When is it Time for a Small Business CFO?

When you’re running a small business, CFO services probably seem out of reach. Most business owners assume that being overwhelmed by finances is just the price of managing a business.

Nothing could be further from the truth. You can improve your financial position for your small business with a CFO that fits your budget. Virtual and fractional CFO services for a small businesses put sound financial management in your hands.

What Does a CFO Do in a Small Business?

CFO responsibilities in a small business are diverse. Generally speaking, the CFO oversees all financial aspects of your business. This doesn’t mean that your CFO handles accounting and tax preparation personally, but they do manage relationships with the people responsible for those things.

A small business CFO will be responsible for the financial vision of your business. They will handle budget planning and forecasting, develop strategies for growth, and ensure accurate financial records are maintained.

When is the Right Time to Bring on a CFO for Small Business?

There is never not a good time to hire a CFO. Your business will always need financial planning skills and budgetary management.

Business owners often try to handle these tasks on their own. However, without formal training, they simply can’t come close to the insights that a professional CFO can offer.

Many businesses can make it for a while without formal CFO services. But for any growing business, there will always come a point when you finally realize you’re in over your head. Here are some common telltale signs that it’s time to look for a small business CFO.

Your Money Management System is Convoluted

Maybe you’re using a spreadsheet to keep a running tally of your income and expenses. Sure, it worked when you first started. But with additional clients and throughput, things quickly got out of hand. Or maybe you just rely on your bank account balance to do the math for you.

In either case, having to review your financial records is a nightmare. Your organizational style (or lack thereof) means that you’re unable to itemize for tax write-offs or write detailed financial statements for loan officers.

While a CFO isn’t an accountant, they can help set you up with a bookkeeping solution. Your small business CFO can also manage your relationships with your accountants.

Your Revenues are Starting to Slide

Your business had a good initial launch, but after a little while in the market, your revenues are starting to slump. This is often when business owners panic and start frantically spending money. Don’t make that mistake.

A CFO can help with flagging sales by developing a comprehensive strategy for your business. Whether it’s an advertising campaign or a shift to a subscription model, your CFO will come up with strategies proven to boost your sales.

You Need to Build a Finance Team

So you have admitted to yourself that you need financial help. But who do you hire? You’re not an accounting firm, why would you be able to vet an accountant?

With technical financial know-how, your small business CFO can build your finance team. They will be able to tell who can be trusted to manage your accounting and day-to-day financial operations.

You Don’t Understand What Your Accountants are Saying

Sometimes accountants live in their own world. They mean well, but when it comes to explaining what they’re doing, it’s all jargon and numbers.

A CFO can translate the technical speak of your accountants into a language you can easily understand. Further, they will be able to use insights from your accountants to create financial plans.

You’re Ready to Expand

Your business has hit a plateau, and now it’s time for another funding round. Or maybe it’s time for the first funding round. In either case, your small business CFO will help you get the financing you need on the most favorable terms.

A CFO is experienced with writing business plans for funders. They can plumb the depths of your financial records to generate projections for future growth and a plan of action to get there. Funders love to see that you know your finances and have concrete plans for their money.

Fractional CFO for Small Businesses

CFO service for a small business is not out of reach with a fractional CFO. A fractional CFO provides CFO services for numerous clients at a fraction of the cost.

Unlike a full-time CFO, a fractional CFO has to be very quick on the uptake. They deal with many industries, and have to be ready for anything. They’re used to tight budgets and tight deadlines.

Because a fractional CFO is not a part of your organization, you won’t have to worry about office politics interfering with sound financial advice. Your fractional CFO will tell it like it is, even if the necessary course of action is unpleasant.

Michigan CFO Associates has been providing small and medium sized businesses with CFO and controller services for over 15 years. Contact us today for more information about getting your financial future in order.