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10 Reasons I Should Hire a CFO for My Small Business

A Chief Financial Officer can quickly get your financials in check and treat your business's financial health as their top priority! Find out 10 reasons you should hire a CFO for your small business in this blog.
african american woman smiling with a cup in her hands

A Chief Financial Officer is a senior executive responsible for overseeing and managing the financial aspects of an organization. Now, you might be thinking, “Oh, but I’m not really an enterprise-level organization that needs to hire a senior executive…”

Here’s where the shocker comes: a CFO is one of the best things small businesses can invest in for their growth.

So in this blog post, I’m bringing you 10 reasons why a CFO is as great an asset to your small business as they are to a larger corporation!

Why Should I Hire a CFO?

Smooth out your cash flow

According to the Bureau of Labor Statistics in the United States, 82% of small businesses fail because of poor cash flow. Sounds like a humbling statistic? It definitely is!

The easiest way out of hitting a cash flow problem that takes you out of business is to hire someone who can smoothen your cash flow, ensure your profitability and warn you before problems arise in cash flow management!

A CFO can also regulate your company’s cash flow with actionable plans, so your business continues to grow with proper financial records. That brings us to reason number 2…

Create budgets and budget variances

One of the main responsibilities that come with the CFO title is creating budgets and budget variances. And more often than not, small business owners are caught up with business operations to invest time into day-to-day financial budgets.

Without budgets for your business, you’ll be flying blind without navigation on how your business is performing, how much you’ve spent, and what you need to do as a next step. And ultimately, it can stop you from reaching your long-term goals.

Performs strategic financial planning

In order to reach your financial objectives and prosper with your small business, you’ll need strategic planning.  And when it comes to financial planning and analysis, you’ll need to hire a chief financial officer.

CFOs are masterminds of financial strategy, especially when you hire a good CFO with experience in your industry. They can provide you with hands-on advice on the business model and suggest alternative approaches and best practices to achieve better results.

Reviews legal documents

When you’re a small business, you’ll come across contracts, tax forms and so much more on a regular basis. While lawyers know best about the law in legal documents, your CFO is responsible for explaining the financial outcome of potential legal commitments!

This can save your business from accepting costly agreements and unfavorable tax planning down the road. With proper accounting and financial data, a CFO is responsible for ensuring you understand the financial results of every decision you make.

CFO Reviewing documents
from Pexels

Boosts your profits

If profits are on your mind most of the time as a young company, it’s time to hire a CFO for your business.

Most businesses have a profit and loss statement with their annual revenue and expenses noted down. But what they do wrong is rely entirely on it to be financially aware of their situation.

Ask yourself this:

  • Do you know if your Profit and Loss report is accurate?
  • Do you have time to reconcile the report?
  • Can you predict if your profits disappear or increase next month?
  • Can you predict any unforeseen expenses for next quarter?

If you answered no to even 2 of these questions, your business could flourish if you hire a part-time CFO. This person helps you benchmark for financials and profits using industry averages and standards to highlight areas of improvement and wasteful expenses that need to be stopped!

Determines room for business growth

Not only are CFOs juggling the numbers for you and guiding you along the way, but they’ll also be analyzing any room for business growth and expansion.

With proper management reports and experience in the industry, CFOs have a great eye for catching missing market gaps and financial opportunities that work out in your favor and will point them out to you!

Reviews financial reports

CEOs have visions of their product or service. But what they don’t often have is the ability to catch clerical and bookkeeping errors in financial statements and reports.

As a small business owner, such mistakes can be fatal for your financial health. And so, you’ll need to bring on a CFO that can review and reflect on financial statements to give you the confidence you might not otherwise have.

Develops financial forecasts

Financial forecast refers to predictions about your future business performance that help you make informed decisions today. Let’s understand this with an example:

Let’s say you’re running a seasonal business of knitted wool socks. Your CFO will step in and analyze your past business performance and current business trends to recognize:

  • the sales trend of your business and industry (winter months being the highest for your business model)
  • Cash flow forecast to help determine profits and losses
  • Steps to take to yield the most out of your financial forecast.

These forecasts can be the biggest difference between a successful business and a failed business.

Achieves financial objectives

Every business, regardless of size, has a financial goal to reach. It can look like any of the following:

  • Pay off your student debt within 3 years,
  • Earn enough to put a down payment for your first home,
  • Grow your business to earn $70,000 a year in sales,
  • Make enough profits to be able to leave your full-time job, or
  • Simply make ends meet at home!

No matter what your goals are, you can sit down with your part-time CFO and explain your goals to them. They’ll look over your resources, and your finance and accounting books and let you know every step you need to take to reach those goals.

And even when you feel some bumps along the road, they’ll be there to smoothen the impact of that in reaching your financial objective!

Improves internal control of finances

If you’re a control freak like me who absolutely needs to know where her finances stand, hiring a full-time CFO might be your best move yet. Dealing with financial statements and creating accurate financial records can be messy when you’re a small business or startup with varying revenue and costs.

But with a CFO role by your side, the internal control of finances can feel like a breeze. CFOs are responsible for cleaning up the financial aspects of the business to provide you with valuable advice on how to control your finances as a CEO.

group of people are gathered around a table and planning things
from Pexels

Does your small business need a CFO yet?

Now that you know how a CFO can grow your business and take your business to the next level, it might be time to consider hiring one! CFOs are so much more than just bookkeepers and accountants.

They lead the financial way for you and equip you with the knowledge you need to prepare for the future of your business. And despite common belief, you don’t need to reach an enterprise level to yield the benefits of hiring a CFO!

Destress Financially With Stanton Financial Co.

If you want to dive head over heels into being the creative mastermind of your brand, Stanton Financial Co. can help you.

Stanton Financial Co. is a premium bookkeeping and CFO service that brings big business strategies to small businesses, solopreneurs, influencers, and content creators.

Unlike most bookkeeping services, we make it easy for you to profitably manage your fluctuating income. Collaborate with brands and focus on doing what you do best– we’ll take care of everything else!

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