5 Questions to Cure Your Small Business Cash Flow Headaches with a Fractional CFO
Question 1: Am I making any profit?
Question 2: What is the gap between profit and cash?
Question 3: Is there cash hidden in the balance sheet I can uncover?
Question 4: Can I obtain a bank loan to support the gap between profit and cash?
Question 5: Can I reach my growth goals and not run out of cash?
The Dilemma
You conferred with your bookkeeper and your CPA, and you again sought the counsel of you Uncle. He said you need a CFO to help you answer these questions. He noted CFOs are typically highly skilled professionals with backgrounds that span multiple decades of financial and operational experience but they may command a salary that might be unaffordable.
The Role of the CFO
A CFO typically functions as the third leg of the stool for your company. They are as good at understanding cash as most owners are at understanding customers and operations. They are an owner’s financial partner; they work to make sense of and provide business insights from the numbers that emerge from your accounting software; they work to integrate the past into a picture of the future. A CFO is there to help the owner make sure the business is healthy. They provide a little aspirin to dull the short-term pain, strong antibiotics to cure any illnesses, and a wellness and fitness program to build long-term health.
Fractional CFO Solution
Alas, many small businesses cannot afford the expense of a full-time CFO. A perfect solution is the use of a fractional CFO. The use of a fractional service model allows the investment to be very moderate relative to other professional services. Most are engaged on an ongoing long-term basis, work onsite at their clients, and average a day a week over time. They work as partners and confidants of the business owners to help them meet their goals and assure the financial health of the business. How do I know this? I’ve been a fractional CFO for four years.
