Adding a CFO to your business can super charge it, provide a road map for business growth and prosperity. Business owners are wary of hiring a CFO because they see it as a C- Suite executive that comes with a C Suite salary. The reality is very different, you get financial expertise and strategic advice as often as you need to and aren’t laboured with a full-time salary impacting your bottom line. The right CFO will end up earning your business money so invest wisely & here are 5 signs your business needs a CFO.
- Your always thinking of growing your business but are unsure if you can afford it
Business owners are intuitive and know their business model better than anyone yet sometimes the “fly blind” on where their numbers are. They know they made a profit last month, but can they deal with the impact of investing in a larger warehouse or launching a new product line.
Virtual CFO’s provide strategic direction for what may come, they layout the costs and impact on your revenue. They give you a road map by forecasting your ability to repay all new commitments every step of the way. In return you get better sleep at night.
- Your puzzled by what point you break even and when does real profit kick in
A good CFO breaks down the core financial metrics of your business in an easy and relatable way. They give you a fresh insight into the way you run your business and suggest alternatives for taking your business in a different direction.
Whether you take that advice or not is up to you but whatever your choice you know what the financial consequences will be with no “nasty surprises”.
- Your thinking of selling but not sure how much your business is worth
It’s a big decision to sell your business but what is the “right price” for it. A lot of it is how transparent your financial numbers are. Are all your liabilities known and detailed as this is what a prospective client is after. If these accounts are not reconciled, you run the risk of not knowing your business and can lose the confidence of a potential buyer.
A good CFO will make sure you understand your balance sheet, the numbers are clear and checked each month.
The worst thing you can do is to start negotiating with a prospective client only to have them back off if you are not across all the details of your accounts.
- You lose track of all your expenses and never know if they are approved
Expense management is a critical part of any business. A CFO will critique your spending, in a good way. They will also make recommendations.
A CFO is there to “cut the fat but not the meat “of your expenses.
CFO’s foster positive relationships with key suppliers. They talk and negotiate with them, get better pricing & larger discounts in return for future commitments. This can make a real difference to your budget by reviewing your expense lines to make sure your business really needs them. The whole process can add lots of profit back into your business.
- You want someone who is “accountable & “always has your back “
A good CFO focuses on solutions rather than problems. They don’t blame others but create systems to improve processes. They give you the confidence that business wheels continue to turn even if you are not there. More importantly they allow you to spend less time “In the business “and more time “On the Business”, looking at growth and new markets.
Chris Kondou is a member of the Virtual CFO Association.
The Virtual CFO Association is an elite peer network, advocating and promoting the emerging VCFO sector within the accounting profession. Collectively the association currently has over 600 years of industry experience, with highly qualified and experienced specialists spread across more than 30 industry verticals. If you would like any more information regarding the Association of VCFO’s, please visit our website www.vcfoassociation.com.au