You started your business because you had a skill (product or service) to share with others. You wanted to take something you learned in your 9-to-5 job and grow it into something bigger than you could if you stayed in corporate.
And you were able to do just that. You spent time creating products, developing services and serving the people who needed what you had to offer.
At some point, however, you realized that you didn’t necessarily have the business acumen needed to grow bigger. Maybe you find reading those financial statements a challenge or you don’t feel you have the time or resources to plan strategically for growth.
Wherever you’re feeling the squeeze, adding a virtual chief financial officer (CFO) as a consultant might be the right next best step for your business.
As a start-up or growing business, you know what it’s like to grow your team. A virtual CFO shouldn’t be your first hire. They’re your hire once you’ve seen growth and need to know what’s coming next, down the road.
Hiring staff members is difficult–and expensive. It’s hard to know you’re making the right choice in hiring, and hiring employees (versus contractors) means a more permanent relationship. But having that consultant role, along with CFO expertise, is a pivotal part of a larger business.
A CFO has a unique skillset, making it a more expensive hire than your assistant or other team member. But hiring a virtual CFO allows you to bring someone on part time, saving you money while still having the best possible fit as part of your go-to team. Besides, while you may need a CFO’s expertise, you likely aren’t quite ready to bring on a full-timer in that role. Having a consultant on retainer who has CFO experience is important.
What can a CFO do for my small business?
First off, it’s important to note that the CFO is not the one that does the bookkeeping. However, they should work with and interact with your bookkeeper, as needed.
Think of the CFO as the financial translator and mentor for your business. She can help you and your stakeholders read your financial statements and help you make educated decisions about investments, cash control, budgeting and more. And she does this from an independent perspective–so while she’s invested in giving you sound advice, she doesn’t actually have skin in the game.
Your virtual CFO should also work with your bookkeeper, accountant and tax preparer to make tax time a lot smoother–and help you make decisions about changes for the next tax year. As an added bonus, you may even be able to outsource management of your in-house (or virtual) accounting to a virtual CFO if you have multiple financial roles in your organization. One less piece of your business you need to manage on a daily basis, so you can spend more time on the growth and development of new products and services–the things that are bringing in the money for your business.
Am I ready?
Not every business needs a virtual CFO, and bringing one on before you’re ready will cost you. I recommend waiting until you are at a pivotal point that you need a professional’s financial expertise to help you budget and plan and make decisions for your future. It’s a very high-level position for businesses that are looking to grow in big ways, and the position looks very different for product- vs. service-based businesses.
Not only does Number Nerd offer CFO services, we also work with a number of virtual CFOs. As consultants, we can help you determine whether you’re ready for this role in your business. And if you are, be sure you’re on my email list–this week I’m telling you exactly what you need to look for when hiring someone.