What Should You Look for in a Fractional CFO?
So you’ve decided you need to hire a fractional CFO - great! Your SME or startup will thank you for it. But how do you know who to hire or where to start?
The cost of hiring a full-time Chief Financial Officer (CFO) can be prohibitive. This is where the concept of a fractional CFO comes into play. A fractional CFO offers the same expertise and services as a full-time CFO but on a part-time or project basis, making it a cost-effective solution for businesses that don't require or can't afford a full-time executive.
But what exactly should you look for when considering a fractional CFO for your business? Let’s find out.
Hiring a fractional CFO requires more than someone who meets the job description. Read our checklist to make sure you’re hiring the perfect fit.
Hiring a fractional CFO - a checklist:
At The Finance People, we’re experts in finding standout CFOs for SMEs like yours. Here are the first things we look for when hiring a fractional CFO:
Great communication
The complexity of financial data presents a significant challenge - whether you’re a company big or small. Often this creates a need for a fractional CFO who can simplify this information into comprehensible, actionable insights for all members of the leadership team.
Your fractional CFO should excel in articulating financial concepts and strategies to any audience, including those without a financial background. This skill ensures that the entire team, regardless of their expertise, remains informed and aligned regarding the company's financial status and goals. Effective communication by the fractional CFO fosters a cohesive understanding of financial matters across the company.
Once you’re positive they’ve got great communication, what’s next?
The ability to scale
A key advantage of hiring a fractional CFO lies in the adaptable nature of their services, which is particularly beneficial for SMEs and startups. When considering candidates, it's vital to assess their readiness to adjust to the evolving requirements of your organisation, with the capability to expand or reduce their involvement in line with requirements.
Do they have capacity to increase their time working for you? Do they have a minimum amount of contracted days if you are ready to scale down?
This adaptability is especially critical for startups and scaling businesses, which often face variable demands and rapid changes in their market.
A fractional CFO who can seamlessly scale their services not only provides financial expertise when most needed but also contributes to the overall agility and resilience of the business, enabling it to navigate growth phases and challenges more effectively.
A strong portfolio
When selecting a fractional CFO, it's essential to focus on candidates with a documented history of success, highlighted through portfolios and positive references. These should detail the candidate's ability to navigate complex financial challenges, their strategic approach to problem-solving, and their direct contribution to business growth and financial stability.
Portfolios should showcase the candidate's expertise in areas such as cash flow management, capital optimisation, and growth strategy implementation, while references can provide insights into their ability to collaborate effectively, communicate across teams, and lead with integrity.
Together, these elements will help ensure that the chosen fractional CFO is not only adept at financial management but also a strategic partner in your business's ongoing success.
Additional note: The portfolio does not need to be industry-specific. A great CFO will be able to apply their skillset and expertise to any business, regardless of industry.
Aligned strategic vision
This can be a challenging one to judge when you first meet your new CFO.
A top-tier fractional CFO should bring more to the table than just accounting prowess. They should be a strategic partner capable of contributing significantly to your company's strategic planning processes.
This entails not only aligning financial strategies with the overarching goals of the business but also possessing a keen insight into market dynamics, an ability to anticipate financial outcomes, and the foresight to recommend viable strategies for growth and operational efficiency.
The ideal candidate would bring a blend of financial acumen and strategic vision, enabling them to navigate market fluctuations, identify opportunities for advancement, and implement financial practices that support sustainable growth and enhance overall business performance. This strategic contribution is essential for businesses aiming to not only maintain their financial health but also achieve long-term success in an ever-evolving market landscape.
Cultural Fit
Finally, would you invite them to your family BBQ? Would they pass the ‘BBQ test?’
The significance of finding ‘the right fit’ cannot be overstated. This alignment goes beyond skillset compatibility; it encompasses shared values, work ethics, and visions. A fractional CFO who resonates with your company's culture and ethos is more likely to foster a collaborative environment, build strong relationships within the team, and drive initiatives that are in harmony with the company's core values and mission.
Such integration enhances the CFO's ability to implement financial strategies that not only reflect the organisation's objectives but also reinforce its identity and principles. In essence, a culturally aligned fractional CFO acts as a catalyst for unity and progress, ensuring that financial decisions and actions bolster the company's overarching goals while nurturing a supportive and cohesive workplace.
And further, if you can get on with them on a personal level, you’re far more likely to see a thriving collaboration take place.
Hire a fractional CFO with The Finance People
Hiring a fractional CFO can be a game-changer for SMEs looking to leverage expert financial guidance without the overhead of a full-time executive. By focusing on these key attributes—industry experience, strategic vision, communication skills, technological proficiency, flexibility, proven success, and cultural fit—you can find a fractional CFO who not only meets your financial management needs but also contributes significantly to your company's growth and success.
But where do you start? How do you find your fractional CFO quickly and know that they are the right fit for your business and needs?
At The Finance People, we help SMEs gain fast access to fractional CFOs at an affordable cost. With our thorough screening process and years of experience in the field, we’re confident we’re able to provide you with an expert fractional CFO to take your business to new heights. Contact us today for your initial consultation.
