5 Tell-Tale Signs You Need a Fractional CFO
As each new year begins, many of us make a head-start and review our business objectives for the upcoming year. With previous setbacks, such as Covid-19, Brexit, the changing consumer journey, digitisation and more – many have held back from investing in business or even thinking about growth.
And for many smaller businesses, hiring an expert CFO can seem out of reach. Many view CFOs as being out of budget, particularly if they have the level of experience desired. However, the fractional CFO model is alive and thriving an enables smaller businesses the opportunity to leverage years of expertise for their smaller business, for a fraction of the budget.
In this article, we’ll explore the benefits of hiring a fractional CFO, as well as the five key signs you’re ready to take that next step to help your business growth.
The Benefits of Hiring a Fractional CFO
As a business owner, hiring a fractional CFO doesn’t just save you time and money – there are endless benefits to having this type of expert on board and helping drive your business forward. Here are some key benefits to consider:
They’ll provide an experience-led strategy to help you take future growth steps
They can provide corporate governance
They can assist with relationship management (auditors, funders, HMRC)
They can assess overheads and costs associated with your business, signing off relevant investment
They can become an integral part of your board of directors
With the turn of the New Year, many business leaders are feeling more positive about the future of their business and are seeing light at the end of this very long tunnel. This leads many to ask the question – are we ready to take the next step and hire a fractional CFO?
Should You Hire a Part-Time FD?
If you’re unsure whether it’s the right time to invest in a fractional CFO, here are some key signs your business is calling for you to take that next step.
You have outlined your business objectives and know you need guidance
The first, most obvious tell-tale sign is that your business objectives are demanding the expertise of an FD. An FD’s role within your organisation is to work with senior executives to explore the financial health of the company and make data-driven decisions to help meet wider business objectives. To leverage the skills of a CFO, you need to have established targets that your business is attempting to reach – and they shouldn’t be easy or modest.
You have a budget and investment, but you’re not 100% sure where it is best placed
A second key sign is having a budget at your fingertips. You have the budget to hire a fractional or interim CFO, as well as the budget to invest in new areas for your business – and you need the guidance of an expert to help make those important decisions.
Even if you don’t have the budget to invest elsewhere, hiring a CFO can help you make the right business decisions to better manage your cash flow, raise funds and grow your organisation.
Your business is driving enough demand, and profits are growing
Another sign you’re ready to hire a fractional CFO is that your business is in its ‘growth phase’ and profits are climbing. This is suggestive that your business is ready to scale, and a significant part of this process is hiring the right financial guidance to take your business in the right direction.
Do you want to improve cash flow management – or simply want to focus your own time elsewhere?
Cash flow management becomes more and more complex as your business grows – and it is therefore critical that you have a CFO in place to manage this properly for you. Further, cash flow management is tiresome and can be a lot of responsibility for a business owner, whose time could be better spent elsewhere. If cash flow is becoming a problem or is not a high priority, then it’s always best to invest in an expert who can manage it effectively.
Data management is becoming too complicated
Data is at the heart of a business and is key in making business decisions for years to come. Therefore, having an expert who can properly manage and analyse business data is of extremely high importance.
If data management is becoming too difficult/complicated, or it is starting to fall by the wayside as your business grows, then this is a strong sign you need a fractional CFO to take care of reports and drive your business forward.
Get support from The Finance People
If you think it’s time to hire a fractional CFO, don’t hold back. The sooner you plunge your business into the next step, the sooner you can begin accurately managing data, adjusting cash flow and driving your business forward.
At The Finance People, we align businesses with the right finance professionals to suit their needs. Get in touch today to get started.