Is your company growing…perhaps faster than you can keep up with? Have you outpaced your planned growth and expanded beyond midsize? Has your company reached a stage at which you are feeling swamped or buffaloed by all the financial decisions you have to make?
Congratulations on your growth! And now it’s time to consider hiring a CFO.
A CFO, once in place, understands your industry, has familiarized himself or herself with the history of your company’s growth, and is totally conversant with the ins and outs of finance. If he or she lacks the first two qualities when you consider hiring him/her, that’s not an issue; the prospective CFO should be a good study and can learn about your industry and your company. But he/she must have a solid understanding of business finance.
Choose a CFO who is neither so conservative that he/she is totally risk-averse nor so free-spending that he/she risks plunging your company into disaster. Choose someone whose financial philosophy is similar to yours. After all, if your company has grown so stupendously, you must have good instincts for when to invest, when taking out business loans is prudent, and when to play it safe. Choose someone whose thinking matches yours. Then you can turn your mind to running other aspects of the business without having to spend too much time on the financial end.
Your new CFO will deal with cash flow questions and take the burden off your shoulders. Your new CFO will also advise you on whether it’s time to issue stock and whether it’s time to go public. Naturally, you’ll want to play a major role in making such decisions, but your CFO will be there to guide you and quite possibly even be the one to suggest such steps.
Your CFO will keep a close eye on receivables, delinquent accounts, and other such matters. He or she will also be responsible for seeing whether your company’s budget is realistic, where you are going over budget and why, and where you can trim the budget without hurting your output or reputation, or the welfare of your personnel.
If you’ve experienced rapid growth and appear to be on track to maintain that trend, if you’re about to expand into a new line of products or services, or if, on the other hand, your company’s productivity and/or efficiency seem to be on a downward curve, it may be time to hire a CFO.
If you, as the owner, feel you no longer have a firm grasp of your company’s financial situation, it’s definitely time to hire a CFO.
If, on the other hand, you do have a firm grasp of your company’s financial situation…but it’s keeping you so thoroughly occupied that you’re neglecting other aspects and needs, that’s also a sign that it’s time to hire a CFO.
What will a CFO cost you? Perhaps $300,000 a year not including perks and benefits…but wait! There is such a thing as a part-time or outsourced CFO, which, if applicable to your business, can save you considerable outlay.
And when you consider the benefits to your company, the savings your new CFO can effect and the growth he/she can promote, even a sizable salary may be well worth the expenditure.
So…are you ready to hire a CFO?