Every business needs a CFO if it wants to sustain growth. In our economy, finances come before anything else. You need money to grow your business, and you need the business to generate more money than it takes. Making sure this exchange works should be a top priority for any business leader. There isn’t even a close second.
But it also shouldn’t be the sole job of the owner. People get into small businesses for various reasons, and it’s rarely just to make money. While finances are critical for your business, you should focus on what you’re good at and hire other folks whose strengths are your weaknesses. Since finances are a top priority, your CFO should be the first hire.
What is a CFO?
A CFO stands for Chief Financial Officer, and they handle all of the financial affairs of your business. This is long-term managerial position who oversees accountants and bookkeepers. They organize reports and report to the CEO, President, or owner. For small businesses, a CFO can be catered to what you need, but should usually be a professional who expert accounting experience and fluent financial literacy.
Is it Too Early to Hire a CFO?
You can definitely hire a CFO too early in your business. Many small businesses and startups take years of development before settling their ground. Some businesses have a specific start date where they have their product together and it’s ready to launch, but most businesses don’t take this approach. Instead, they start their business with a product, and they adjust the project and work with their community until they find something that sticks.
This initial phase is not a good time to hire your CFO. If you’re unsure of whether or not you’re in this stage, consider the following:
- Is your product finalized?
- Do you have a clear marketing strategy?
- Do you have a set location?
- Did you start hiring anyone?
- If you did, are they full time employees?
- Are you starting to see consistent growth?
If you answered no to any of these questions, then your business is not ready for a CFO. CFO’s are an investment that should only come in when your business is stable.
Is it Too Late to Hire a CFO?
If your business is doing well, it’s hard to be too late. But it is possible. Mainly this happens when there are signs of collapse. If you’re seeing a trend of losses and you don’t know how to get out of it, then you’re in an emergency zone and you need other experts instead of a CFO. In this case, you need consultants who can help turn your marketing around and perhaps a financial advisor who can look at your business and recommend fixes. That doesn’t equate to a CFO, which is a long term, managerial hire.
I’m Not Ready to Hire a CFO, but I Need Financial Help. What do I do?
A CFO can take on the role of bookkeeper and accountant, plus a few more responsibilities. But that is a lot of work for one person and very expensive. If you’re a small business with only a few (or zero) employees, then you might just need a bookkeeper.
A bookkeeper records your expenses and keeps your books up to date for you. VersaTel Solutions has several bookkeepers ready to help small business owners get a strong footing on their finances. For any growing business, a bookkeeper should be your first hire.