And Why You Need One Right Now
What is your goal for your business?
As fractional CFOs, when we first meet with our clients, this is among the first questions we ask. Your goals will inform much of our work supporting your company – whether we focus on preparing you for a near-future exit or growing and building the value of your business over time.
This is what makes our fractional CFOs – many of whom are also CEPAs – a vital (and often missing) piece of the exit planning puzzle. Many business owners enlist exit planning experts as they approach the exit process, bringing in an army of resources to make the most out of what has already been built. A fractional CFO, however, becomes embedded in your business over time and, in the process, comes to serve as a value growth advisor – a financial expert who can help you grow the value of your business whether your exit is around the corner or years into the future.
How Fractional CFOs Drive Value In Your Business
Fractional CFOs make the role of chief financial officer accessible and affordable for small to midsize businesses. We embed ourselves within a company, becoming an integral part of the executive leadership team, analyzing the financial performance of the business, and designing a strategic roadmap based on the overarching goals for the coming months and/or years.
This work comes into play at every stage of Value Maturity:
- Identify: During this stage, fractional CFOs play a vital role in determining the value of the business as it stands today, providing the insights and data necessary for entrepreneurs and leaders to make well-informed strategic choices.
- Protect: This stage is all about mitigating risk. Fractional CFOs take this work seriously, helping you understand your financial risks and how to safeguard the existing value of the business. Just as important as building for the future is protecting what you have today.
- Build: This stage is focused on building the value of your business, and it’s where fractional CFOs shine. We create strategic roadmaps around your goals, which chart your path to growing value over time. As fractional CFOs, our focus is always steadfastly on the future, making us a fundamental part of your value growth process.
- Harvest: This stage is typically when business owners enlist the help of external exit advisors as they seek to reap the most value and reward from their businesses. We would argue, however, that, by this stage, you’ve already lost significant growth opportunity as the prime years for building business value have passed. If you’ve enlisted a fractional CFO during the initial stages of value maturity, however, you can rest easy that you’re well-positioned for a successful exit. Any additional expert perspective is icing on the cake.
- Manage: A good fractional CFO will ensure your business is positioned to help you achieve your long-term financial goals. And while management seemingly comes at the end of the exit process, the seeds of it are planted years before – seeds that an embedded fractional CFO can help grow.
How Does a Fractional CFO Fill the Gaps in the Exit Planning Process
Exit planning advisors are an important part of the exit planning process as they can help you reap the most value from your business when you decide to exit. However, by the time these advisors come into play, it is often too late to enhance your company’s value. This is where fractional CFOs provide unique benefits.
First, we can help you grow the value of your organization years in advance of your potential exit, which benefits you now and in the future.
Second, we are willing and capable of doing the essential and time-consuming work that often falls outside the scope of work of an exit planning advisor. We provide insights and data to facilitate better strategic decision-making throughout the lifespan of the business, for one. We also optimize financial operations to enhance profitability and ensure a healthy cash flow. And, as we have mentioned previously, many fractional CFOs are also CEPAs, meaning you could reap the benefits of having both a fractional CFO and a CEPA embedded within your organization over time, not just in the lead-up to exit.
Finally, as a member of your executive leadership team, we are committed to you and to your business – to providing the support necessary to help you achieve your goals, whatever they may be. Because we are not full-time employees of your organization, we have no ulterior motives or bureaucratic leanings. We advocate for what is best for you and your company, always. We believe Scott Snider, president of the Exit Planning Institute, put it best: “Value acceleration actions require tireless commitment and relentless execution. Exit planning is simply good business strategy integrated with your personal and financial goals and objectives.”
Want to know what this looks like in practice? Check out how FocusCFO helped this multigenerational family business through a successful exit.
Let a Fractional CFO Protect Your Financial Future
Chances are, if you’re reading this article, you’ve started to consider what an exit might look like for you and your business. Our advice: Let a fractional CFO serve as your value growth advisor and start building the value of your business now. Even if your plans change down the road, you will always benefit from the financial security, strategic guidance, and value enhancement that come with prioritizing the financial health of your business.
At FocusCFO, we specialize in helping small to midsize businesses on the climb to sustainable, transferable business value. Contact us today to find out how one of our fractional CFOs could support your business now and in the future!
