Growing businesses often reach a point where they need professional financial guidance—beyond budgets, cash management and monthly reports. Owners need someone tasked to optimize the business’ financial performance, including its reporting, liquidity, and return on investment.
You may be asking, does my business need a CFO. Should I invest in a CFO service? What benefit will the business see, and what value does it add?
A professional CFO, whether full time or on an as-need basis, acts as a key partner in your business, offering expertise beyond crunching numbers. They manage investor relations, strategic planning and the critical financial aspects that drive business performance. If you’re seeking a financial champion to provide structure and create sustainable financial success within the business, consider these strategic initiatives powered by a CFO.
Funding Business Growth:
Funding options are critical to businesses. Since growth requires additional technology, operating systems, space, and employees, it pays to have a financial chief to analyze the investments needed and the terms to obtain extra capital. You may need short-term working capital loans or a line of credit. Your CFO can advise on options, risks, and even manage relationships with your investors, lenders and key partners.
Many companies experience a plateau in sales, unable to close the gap in growth. As the role of the CFO shifts from core accounting responsibilities to more strategic initiatives, one of the emerging areas of focus is helping organizations to drive revenue growth. The CFO will analyze more cost-effective vendors, work on improving productivity and efficiency, and focus on ways to boost sales with existing profitable customers. The CFO will devise strategies to increase cash flows while keeping costs down, hence improving profitability.
Financial advice is critical to all businesses. Whether you’re hitting a cash flow crunch, growing more rapidly than anticipated, or are exploring new ways to increase profitability, a CFO can provide objective and expert financial advice. They can provide goal clarity and devise action plans to forecast and meet those financial goals.
Preparing for a Merger:
When a business is preparing for a merger or acquisition, a team of experts is needed to evaluate the transaction and provide due diligence. CFOs are an integral part of an M&A transaction giving guidance and influence during and after the deal. They can help steer a deal in the right direction, preventing one from going south.
Most owners of privately-held companies have long-term needs, such as to increase market share, increase company value, increase their personal wealth, reduce cash flow worries, reduce stress, create more free time, build a solid retirement fund, and create security for loved ones. When you need the expertise, a CFO can provide direction and a strategic plan to help achieve these critical needs while removing the barriers that get in the way.
Navigate Business Transitions/ Exit Strategies:
For most business owners, selling their business is the biggest sale they will ever make, one in which they have the most risk and the least experience. If selling your business is part of your exit and retirement strategy, you only have one chance to get it right. A CFO can help you decide and prepare for the best exit strategy for your needs. When the day comes to exit the business, transition to the next generation, or sell, you’ll already have trusted relationships in place and have taken all the right steps years in advance to position your business to receive maximum value.
Forecasting Financial Projections:
Having accurate and timely financial records is vitally important for day-to-day operations. In addition, having an accurate financial forecast can be the difference between success and failure for a company. The CFO can not only make sure your financial statements and reports are current and accurate, but they can help you set Key Performance Indicators (KPIs) or goals related to finances that you use as guideposts for defining monthly or yearly targets. By doing this critical step, you can plan and predict where the company will and should be next month and in 5 to 10 years from now.
The financial advisory services CFOs offer, you can obtain a higher quality of financial guidance from an expert whom you may not have the resources to have on staff full time. With their deep industry knowledge of finance and goal clarity, they can proactively work on strategic planning, business management, and financial operations, while you focus on what you enjoy most. The combination of retiring business owners exiting and the economy fueling growth opportunities that need to be strategically managed, means businesses need a CFO on their side.
This is how B2B CFO® can help. Since 1987 we have created long-term, professional relationships on a financial advisory basis. Our services are provided objectively by seasoned partners who average 20+ years of experience using the B2B CFO® state-of-the-art processes.
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