Is it time for the next step in your business? Is CFO consulting the way to grow your business?
If there is a goal that almost all companies share, it’s growth. It’s to gain the ability to serve a wider range of clients, have a bigger impact, and increase revenue.
However, as many business owners can tell you, achieving growth isn’t typically the smoothest process. It’s usually a bumpy ride that requires frequent changes and adjustments within the company. Processes must be updated, new personnel hired, and staff must receive additional training.
And there is one area in particular that requires a great deal of attention: accounting and finance. It’s easy for old accounting methods to become obsolete and for financial records to get out of control when a company experiences growth. It’s also possible for a company’s financial practices to actually end up limiting growth if not scaled appropriately.
In order for a growing company to stay ahead of their finances and seek continued growth, it’s necessary to have the right Chief Financial Officer (CFO).
What Is a CFO?
The CFO’s job is to oversee and direct accounting and finances.
This includes:
- managing cash flow
- budgets and taxes
- all financial planning
Essentially, the CFO is a strategist with financial expertise who keeps your business running smoothly and reports directly to the CEO.
What Does a CFO Do?
Regular Reports
Part of a CFO’s role is to provide regular financial reports to the CEO. These reports show how the CFO is balancing debt, operational expenses and revenue to meet financial goals. The reports are indispensable for their ability to clearly outline progress.
A CEO must know whether goals are being met before they can make the necessary changes to meet them. The CFO will be able to illustrate why goals aren’t being met and offer guidance on the best ways to meet them.
Efficient Processes
In order to increase revenue and maximize resources, CFOs take a comprehensive look at your company’s operations to ensure that they are as efficient as possible.
By closely watching key performance indicators (KPIs), managing budgets and minimizing taxes, the CFO is able to streamline processes and help your company maintain financial growth.
Long-term Planning
Another essential function performed by CFOs is long-term financial planning.
A CFO will set up a strategy for ensuring your business continues to perform well into the future. This means considering a range of possible future events and offering recommendations for improving the outcomes.
Don’t get caught unprepared. This kind of foresight can be life-saving as your company and the marketplace continue to evolve.
What is CFO Consulting?
Instead of hiring an in-house CFO, many businesses choose to seek CFO consulting services.
CFO consulting can help with everything from financial planning to risk management. It bolsters your financial understanding and offers insights to help your company progress. It can be a great alternative to bringing on a CFO for many reasons.
Why Should I Outsource a CFO?
Business leaders of successful and growing companies are often very highly capable people. They’re the kind of people who enjoy managing almost all aspects of their business and are quite good at it. They might have even built the company from the ground up with a hands-on approach. They’re quick to learn new skills to drive their business to succeed and are driven by passion and hard work.
These traits are extremely valuable, but they’ll only take you so far. At some point, having a detailed financial plan laid out by an expert who can advise you along the way is what will encourage and sustain business growth.
Hiring an in-house CFO is an option, but can be costly and may not be the most efficient option. This is where CFO consulting comes in.
Lighten the Workload
The CEO of a growing business has a lot to deal with and keep track of.
One of the main benefits of CFO consulting is that it lightens the workload for the CEO. With a dedicated professional handling the sometimes tedious financial aspects of a growing business, the CEO can spend more time and energy on other important business elements.
While the CFO is creating budgets, managing banking and dealing with investors, the CEO can devote more time to where they thrive most.
Reduce Costs, Build Profit
It can be expensive to run a business. Business owners know that when a business grows, so does the cost of running it. These costs include everything from supplies, salaries, real estate, taxes, and manufacturing. The benefits that CFO consulting services can provide your business make it an enormously worthwhile investment. Your CFO will be able to think all of this through for your company.
Obtaining financial expertise and guidance for your business without having to hire an in-house CFO is a big money-saving opportunity.
Better Decisions
A key advantage of having a CFO as part of your business is the peace of mind that comes from knowing they are making the best financial decisions for you. A CFO is someone who is very well-informed and skilled at maneuvering the stock market, banking, accounting, and business analytics.
Letting a dedicated expert handle these aspects of your business is one of the best things you can do for yourself and your company. This doesn’t mean you have to let go of the wheel entirely. A great outsourced CFO will act as a trusted advisor in keeping you updated and suggesting the best moves to make.
The Big Picture
The right CFO will take a big-picture approach to working with your business. To best serve your company and your financial goals, it’s important for the CFO to cultivate a broad understanding of the business.
What are your company’s short-term and long-term goals?
A good CFO will have a genuine interest and knowledge in the workings of your business in order to create finely-tuned plans for the future.
Trust and Respect
Having a CFO as part of your business can encourage trust and respect and create better relationships. Whether in a full-time or part-time capacity, CFO services elevate a company’s image as a reliable and serious organization.
Is CFO Consulting Right for Your Business?
Frankly, the answer to this question is usually yes. It’s not hard to see how reducing costs and building profits is something your business will benefit from.
However, there are some characteristics of companies that will especially benefit from an outsourced CFO. Read on to find out.
Rapid Growth
Companies that are beginning to experience rapid growth or have already entered this stage should certainly have CFO services. There are many changes a growing company needs to undergo.
For example, it’s necessary to expand automated systems to handle growth and to provide additional funds or financing to finance the growth. CFO consulting can improve a business’ scalability, organize financial records and keep the company operating as efficiently as possible. And in terms of growing quickly, your company needs to pay the utmost attention to the art of organization during this time.
As a business grows, it also faces new risks. The business owners, shareholders, banks, and employees all have a vested interest in how the company fares in the face of these risks. CFO consultants can keep those with money at stake informed by communicating important information in a timely fashion.
Difficulty Making Decisions
If your company has trouble making financial decisions in a timely manner and being confident that they are the best possible decisions, you probably need expert help. Effective business owners need to be able to make decisions at the pace of business. This requires the preparation, organization, and interpretation of important information.
By involving an outsourced CFO, you are including a qualified member in your team who adds authority to the decision making process as well as streamlines it.
Old Strategies
CFOs are primarily strategists. If your company’s financial strategy hasn’t grown with the company or simply hasn’t improved over time, bringing in a specialist can offer huge rewards.
Preparing for a Merger or Acquisition
Mergers and acquisitions are seldom straightforward. There are a lot of moving pieces, and taking the right steps to ensure success is crucial. A consulting firm can be a key player in either of these maneuvers.
In both cases, having experts to prepare and interpret financial reports is essential in speeding up the process and making sound decisions. The input from a trusted consulting service will help your company define the best terms for any deal.
Personal CFO
There’s another option for business owners or successful professionals looking to simplify and improve their financial lives. Whether you’re nearing retirement, embarking on a new business venture, or simply want a better grasp on your finances, a personal CFO might be the resource you’re looking for.
Why a Personal CFO?
The purpose of a Personal CFO is to allow you to focus your time and energy on what matters most to you. And for most people, that isn’t the ins and outs of their financial lives. You may already have an attorney, CPA, wealth manager, and insurance specialist. It’s easy for things to become confused with this many people and all the moving parts they represent.
Do these people communicate with each other to make sure their recommendations are perfectly suited to your situation? Likely not.
This is where bringing in a personal CFO is beneficial. A personal CFO satisfies the role of organizer and coordinator while bringing financial expertise to the table. They take a big-picture approach to optimizing your financial strategy.
Characteristics of a Great Personal CFO
A Personalized Approach
A great personal CFO looks at more than just your finances while performing the role of financial advisor. In order to best serve your specific needs and goals, they will engage in an in-depth and personalized discovery process. This involves asking a range of questions aimed at getting beyond your finances so they can learn more about you.
What are your values, aspirations, pain points, interests, and long-term goals?
This discovery process is valuable for your personal CFO, but also for you. As a result of the process, both of you will come to a clearer picture of your current situation and what separates it from where you’d like to be. It takes a detailed understanding of the path needed to reach your goals to develop the right strategy to get you there.
The most effective personal CFOs understand the value of a strong relationship and work hard to develop and maintain that relationship.
A Defined Process
The most qualified personal CFOs understand the value of implementing a defined process. This is the best way to address your full range of needs, which almost certainly expands beyond the realm of just investment advice or tax mitigation.
As an entrepreneur, your financial life can get complicated. Your needs could include planning a business exit, making charitable donations, dealing with lawsuits, or estate planning. The expert guidance a personal CFO can offer in all of these circumstances is invaluable in helping you make the right decisions to meet the changing demands of your business and family life.
Part of a Team
The complexity of your financial needs demands a range of specialized expertise. This is often more than a single financial advisor can provide. By engaging a personal CFO who works with a team of experts, you can be sure that the diverse aspects of your financial life are being treated with care.
Get the Support You Need
Finances are a part of life, and how they are managed can make all the difference. From helping your business make the necessary changes that come with growth to experiencing great changes in your personal life, the right expertise can make everything so much easier.
Be sure to consider CFO consulting for your business, as well as the benefits of having a personal CFO. The extra energy you can spend on non-financial pursuits will make your life more enjoyable and the peace of mind from knowing you are making the best decisions is invaluable.
At Saddock Advisory, we don’t have clients, we have partners in success. Schedule a meeting with us here to see how we can help your business grow.
