When a Business Needs a Fractional CFO
As an entrepreneur and business owner your time is focused on operations, and you likely rely on others to ensure that finances are in order. As a result, many owners feel out of the loop and wonder if they know everything there is to know to optimally pilot their company. Internal accounting staff is typically focused on historical financial data which means your business must react to its current environment and circumstances rather than taking a proactive approach. To run your business with a forward-looking perspective, there is no substitute for the experience, insight, and expertise of a CFO.
Not all companies need a full-time CFO – but they do need the expertise – and that’s where a fractional CFO makes sense. Just as the word implies, fractional simply means that services are rendered on an as-needed basis and laser-focused on specific issues and outcomes. This enables companies to bring in-depth financial knowledge, services, and technical expertise to their organization on an outsourced, part-time, retainer or contract basis, without the in-house salary, benefits, and other costs associated with a full-time CFO.
What can you expect with the help of a Fractional CFO?
A laser-focused approach to a company’s financial health requires deep-seated experience and knowledge. My Financial Intelligence Framework program is based on 35 years of experience in senior financial positions, including building and running my own $20 million company and working with many privately-held, small to mid-size businesses. The framework provides business owners with the knowledge, data, and tools to meet the unique needs of the business to keep it moving forward. Here are some of the things I focus on with business owners.
- To sustain and grow your company, you’ve got to know your numbers. I think of it as having the Financial Intelligence to understand and interpret your own financial score card. To do this, we identify the financial statements you should be looking at, and ensure they are timely and accurate. These include not only the Income Statement, but also a detailed Balance Sheet, and most critical – a Statement of Cash Flow.
- Tracking and assessing the right data will enable you to truly understand your cash flow and reveal where you need to start to improve cash flow management and profitability. Your business may be growing, yet there never seems to be enough cash. You’ll learn proven methods that can help you obtain positive results in the areas of cash flow and profit, first by learning to calculate your Cash Conversion Cycle and then using it to monitor changes as you implement strategies to improve.
- Working Capital is the financial resource that enables you to fund your operations, especially during times of growth. You’ll learn to accurately calculate your required working capital, which will provide the basis for deciding whether and how much to borrow for growth or whether to temper your growth to the limits of your existing working capital.
- Business owners work hard to grow their companies. But with increasing demands and the lack of a solid financial strategy, it’s tough to avoid hitting a growth wall. Together we’ll look at your financial and operational infrastructure and develop the growth strategy and solutions that will enable you to break through that wall.
- You’ll have a financial dashboard that will help you keep a pulse on your business, knowing what to look at and how to recognize when adjustments are needed.
What should you look for when hiring a Fractional CFO?
- Someone who has substantial experience working with your size company.
- A clearly defined process for getting your financials on track.
- A high-level understanding of business systems and their implementation, such as EOS.
- A good fit with your company culture, which will set the stage for a more holistic understanding and approach to your business needs.
As a CFO with a CEO perspective, I understand what business owners face every day and how all aspects of your business are connected. I’d welcome the opportunity to work with you to help you develop the Financial Intelligence Framework you need to confidently move your company forward. Contact me for a complimentary discussion of your specific situation.