of those reasons include:
- To help with financial planning and forecasting. A fractional CFO can help a business owner develop a financial plan that outlines your goals and objectives and how you should go about achieving them. They can also help create financial forecasts that will help a business owner make better decisions.
- To help with budgeting and cash flow management. A fractional CFO can help create a budget that will help you track your spending and make sure you are not overspending. They can also help you manage your cash flow so that you always have enough money to cover your expenses.
- To get help with taxes. A fractional CFO can help you file your taxes correctly and avoid costly mistakes. They can also help you plan for tax season so that you are prepared to pay your taxes on time.
- To help in raising capital. If you are looking to raise capital, a fractional CFO can help you prepare your financial statements and pitch your business to investors. They can also help you negotiate a term sheet for capital investment in your business.
- To obtain help with mergers and acquisitions. If you are considering merging or acquiring another business, a fractional CFO can help you assess the financial viability of the other business and negotiate the terms of the deal.
Here are some additional signs that it may be time to hire a fractional CFO:
- You are facing a financial challenge, such as a cash flow shortage or a decline in sales.
- You are considering expanding into a new market or product line.
- You are planning to raise capital or acquire another business.
- You do not have the time or expertise to manage your finances yourself.
What to Keep in Mind
When considering hiring a fractional CFO, it’s wise to keep these factors in mind:
- Screen for a fractional CFO who is experienced in your industry.
- Get references from other businesses that have worked with the fractional CFO.
- Be clear about your needs and expectations.
- Set a budget and make sure you are comfortable with the fees.
If you are thinking of hiring a fractional CFO, reach out to us for help. We have 30+ years of experience providing fractional CFOs to businesses.
Doug Kennedy, Partner, CFOs2GO Division of 2Go Advisory Group, works with family offices and family business leaders on a variety of financial issues related to intergenerational wealth including succession planning and financial planning. He advises on outsourced accounting and reporting to family business leaders and stakeholders, selection of investment managers, insurance programs and trust and estate planning to insure the preservation of family wealth.