Do you ever feel like there’s a lot on your plate?
That’s how it feels like to own a business. Business owners wear a lot of hats. You handle sales, marketing, advertising, HR, accounting services, finances, and so much more. But what if you could offload some of those specific financial challenges onto someone else without breaking the bank?
Fractional CFO is a little-known role with many misconceptions. For example, many people think that a fractional CFO as a chief financial officer who steps in to take over financial reporting and operations of a company during times of trouble. While this is certainly one of their key roles, there are many other facets to this important position. Other than getting your finances under control, they can help elevate your business as a whole. A fractional CFO’s job is complex is more complex than it seems.
A fractional CFO is expected to play four diverse and challenging roles to help mission-driven companies stay afloat, achieve growth, and remain financially healthy. Some work as an interim CFO, and some work for longer time with a company. It’s crucial for female founders like yourself to understand these roles to find the right person and take your business to the next level.
Here are the four main roles of a fractional CFO.
Steward
It goes without saying that your organization has assets and legal responsibilities. And these will require careful stewardship and protection.
A good fractional CFO would protect the vital assets of your company. They ensure that your business complies with regulations and identify possible risks and overcome financial challenges and pain points for stakeholders. They also offer long term strategies and balances them with short term goals and needs of the company. Likewise, they communicate value to investors and close the books correctly.
But not only are they stewards for the company’s assets; they are also financial stewards for multiple companies. They optimize a company’s profitability by finding ways to increase efficiency, use resources wisely, and spot opportunities. Having a qualified steward would no doubt grant you peace of mind.
Operator
Fractional CFOs could help you manage the financial challenges you present. They are responsible for efficiently and effectively managing your financial processes. Such processes provide insights into a business, such as financial planning and analysis, cash flow, taxes, etc.
As operators, they hold many different parts of a business together. That’s why they need a firm grasp on the company’s financial strategy, business model and industry so you can make more informed decisions based on solid financial data. Some of their tasks as operators include:
Investments
Financial modeling and forecasting
Quarterly reviews
Due diligence
Other financial operations
Strategist
Shaping your company’s future is important to improve your business and spread your mission. You’ll need thorough strategies to do. And fractional CFOs are always front and center when it comes to strategic planning and general financial strategy.
They help shape the company’s future and do financial analysis to enable businesses to make better decisions. They’re also vital in providing financial leadership and aligning growth strategies with your company's mission and vision. Fractional CFOs can identify and report what areas of the company are the most efficient, which are underperforming, how to improve those areas, and how much you will need to spend—all of which are necessary to create an effective growth strategy.
Through supporting long term investments and mapping out a financial course, they can steer your business to success. But experienced CFO`s don’t stop at developing strategies; they even take it a step further by helping enable its execution.
Catalyst
A great fractional CFO can stimulate and prompt a timely change in your organization. They can improve your business processes and finances by reducing costs, raising capital, and innovating in ways that add value and stability. Moreover, they drive business growth initiatives, such as pricing, adding value, and cost effective innovations aligned with your goals.
With the right fractional CFO’s keen insights and expertise, your business could grab opportunities to tap into new markets, follow lucrative industry trends, and more!
Benefits of Having a CFO
Mission-driven businesses can benefit greatly from working with a CFO. These businesses typically have a strong sense of purpose and a commitment to making a positive impact on their communities or the world. However, they may face unique financial challenges that require specialized expertise and guidance to navigate successfully.
One of the key benefits of working with a CFO is that they can help mission-driven businesses align their financial strategies with their core values and goals. By understanding the company's mission and vision, a CFO can help develop financial plans that support these objectives while ensuring the business remains financially sustainable.
Another advantage of working with a CFO is their ability to provide financial insights and analysis that can help mission-driven businesses make informed decisions. CFOs can help identify potential risks and opportunities, create financial models and forecasts, and provide strategic financial guidance that can help drive growth and profitability.
In addition, a CFO can also help mission-driven businesses navigate complex financial regulations and compliance requirements. This can be especially important for businesses that operate in highly regulated industries, such as healthcare or education.
Working with a CFO can also help mission-driven businesses maintain transparency and accountability with their stakeholders. By providing regular financial reports and updates, businesses can demonstrate their commitment to responsible financial management and gain the trust and confidence of their investors, donors, and customers.
Finally, a CFO can also help mission-driven businesses manage their cash flow effectively. This is crucial for businesses that may experience fluctuations in revenue or rely on grant equity funding or donations. A CFO can help develop strategies to optimize cash flow and ensure the business remains financially stable even during periods of uncertainty.
Maximize the Benefits of a Fractional CFO
As a purposeful, intentional, and empathetic Chief Financial Officer, I understand that not all businesses have the resources to hire a full-time CFO. That's why I believe that fractional CFOs can be a huge financial advantage to businesses of all sizes. By hiring a fractional CFO, businesses can access the financial expertise they need without the expense of a full-time salary, benefits, and overhead.
Fractional CFOs can provide a wide range of services, from financial planning and analysis to risk management and cash flow management. They can also help businesses navigate complex financial regulations, create financial models and forecasts, and provide strategic financial guidance. With their specialized skills and knowledge, fractional CFOs can help businesses make informed financial decisions that can lead to increased profitability and growth.
If you're unsure whether you need to hire a fractional CFO, or if you want to hire one but don't know where to start, I recommend scheduling a call with some fractional cfo companies, a fractional cfo business, or with the Profit Reimagined Team. Our team of experienced financial professionals can help you determine whether a fractional CFO is right for your business, and if so, help you find the right CFO for your needs.
We understand that every business is unique, and we take the time to understand your business's specific financial needs and goals. With our fractional CFO services, we can help you assess your current financial situation, develop a customized financial systems and plan, and provide ongoing support and guidance after we implement systems as your business grows and evolves.
In conclusion, an experienced fractional CFO can be a valuable asset to any business looking to improve its financial health and achieve long-term success. By working with a trusted finance professional like Profit Reimagined, you can access the financial expertise you need to make informed decisions and drive growth and profitability.