How A Fractional CFO Can Grow Your Small Business

Running a business can be very stressful, especially if you’re doing it alone. Regardless of size, every company has several departments requiring regular monitoring and management.

The main, and probably the most important, is the financial department. Without knowing how the money moves in your business, you won’t see what you’re doing right and where to adjust your operations.

As a solo entrepreneur, managing every sector of your business can be difficult. It becomes even more challenging when you have to sit for hours analyzing your financial reports.

Therefore, hiring accountants can help reduce this pressure. However, sometimes your business might need someone with extensive financial experience, and hiring such people permanently can be very expensive.

For that reason, most business owners opt for fractional chief financial officer (CFO) services like those offered by consultants like Solved By Tanna. But is this an ideal option for you?

This article discusses how these services can help grow your small business.

What Is A Fractional CFO?

Before going any further, you must understand what a fractional CFO does. It refers to someone who offers their financial services on a contractual or part-time basis.

These professionals often have extensive experience in the field—usually at least three previous clients—which is one reason startup owners choose to invest in them.

Unlike full-time CFOs, fractional CFOs tend to work with more than one business at any given time. As a result, they have a good grasp of all possible financial conditions throughout the year.

The primary goal of hiring the services of these people is to prepare your business for the next step. Here is how their expertise can help accelerate the growth of your business:

They Offer Immediate Financial Insights

Since a permanent CFO can offer much-needed insights as you make your decisions, their experience limits what they can share. Most of CFOs by trade have worked for very few clients on a full-time basis.

This number of clients means they have little experience in diverse financial situations other than those of their previous clients. As such, when you hire them, they’ll need to spend some time learning your operations before they can submit their opinions and advice.

Fractional CFOs, on the other hand, have been in that situation several times. As mentioned, most of them have worked with at least three clients before (and that’s one thing you should consider when deciding on the best candidate). The fact that they’ve ‘been there, done that’ means they require virtually no learning curve.

As soon as they get the job, it’ll only take them a few hours or days to analyze your situation and pinpoint any issues. These immediate insights can accelerate the time you need to implement new ideas and grow your startup. So, be sure to consider taking advantage of the experience brought by these professionals.

They Come Up With Actionable Solutions

Getting recommendations from financial officers is one thing, but implementing those ideas is a different hassle. Many small businesses struggle because the ideas they get from their financial advisers are good but not actionable.

An actionable solution considers the position of your business, your customers, and your company’s ability to implement that solution.

Fractional CFOs don’t just point out the areas you need to address in your operations. Still, they also recommend the process of achieving that. Their experience in the field gives them enough ideas to share what they can do to make your goals a reality.

Your full-time team may lack the expertise or time to find reasonable answers to your issues. On the other hand, a fractional CFO can offer short-term and long-term solutions. Implementing such actionable ideas gives you a better chance of succeeding in your growth as a business.

Streamlines Your Financial Process

Growing your business requires you to have a solid set of financial processes. Unfortunately, many entrepreneurs aren’t firing on all cylinders in this department. As such, they struggle in their decision-making process because of unclear financial reports.

A fractional CFO can help streamline that and make it easier for you to get timely results and reporting. This way, you’ll have all the resources to make informed decisions. In addition, these professionals bring efficiency, effectiveness, and much-needed order to your current financial processes.

They can also go a step further and design new strategies to streamline existing ones. Remember, well-defined processes in your financial department are key to your growth as a startup.

Enhances Skill Building

As a business, you can always grow better if your employees are also improving in their areas of expertise. For one, your financial data is going to grow when you scale. So, ideally, you’ll want permanent employees in your finance department to gain more skills and experience to handle this significant data in the future.

One way of ensuring this is through training. Still, even after that, having an experienced professional as part of your team is always a good idea. A fractional CFO will help improve your team’s performance and give each individual a chance to gain and sharpen their financial skills.

In addition, the mentoring and development services offered by these professionals when working with you will help grow your team and consequently enhance the growth of your business.

Conclusion

If you’re running a small business, you already know how tedious and demanding it can be. Managing all activities related to your enterprise will require a lot of focus. Unfortunately, you might not have enough time to analyze your data and make informed financial decisions.

If you’re struggling to get the desired results from your finance team, then a fractional CFO can help you achieve your goals. These professionals offer insights, provide actionable solutions, and streamline your overall financial processes.

Their experience can also come in handy in mentoring and developing the skills of your in-house finance team. So, suppose you’re still unsure whether to hire a fractional CFO. In that case, the aspects covered in this article are reasons enough for you to make that investment and accelerate your business growth.

Read Also:

• How to Build a Personal Finance App?
• Advice On Hiring An Accountant For Your Small Business
• 10 Things You Wish You Knew Before Starting a Business