Every company needs expert financial strategy and direction, but many lack such leadership. More companies are now turning to part-time CFOs to solve their most pressing problems and seize their biggest opportunities.
Often, there is simply not a business need to warrant a CFO spending 40 or more hours a week working. A part-time CFO gives you the flexibility and specific expertise that your business needs at a fraction of the cost of a full-time hire. You can expect a part-time CFO to provide value by increasing revenue, profitability and efficiency in three primary ways.
1. Financing Growth
Debt. Private equity. Venture capital.
Companies fund growth in multiple ways and each method has unique benefits and potential drawbacks. Like a Sherpa helps you climb a mountain, a part-time CFO sets you on the path to growth by helping you choose and secure the financing that is right for your business.
A CFO provides the information that lenders and investors want, from reconciled financials to growth plans and pro forma financial models—and they prepare the pitch decks for presentations. They raise funds by showing where the business has been, where it is currently and where it is going. Ultimately, a great CFO maximizes your valuation, minimizes your borrowing costs and raises the maximum amount of capital.
Additional examples of financing support that you could expect from a part-time CFO include:
- Planning the timing and level of funding needed to support business operations
- Supporting investor due diligence
- Ensuring the ability to invest in new projects by managing capital runway and debt obligations
2. Finding Gaps
Unlike a full-time hire, a part-time CFO gives you an unbiased assessment of your people, processes and technology. You can build a more efficient and valuable company by leveraging your strengths and overcoming your weaknesses.
A CFO creates detailed workstreams for you based on the results of their gap analysis. They project the ROI of each possible improvement and help prioritize accordingly.
Examples of assessments a CFO may make include:
- Identifying risks and opportunities for current-state finance and accounting systems
- Improving margins through granular analysis of channels, service lines or products
- Analyzing competitive threats
A part-time CFO helped Kinley Corporation cut costs in half and position itself for growth by thoroughly reviewing the general contractor’s processes and making improvements. Following the CFO’s lead, the company streamlined its month-end processes, completed its financial statements efficiently and accurately, and gained insight into its business. Much of the improvement came from maximizing existing talent and technologies, which started with assessing the company’s potential.
3. Moving Forward
A CFO sees your business through a strategic lens. They are expert decision-makers and experienced planners who prepare your business for the future.
A perfect-fit CFO champions the strategy best suited for your business’s specific needs; where the best approach for some organizations is cutting costs, for others, prioritizing growth or optimizing for bottom-line performance is most instrumental. Whichever approach is taken, the outcome is the same when your part-time CFO’s expertise matches your need: Your business becomes more profitable.
A struggling reseller of computer products and provider of technology consulting services, EST Group, leveraged a part-time CFO to turn around and grow in value. What began as a road-mapping exercise eventually led the company to revise its annual budget and develop informative reporting and KPI dashboards. EST Group ultimately spun off its consulting business in a successful sale, leaving it with a stronger business built around reselling computer products.
The most successful part-time CFOs thrive in today’s freelance economy because they create healthier companies and give those companies a strategic edge at a lower cost. Their efforts include:
- Market research that aligns target markets with strategic advantages and priorities
- Go-to-market plans that factor in marketing and sales strategy, budgeting and financial forecasts
- Managing risk through proactive strategies
A part-time CFO brings unique value to your business by providing the outside expertise you need most. Consider the three primary ways in which a part-time CFO will assist your business, then find the CFO that suits your needs best.