5-minute read
You have aspirations of growing your small business, but you don’t necessarily have the time or expertise to carry all the weight yourself.
Your “to do” list is a mile long, and your tasks shift from finances to sales to operations throughout the day.
You know you’ll need a CFO (Chief Financial Officer) soon, but you’re not sure if you’ll recognize when that time has come.
In truth, it depends a lot on your small business. Some companies need expert financial help before they ever get off the ground. Others can wait until they’re facing a massive shift, such as an acquisition or merger.
In general, though, there are a few key signs that indicate it’s time to hire CFO services.
Here are just a few.
Your Annual Revenue Exceeds $2M
We see it often: A small startup quickly grows into a successful business, and the owner can’t keep up with the finances any longer –but they haven’t realized it yet.
There’s no revenue goal that absolutely signals “you need a CFO,” but it’s safe to say $2 million per year is pushing the limits of what you can do without one.
At this point, you’re making a large profit, and you’re most likely not leveraging your income as well as you could be. Maybe you’re not taking advantage of certain tax deductions, or you could use some insight into your inventory practices.
At the $2M mark, it’s time to ask for an expert’s opinion. You can’t possibly know what you’re missing or where you can improve without some direction.
Your Internal Accounting Team Needs Guidance
In the early days, a small internal accounting team can usually handle the everyday bookkeeping tasks with just a little help from a CPA. At a certain point, though, they’ll need more guidance.
You may notice your bookkeeper seems overwhelmed and makes more mistakes than usual, or your team spends weeks gathering tax documents for the CPA.
Sometimes it’s even more subtle. Perhaps your bookkeeper keeps up with tasks as usual, but your accounting processes seem disconnected, and there’s no big picture goal in mind.
A CFO is both a leader and a financial expert. When your bookkeeper or internal team is struggling, it’s probably time to hire someone with vision and authoritative skills to keep things streamlined and on-task.
You Don’t Know Your Financial Metrics in Real-Time
Some business owners keep up with the finances on a daily basis. They know how much cash is in the bank, they have a list of financial goals for the current period, and they know exactly how close they are to reaching those goals each morning.
But that’s not true of every business. Some owners are so overwhelmed with tasks that they can’t keep up with the financial metrics. They ask for reports sporadically, take a glance, then shift back to more urgent tasks.
If you fall into the latter camp, you need a CFO ASAP.
Your business can’t thrive and grow if there’s no one on top of the finances. If your books aren’t in order, your goals aren’t clear, and there’s no one evaluating your financial metrics in real-time, it’s time to hire someone who can take these tasks off your plate.
Your Business Is Changing
At some point, your business will change–whether for good or bad.
If you’ve reached an inflection point and feel like you need some direction, a CFO is the person for the job.
Most inflection points are obvious: a merger, an acquisition, downsizing, bankruptcy, etc.
Others are more subtle. You might shift your marketing strategy or consider expanding your product line. Perhaps you’re facing a turning point, but you can’t even distinguish your options yet.
The bottom line is this: If your business is changing and you need financial guidance, a CFO can help define your goals and give you direction.
Consider Outsourcing a CFO
At this point, you may be thinking, “That sounds great. How do I hire a CFO that won’t cost ⅓ of my profits?”
You could outsource a CFO.
Outsourcing provides all the benefits of a traditional CFO without the hefty salary and benefits from an in-house executive. They’ll stay on top of your finances, provide expert financial guidance, and provide regular financial statements. It’s the ideal solution for a small business that needs a CFO but can’t afford a full-time hire.
Contact the experts at AccountedFor for more information.