Scaling a company comes with decisions that may feel beyond your scope of expertise. You’re an expert at many things, but not all things. To reach the next level, you have to know when to stop doing everything yourself.
Nowhere is this more apparent than in your financial strategy. As operations grow more complex, "running the numbers" requires more than just a quick look at your bank balance and requires a shift toward strategic financial planning. Too many business owners think that high-level financial guidance is out of reach; a Fractional CFO model offers a high-impact, cost-effective solution to the growing pains of a successful business.
Q: Why do business owners neglect to bring on such a critical addition to the team?
Beyond simply not knowing they need a CFO, many don’t want to spend the money. What many entrepreneurs don’t realize is that they’re already "spending" that money in lost profits and misspending. You can’t always go with your gut in making financial decisions; you need an educated financial point of view.
Q: What does it cost a business when the owners avoid bringing on a CFO?
A lack of direction leads to lost opportunities to price products properly, manage inventories, and separate good customers from bad customers. Demanding clients often have "hidden costs"—additional management time and hand-holding that eat into margins. It’s hard to see these leaks without actually running the numbers.
Q: Is there a revenue mark or headcount that determines when a business owner should look for a CFO?
Consider a fractional CFO when you need critical forward planning. If your business is up and running with many spinning plates, but you’re not sure where to take it next, you need someone to make sense of the financials. A CFO turns raw data into actionable insight.
Q: What else will a CFO do for the company?
A CFO "peels back the onion" to find where you might be losing money. They take a magnifying glass to numbers—staffing, manufacturing costs, and sales cycles—to calculate an accurate ROI. They are in charge of the financial future: collecting invoices, managing cash, and vetting new business models for accuracy before you commit.
Q: Why can’t an accountant or bookkeeper do the job?
Most accounting firms focus on the "rear-view mirror"—the level of detail needed to satisfy the IRS. A regular bookkeeper records transactions and handles payroll, but you aren't getting forward-looking guidance.
| Bookkeeper | Tax Accountant | Fractional CFO | |
|---|---|---|---|
| Focus | Daily Transactions | The "Rear-View Mirror" | The Financial Future |
| Primary Goal | Accuracy & Payroll | Tax Compliance/IRS | Strategic Growth & ROI |
| Business Impact | Organizes the past | Satisfies the IRS | Directs the future |
Q: Aren’t most CFOs overqualified for my business? How can I afford one?
The fractional CFO model is a win-win. Your business benefits from the extensive experience and knowledge of a veteran leader at a fraction of the cost of a full-time hire. Average engagement is between one half or one full day per week.
At FocusCFO, we are passionate about small businesses. If you’d like to learn more about how we can help, let’s have a conversation.
Michael Stier is an Area President for FocusCFO based in Charlotte, NC.