Every business owner wants to see their company succeed.
And if you are like most business owners, you probably wear a lot of hats. You’re responsible for making sales, marketing your product or service, fulfilling orders, and so much more. But what happens when you hit a roadblock and don’t know how to get past it? What if you’re losing time for other value adding tasks and causing more harm than good?
It’s extremely tough to juggle all the different aspects of your business all on your own. That’s why so many business owners feel as if they are on their own when it comes to navigating the waters of success. And that, dear friends, is a pity.
Because with the help of a good fractional CFO, your path to prosperity can be made that much easier. After all, a good idea and some grit aren’t all that it takes to make a business successful. Having the right team in place could mean the difference between success and failure. And a fractional CFO is an integral part of your team to guide your business down the path to success.
A fractional CFO is also an affordable option for businesses that need guidance but don’t have the budget for a full time CFO. They could provide crucial advice and support financial planning, budgeting, cash flow management, and so much more! With the help of a fractional CFO, your business can maximize its potential, reach new heights and achieve long term success.
Keep reading to find out how a fractional CFO can steer your business toward success, charting the course and making sure you stay on track. Trust me—it’s worth considering!
What’s a Fractional CFO?
Let’s start with the basics.
So what exactly is a fractional CFO?
A fractional CFO is a financial consultant who works with businesses to improve their financial stability and operations. They provide services for companies in a part time, retainer, or contract agreement. Such a setup offers companies the experience and expertise of a high end, skilled CFO without the in house costs—salary, benefits, and bonuses—of a full time CFO. That makes them perfect for growth stage businesses.
They provide advice on everything from budgeting, cash flow management, strategies, reducing costs, and more. But unlike a full time CFO, a fractional CFO’s duties are typically performed on a project basis or specifically tuned to a company’s specific challenges or goals. If you’re looking for help improving your bottom line, a fractional CFO may be the right solution for you.
How Does a Fractional CFO Help Your Business?
Moving onto how a fractional CFO helps your business.
If you’re a bit hesitant on getting a fractional CFO, it may be because you’re unsure of how they work to help your business grow and succeed. Knowing exactly how they can contribute to your business and what to expect when working with them might alleviate your doubts and fears.
Here’s what you should know about working with a fractional CFO to better prepare you.
Spending the time to understand your business. Before they can help your business, they must first understand it and the specific issues you’re encountering—and even spot problems you didn’t know were there. Usually, this step takes three months.
Providing appropriate solutions. Once they’ve understood your business better, they’ll be able to provide accurate solutions tailored to your specific business and needs.
Establishing trust. Trust is crucial, especially since they’ll be dealing with your money. It goes beyond experience and technical skills; you’ll need trust. And for that, you need to make sure there’s values alignment and personality match.
Offering insights on your business. Since they take the time to study your business, a fractional CFO can provide insights on your clients, products, suppliers, and more so you can maximize your business’ potential and address pain points.
Getting clear on the gross margin. Being the financial experts that they are, fractional CFOs can help rebuild and restructure your finances in such a way that the gross margin and other financial aspects become clear.
Knowing your cash runway. They can help you get clear on cash runway by setting up strong financial management process, making cash inflow and outflow visible.
Managing processes with lenders and investors. Fractional CFOs could help to build trust with your lenders and investors. By being transparent, they help you build credibility with lenders and investors, which makes them more likely to trust and aid you.
Making strategic decisions. With an in depth knowledge of your business and financial expertise, fractional CFOs help you be reactive and make sound financial decisions.
As you can see, a fractional CFO can help your business in a number of ways. But perhaps the most important is that they act as not just an advisor and sounding board for you and your team but also as a partner. They could provide invaluable advice into financial planning, budgeting, forecasting—all while keeping an eye on your company’s long term goals and needs.
Knowing what to expect when working with a fractional CFO does not just help in getting rid of any doubts that might be plaguing you. It also allows you to better prepare and dive deeper into your business so you can give them the right information they need to drive business growth.
What Does It Take for a Business to be Successful?
What are the ingredients to a successful business?
That’s a question that most, if not all, fractional CFOs get all the time. So here are the keys to creating a successful business—right from the horse’s mouth!
Set Up Your Financial Statements Properly
You already know why you need accurate and correct financial statements.
They help you understand your business financial health, and they are also crucial when dealing with lenders and investors. Not only can they help you build trust with them, but they also help in presenting financial information accurately and effectively, which increases your credibility.
But most importantly, setting up your financial statements properly allows you to know the gross margin. If it’s too low, then it’s likely you won’t have a profitable business. Or your business may seem profitable, but it actually isn’t—but since it seems profitable, you won’t notice the problems until it’s too late and your finances are already on the rocks.
Manage Cash Flow Effectively
Cash flow management is critical. When you don’t manage your business’ cash flow properly, it causes you to lose credibility with customers, suppliers, lenders, and investors.
That can hurt your company greatly—trust is important in business, especially if you’re building a social impact business. When done well, cash flow management gives you a complete picture of your financial health. Understanding your cash flow enables you to forecast company profits more accurately and identify opportunities for investment.
Regardless of how much work you have in the pipeline, unpaid invoices from customers as well as other financial wrinkles could lead to a black hole in your finances. Avoiding cash flow issues is key to the success and survival of your business.
Have the Time and Space to Pursue New Opportunities
As a business owner, you must have so much on your plate already. But freeing up the time and space to think about new opportunities is key, especially when you’re in the growth stage.
Thus, doing everything on your own and wearing too many hats is not the best strategy. Instead of doing your finances all alone, investing in a fractional CFO could help you focus on things you love, things that can add value to your business. Pursuing new opportunities and exploring new things allows your business to flourish.
Should You Invest in a Fractional CFO?
As the business owner, you are the heart and soul of your company.
But even the most talented, determined individual can’t do it all alone. You’ll need someone in your corner who understands the numbers and could help you make sound decisions based on factual information and financial data, not just hunches or guesses.
A fractional CFO can help your business grow in many different ways. By providing the correct financial guidance, you could avoid common pitfalls and make better decisions for the future of your company. They can also help you stay on track and keep your company growing. With that, they could guide your business down the path to success and create a financial stability while still allowing you to maintain control over your vision and operations.
Are you looking for a reliable partner to help steer your business in the right direction? Do you want to know how fractional CFO services could put you on the track to long term success?
If you want to learn more about investing in a fractional CFO, feel free to connect with our team at profitreimagined.com/letschat. Our fractional CFO would be happy to speak with you on how to grow your business to the next level. With the guidance of the right fractional CFO, you could maximize profit to make a bigger social impact.
If you’ve decided to invest in a fractional CFO, then only one question remains.
Ready to take your business to the next level?