Business owners typically gain immediate comfort with accounting services. But, more advanced skills become a major differentiator between companies that thrive and grow. For most businesses under $20M in Revenues, hiring a CFO is unattainable. Many under $10M have only a Controller or Accountant.
A Fractional CFO can make a difference!
Financial planning is key for managing market forces for growth. A common challenge with Founders and CEOs is believing ALL problems are a sales problem. Yes, all businesses need sales! But, there are times in which the next big deal just digs a deeper cash hole. Sales may be coming in the door, but the costs of delivering to orders escalated…and no one was aware of it. And, in an over simplistic approach, operations will push for price increases in the market, rather than pushing for operational efficiencies or testing assumptions in the core business costs. Sound familiar?
Don’t wing it! Now more than ever, the current environment doesn’t allow Owners/CEOs to go on auto-pilot. Understanding costs, growth, scale, timing and the additional investments for efficiency is key to being able to grow. These are all issues for which CFO skills provide valuable insight to your business.
What are CFO skills? The CFO skill set is critical to moving the monthly accounting to management information. By transforming into critical management insights, such as changing costs and margins essential for cash management, decisions can be made in a time manner. The CFO skill set also targets financial forecasts. Without a proper forecast, CEOs and managers are looking in the ‘rearview mirror’ to make decisions. Anticipating the impact of growth, scale, fluctuating input costs or seasonal trends allow managers to improve the quality of decisions. Business assumptions allow leaders to anticipate changes in the business and make smart decisions for generating growth and a return on investment. Finally, the CFO skill set is necessary for the capital strategy. It begins with rigorous testing of assumptions, working with managers to plan and communicating the capital needs with loan officers/investors.
Why not just hire a CFO?
A common mistake is to believe an accountant, or even a controller, offers CFO-level skills. That is most often not the case. According to a recent salary survey, the average cost of a CFO for a private company with less than $20M in revenues is $200,000, and most organizations require $10M+ in revenues to make that reach.
Don’t be dissuaded. There is help! The Fractional CFO becomes an incredible resource for achieving growth.
Learn more about McCoy Advisors Fractional CFO Services…
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