Growing businesses benefit from the experience of a CFO, chief financial officer to keep everything moving successfully. The only problem is that an experienced CFO is a rather expensive investment and many companies might not be in a steady financial position to hire someone for that position. While there are plenty of benefits that come from a CFO, companies might be missing out on these benefits or on successfully running the finances of their business because of the cost of hiring someone. Luckily, there is an alternative option for businesses to gain knowledge and experience for their businesses without having to spend the typical amount that they would for a full-time employee.
A fractional CFO is someone who is hired by a business on a contractual basis to provide their knowledge, experience, and plans without being hired as a full-time employee. Although they are committed to multiple businesses at times and are not full-time employees for any of them, they are still qualified and full of knowledge to bring your business to the next level financially. Not only would they provide you with accurate insights into how your business is currently running, but they can quickly and efficiently take a look at where your business lacks. After doing so, they even help you develop a plan to execute a better process that will maximize your growth.
A fractional CFO works like any other contractual employee would and would provide you with valuable and quality work just an employee would, but there are certain differences too. For example, a fractional CFO wouldn’t work for you full-time. In fact, you can decide upfront what your expectations are as far as how many hours they will work for you and what the pay will be. Some fractional CFOs are hired for particular projects and their contract ends when the project ends. Others might be hired to stay on permanently but only work a set number of hours per week. Whatever you decide is up to you and that flexibility is what makes this agreement perfect for any business.
When you finally make that leap and decide to hire a fractional CFO, you want to make sure that they are knowledgeable about your business. For them to be successful in providing you with a valuable plan that will work, they need to know what your business is about. Another thing to consider is whether they have good communication skills or not. Since you are hiring them to provide insights to your entire finance team, you want to make sure they can do that effectively, which is why communication skills are important. You also want to make sure your fractional CFO has the experience you are looking for so that they can help you reach your financial goals.
Whether a fractional CFO is a right choice for you is going to be based on a number of factors. You want to analyze how your business is performing now and determine whether you could make some growth if you know how to better handle your finances. Most of the time, a fractional CFO will always help you grow but they are best for companies under development and with complex financial needs. If you are hesitant, you can always hire one for a short term to see if it is the best fit for your company.
Hiring a fractional CFO is a decision that many businesses make and never go back to a traditional employee. The growth and cost savings that they see are substantial and motivate them to continue working with the fractional CFO. As your company grows, your needs change and if you don’t have any financial guidance right now, it might be time to consider a fractional CFO.