Hopefully, by now as a small business owner, you’ve gotten good at keeping up with your revenue and expenses. You may even be comfortable with the basic reports that help you measure how well your business is doing.
But do you have a good strategy for how your money should be spent?
That’s what a good CFO can do for you. “But I’m a small business,” you say. “I can’t afford to hire someone like that!”
Good news! Even if you’re not a big business, you can still benefit from the same financial expertise a CFO can bring to a Fortune 500 company…at a fraction of the cost. In this post, we’ll show you how a CFO Consultant can help take your business to a whole new level.
What is a CFO Consultant?
According to the CFO Project, a CFO Consultant is someone who moves from “being a recorder of the past to helping business owners have a better future.”
Having accurate numbers is important to small business owners. However, what’s valuable is knowing what to do with all of that information.
CFO Consultants are an on-demand part of your financial team that takes the data collected by your bookkeepers and accountants and uses it to help you make better decisions and grow your company.
According to CFO Hub, a good Consulting CFO:
- Develops and maintains a budget for your business
- Works with investors to help raise capital
- Analyzes your data to create financial forecasts
- Ensures that your entire financial department stays in order
Their expert financial leadership puts them more into the category of “business advisor” than “just another accountant.”
Small Business Financial Management: Why You Need Expert Guidance
Running a small business is challenging, especially when it comes to managing your finances. There are cash flow issues to deal with, budgeting constraints to live under, and financial forecasting to do.
Have you ever:
- struggled to pay bills on time?
- “robbed Peter to pay Paul” in your budget?
- run out of money before the end of the month?
- passed on growth opportunities because the funds weren’t there?
A CFO consultant can help you manage your finances more efficiently so that you are free to focus on spending your time and energy where it has the most impact…growing your business. They can provide you with expert advice and oversight without the costly overhead of a full-time in-house CFO.
Service Business CFO: Specialized Financial Leadership
Many of our clients run service-based businesses. The good news is that a CFO consultant can be a big help for them too!
Service businesses face many challenges. While they may not have physical inventory to deal with, they still have to stay on top of cash flow, plan for taxes, find funding, buy insurance, and provide employees with benefits and retirement packages. A CFO consultant can take all of those things off your plate.
For example, product-based businesses can deal with things like trimming operation expenses by purchasing faster machines or building bigger warehouses. That’s not an option for a pure service company. A good CFO knows how to find other ways to lower their costs and improve their profit margin.
(For further reading on the unique needs of service businesses, check out this article from Harvard Business Review: “Strategy is Different in Service Businesses.”)
Financial Strategy for Small Businesses: Building a Roadmap to Success
To build a successful business that will stand the test of time, you need a clear financial strategy for growth and sustainability. CFO consultants specialize in helping small businesses in creating long-term strategies such as goal setting, risk analysis, and capital allocation.
In an earlier post, we wrote about 5 ways CFO consulting services can help grow your business. Click the link to go into more detail, but here they are in a nutshell:
- They’re available when you need them.
- You only pay for them when they’re working.
- They can give you an outside perspective.
- They bring lots of industry knowledge.
- They give you access to a larger financial team.
Forbes has a great article “20 Strategies For Sustained Financial Growth And Success.” The whole list is worth a read, but a few of their points directly apply to ways a CFO consultant can help:
- “Raise revenue and lower costs.” While this strategy seems obvious, where they can really help is in making sure your finances stay on a steady upward climb instead of a wild roller coaster.
- “Make small changes based on strategic analysis results.” A CFO consultant can make sure you don’t overreact to data. Instead, they can guide you through gradual adjustments that lead to big results.
- “Focus on all the things that create the big picture.” Often, as a small business owner, you’re too close to the day-to-day action to see all the moving parts clearly. As an outside observer, a CFO consultant is in a great position to see your business from a different perspective and give the advice you need.
- “Focus on monthly cash flow.” As Forbes points out, “What gets tracked also improves.” While you focus on your business operations, a CFO consultant can focus on your finances to ensure that you always have plenty of cash on hand to work with.
- “Make time for strategic planning, operational efficiency, and adaptability.” Quoting Forbes again, “Operational excellence, flexibility, and foresight lead to sustained financial performance.” Your CFO consultant’s job is to look down the road to make sure your company is ready to make the journey to the success you desire.
CFO Consulting Services: What You Can Expect
CFO consultants provide a wide range of services designed to manage the financial risks of the company they’re hired to serve. They may vary based on the business’s size and needs, ensuring scalability as it grows.
Our firm, for example, offers CFO consulting services to our clients as a way to help provide peace of mind for their:
- Cash-flow management
- Bank financing
- Strategic business planning
- Succession planning
- New business formation
- Internal controls
CFO Consulting: A Cost-Effective Solution for Small Businesses
Hiring a full-time CFO can be expensive. The average CFO salary is around $100,000 (not to mention the cost of benefits).
For a fraction of the cost, you can partner with a part-time, on-demand CFO consultant instead. By doing so, you save tens of thousands of dollars while enjoying much more flexibility and scalability. It’s a great cost-effective solution, especially for small businesses in a growth phase or start-ups operating on a shoestring budget.
Looking for more reasons to consider a part-time CFO consultant? Read more in this post we did on “5 Signs That Your Business Could Benefit From Fractional CFO Services.”
Why Your Small Business Needs a CFO Consultant
Save money, save time, and avoid unnecessary stress by hiring a part-time CFO consultant to help you keep your finances in order. When they deliver expert financial management, strategy development, operational efficiency, and compliance you’ll wonder why you didn’t do it sooner.To get started on your long-term growth and financial stability, schedule a call with one of our team today!
