3 Signs Your Business Needs Help from a CFO

When does a business need help from a CFO (Chief Financial Officer)?  The answer depends on your circumstances, but there are certain indicators that make it apparent that you need help managing the financial part of your business. When you’re a small or medium-size business, you face a lot of decisions, big and small, throughout the day and work week. Since the role of a CFO is not always clearly understood by entrepreneurs, many businesses find themselves without one until the need for someone to fill that spot suddenly arises.

Here are 3 signs your business needs help from a CFO:

1. You Need to Save Money, But You’re Not Sure How

Many entrepreneurs find that hiring a CFO is too expensive. In today’s world, you don’t actually have to hire a full-time CFO.  Today, you have options to hire a part-time or outsourced CFO.

It’s important for you to realize that there’s a chance that the money you would spend on a CFO is already being spent on other, less effective ways. You’re probably spending that money in lost profits and misspending.

A CFO’s perspective can help price your products and services better.  They’ll help manage your inventory more efficiently and zone in on what separates good customers from bad customers.

2. You Need Help With Financial Planning

Is your business working to do some critical forward planning, but you’re not sure what the exact steps need to be to reach those number goals?  A CFO’s job is to make sense of your financials and translate that to tangible action to meet those goals.

There are many hidden costs in doing business and sometimes these costs aren’t as obvious as you might think.  It may be difficult for your business to perceive this concept, but a CFO can lend helpful perspective.  For example, how do you know whether a customer is good or bad for your business?  With your CFO’s help, you may find that a particularly difficult customer costs you more in time and money than the revenue they bring to your business.

3. You’re Leaking Money, But You’re Not Sure Where

A CFO’s job is to understand your financials inside and out. He or she will be an expert at examining the many layers of your business. For the CFO, it’s similar to peeling back the onion. While examining each layer, the CFO’s perspective can help you find out where you’re not making money.  Sometimes, this is often in one or more areas of your business.

It may sound dramatic to say you’re leaking money, but the truth is it’s not out of the ordinary for a company to lose money and be uncertain about the cause.  Data and numbers don’t lie and a CFO knows exactly which numbers to examine to help determine the cause of a money leak.

They’ll take a look at items such as distribution and manufacturing costs.  A CFO will become thoroughly familiar with your business.  They’ll start by examining sales cycles or products and help you to establish an accurate return on investment.

A CFO’s skill-set is different than your CPA’s skill-set.  The skill-sets are complementary and they play an important role to help you keep your business thriving.  If you want to examine all the financial business choices that your business has been making, that’s where a good CFO comes in handy.

Remember, running a business successfully does not need to be complicated.  Keep it simple!

For more valuable articles to help you successfully manage the challenges of growing your business profitably, please search our blog at our website www.portalcfo.com.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.