When do I know that I need a CFO? asked a client CEO. Tt's not that difficult I said. Here are a few words and if you feel any or few of these words are your inner voice, then writing is on wall :
1. My business has great potential and is growing, but at times am not 100% confident about my business decisions, not knowing the financial impact of these decisions
2. There’s always a confusion on which direction of growth should I take? And what would be the financial outcomes?
3. I never get to see my financial dashboard ON TIME or in a manner that tells me which Product, Service, Geography or Department is making how much money.
4. I'm never able to plan my Cash Flow Cycle in ways that gives me peace of mind
5. I miss most business opportunities since am unable to raise funds at the right time
6. Growth is fine but it always comes at the cost of increase in working capital and finally my profit takes a hit
7. My Accounts & Finance team always struggle to do financial closure in time
8. I have a good team and they are close to me, now how do I put them into Performance matrix? People Performance at the top always remains a challenge.
Now you will say that these are the concerns of every Entrepreneur. Yes, you are right. So here comes another set of questions – whether your business can afford one? At what size of business one should get the CFO ?
When it’s a question of affordability that’s where Shared CFO firms helps you to deliver value at a lesser cost since most Small & Medium size business won't be at a stage where you need a full time CFO. You need a CFO for few hours or days a month to help you with key critical business decisions and manage your financial risks. Shared CFO brings this value at a significantly lesser cost. Regarding Size – there’s no fix definition at what size a CFO is justified, as they say – earlier the better and hiring the first CFO will always be an Investment decision for any Entrepreneur.
The only flip side is once you hire and realize the benefit of the CFO you are most likely to curse yourself for taking this decision so late. Jokes apart, if business growth with financial fitness is your priority, don’t blink.