4 questions to find out which CFO Service for small business is for you
Congratulations, you’ve built a successful business, and you are absolutely ready to take things to the next level. You want to expand your team, serve more customers, increase profits and even pay yourself more.
But there is a downside: as your business grows the financial side of your business gets more complicated, and stressful.
For some people, dealing with finances makes you incredibly anxious. Others are just tired of wasting time building spreadsheets from scratch. Either way, now is the best time to be sure you have your financial fundamentals dialed-in tight.
CFO services for small businesses could be exactly what you need to hit your lofty financial goals and eliminate the stress of having to do it all yourself.
But how do you know which CFO Services for small businesses will work for you?
Before you invest in CFO Services you need to be sure that:
It’s the right service or program for YOU.
Your business is in the best place for the program or coach to actually accelerate the level of success possible for your business.
Here are four questions to ask to decide which CFO Service for small businesses is right for you...
Question 1: Are your books in order?
First things first: Before anything else can happen in your business financially, you have to make sure your bookkeeping is clean and up to date.
If you’re keeping track of everything on an excel spreadsheet or still working to get your books in order, it’s not the time to bring in CFO-level support. My top advice for businesses at this stage is to find an experienced bookkeeper and offload most of this work.
At a bare minimum, I recommend using an accounting program to organize all your expenses and track your revenue. Lots of businesses we work with choose Quickbooks Online or Xero. Either one is fine and will get the job done. In fact, both will make it easy to track your spending by connecting directly to your bank or credit card. With the basics in place, your next step is to get started on budgeting, cash management, and other things a CFO would offer. If your business is small or you’re struggling, check out the free resources in Speed Notes. Twice each month, you’ll receive a newsletter with solid tips and tools for growth-oriented business owners who use numbers and values to drive decisions.
Question 2: Do the numbers in your books have meaning to YOU?
From years of working as a CFO, I know that small businesses all need 3 things to be profitable and thrive:
Meaningful Numbers
Informed Decisions
Consistent Action
The starting point is obviously that first pillar: meaningful numbers.
In a nutshell, meaningful numbers are...
Accurate — they contain real information based on solid facts
Up to date
Easily accessible
How do you get so that you have and use meaningful numbers?
Now that you have your books in order it’s time to make a habit of actually looking at the financial reports, especially the top 3 statements: Profit and Loss, Balance Sheet and Statement of Cash Flows.
Get curious about what the reports tell you. Here are some questions to review:
Does the story they tell agree with your sense of how the business is doing?
Are there parts of the statements that are mysterious or confusing?
If there are things you don’t understand, who can you ask for help?
Your numbers have to mean something to you in order for them to be useful!
(TBH, I’ve seen lots of financial reports that are setup to make it easy to file taxes – not to provide useful information to you as you make financial decisions. So if it doesn’t make sense to you, its time to start asking questions!)
Okay, so you’ve got the books. You’ve got the meaningful numbers. Now what? (Hint: It’s CFO Services time!)
Question 3: Which CFO Service is right for my small business?
CFO services come in all kinds of flavors and intensities. To keep it simple, here are the top three options:
Hire a full-time CFO on your team
Engage a Fractional CFO or Virtual CFO that acts as a team member on a part-time consulting basis, or
Find a CFO to act as a coach or advisor to you as you manage the finances of your business yourself.
Of course, large companies hire a Chief Financial Officer onto their team. Depending on the type of business and number of employees, hiring a full-time CFO generally makes sense if you have over $10 million in revenue (or have raised a whole lot of capital from outside investors.)
For smaller businesses who can’t quite afford or justify an FT CFO salary. A Fractional CFO or outsourced CFO adds tremendous value..
A Fractional (aka Virtual CFO) is hired on a retainer or contract basis to work on strategic planning and decision-making. We call this option our Full Service CFO package because we provide hands-on and consistent attention to your business. Our dedicated Virtual CFOs act as part of your team, help with hands-on analysis, and strategic choices about finances and business growth, and can also oversee the development of your financial systems and practices.
In the past year we have worked with our clients to:
Create a multi-year growth and operations plan to position the business for sale (at a specific target price set by the owner).
Prepare to raise funds from investors by building financial projections, decks and due diligence materials.
Apply for and secure over $2.5 million in business loans.
Create and manage debt repayment plans.
Restructure the finance team and expand accounting and analytical capacity,
Implement new Inventory systems, payroll systems, and accounts payable systems to streamline bookkeeping and improve the data flowing into financial reports.
Imagine if you could add this power to your team!
If a Fractional CFO doesn’t fit your budget don’t worry – there’s another option!
Enter the CFO Coach!
A CFO coach provides you with support as you improve the financial fundamentals in your small business. You get the framework and accountability you need to grow your business while also deepening your own skills so you can:
Manage your finances
Improve profit
Gain skills and confidence, and
Make crisp financial decisions based on real information (not just your gut)
You can get started with a CFO Coach through our Meaningful Money Program. Meaningful Money helps owners implement solid financial systems for your business and hone your skills at using those systems to get the financial results you want (and deserve!). The Program gives you tools and resources, plus ongoing coaching and a peer group of other owners to share and grow with.
Sounds great, right?
This brings us to...
Question 4: Where do I find a CFO Coach for my business?
Let’s just say you’ve come to the right place!
Check out our Meaningful Money Program, which gives business owners like you the skills and systems you need to quickly adapt, grow, and create accountability in your small business. The structure of the program combines tools and resources you can use yourself with ready access to CFO support with a small group of other business owners.
The program is for small business owners who...
Already have a growing company but want to be more profitable.
Are ready to boost their skills and confidence in dealing with numbers and decision-making.
Love to DIY things in their business but HATE building spreadsheets and budgets that don’t work.
Crave financial reports that give real information and help them understand what’s really going on in their company.
Are energized by learning from and collaborating with other business owners.
If that sounds like you, you may be ready to join CFO Advisor.
Find out with a free 30-minute meeting with one of our CFOs.
The focus of the conversation will be on your business, the challenges that are top of mind for you, and the actions you could be taking. We’ll also help you determine if CFO Advisor is the best next step for you!
The focus of the conversation will be on your business, the challenges that are top of mind for you, and the actions you could be taking. We’ll also help you determine if CFO Advisor is the best next step for you!