What’s a Fractional CFO? And, do I need one for my business?
Many small businesses can’t afford to have a CFO on staff but still need guidance in their strategic financial decisions and operations. This is where the Fractional CFO comes in.
As a small business owner, you’ve probably heard of a CFO or a Chief Financial Officer. You may have even previously worked in a business with a CFO. But what happens when your business isn’t big enough to keep a CFO on the payroll? Enter the Fractional CFO!
Feel free to insert superhero music here. We don’t mind.
What exactly is a Fractional CFO?
A Fractional CFO is an outsourced CFO, or Chief Financial Officer, who supports business owners on a part-time basis in the CFO role.
In other words, a Fractional CFO is hired on a retainer or contract basis to advise small business owners in their strategic planning and decision-making when it comes to the financial side of their business.
Here are a few of the FAQs I get when it comes to Fractional CFOs and how they work within YOUR business.
Why should I hire a Fractional CFO?
You know from my previous posts that the three systems I teach that entrepreneurs need to sustainably and profitably grow their businesses are...
✔️ Keeping Meaningful Numbers,
✔️ Making Decisions Informed by Facts,
✔️ AND Taking Consistent Action.
If you’d like to learn more about these systems, check out 3 Systems to Fast Track Business Growth and Boost Finances.
While meaningful numbers are the essential foundation of these three systems, they are also not going to make the biggest impact on your business by themselves.
For meaningful numbers, you can hire a bookkeeper — a critical role many business owners can outsource — but a bookkeeper is not usually the person you need to steer you beyond meaningful numbers into informed decisions and consistent action.
For guidance in your decision-making and action-taking when it comes to your finances, you will likely need a CFO to help you.
So, why should you hire a Fractional CFO?
You should hire a Fractional CFO when you’re ready to have someone on your team dedicated to the money side of your business. This financial expert will help you make the best decisions for your specific needs and goals. AND they will guide you in following through on those decisions to grow your business in a way that is profitable and tailor-made to where you want to be.
How do you find a Fractional CFO that’s a good fit for your business?
As with any other position on your team, it’s important to hire or contract someone who is the best for you.
When looking for a CFO to bring into your business, I recommend searching for someone who specializes or has experience in the type of business you are running and with the size of the company you are or will be managing. (Keep your growth plans in mind; ideally your CFO has experience with companies at the size you expect to be in 2 to 5 years; they’ve already seen the growth path and know what it takes to operate at that scale.)
I also recommend finding someone whose values and philosophies align with your own.
Here at CFO on Speed Dial, we love supporting women business owners who are passionate about making an impact. They’re committed to helping the environment, fighting for social justice, and furthering the dream of a more equitable world for people of all races and genders.
Digging into money and big decisions for your business can seem very personal as an entrepreneur, and it’s important to team up with people you feel comfortable with and who you will trust to guide you.
Yes, you need an expert, but you need one that fits YOU and the mark you want your business to be making in the world!
What specific tasks can a Fractional CFO tackle in my business?
You know that a Fractional CFO helps with your strategic decisions and actions in your business, but here are some examples of specific tasks they can tackle for you...
✔️ Financial Planning & Forecasting
✔️ Identifying & Solving Cash Flow Issues
✔️ Improving Your Accounting Processes to give you more meaningful information
✔️ Creating Data-Driven Systems so your team can
✔️ Building performance dashboards to keep you and your team informed day by day
✔️ Advising You in Investment & Loan Decisions
What we do in our Full Service CFO program
Put simply: We coach, we advise, and we crunch the numbers.
Full Service CFO brings a CFO to your team to provide financial analysis and systems crafted for you; delivered complete & wrapped up like a gift. We provide big picture strategy plus the details and systems necessary to execute your plan.
You’ll have the benefit of a longstanding relationship with a CFO who has deep knowledge of your business needs and goals. This means the next time there’s a crisis you’ll have no need to bring anyone new up to speed. You’ll have answers when and how you need them.
Our CFO support includes things like:
✔️ Short-term and long-term number crunching (Need a pricing review? We’re on it! Want to ID your most profitable line of business? Sounds like fun to us!)
✔️ Investor (or bank) ready financial projections
✔️ Support in honing your decision making strategy based on your vision, your numbers, your company, and your industry
✔️ Optimal tech, systems, and workflow for the financial side of your business
✔️ Reports and performance metrics that provide clear visibility (and show more growth and less debt the longer we work together!)
How can you learn more from a Fractional CFO now?
Well, let’s just say you’re in the right place.
Apply for 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. But we'll also talk about how CFO on Speed Dial helps companies like yours gain stability and resilience in a crazy and unpredictable world.