When Should an Entrepreneur Hire a CFO?

Similar to the conclusions reached by The New York Times in this article that I recapped here EntrepreneurWeek concludes similarly.

Not every small business or company requires the services for a Chief Finance Officer or CFO, and as such, it is important that an entrepreneur knows the right time to hire one. To hire or not to hire a full-time CFO is dependent on many factors.

  • When a Company has Enough Revenue to Justify Salary Expense of a CFO

Regardless of the size, any company can benefit from the services of a CFO; it is just a matter of having the funds to pay for a CFO’s six-figure salary. A CFO’s salary is affordable to companies who earn higher revenues. This is one of the reasons the necessity to hire a CFO does not usually happen until a business starts earning $10 to $20 million in revenue. Companies who do not have enough money to pay a full-time CFO can consider hiring a consultant part time.

  • When Dealing with Investors is a Necessity
  • When Planning on an Acquisition or on Being Acquired”

Read the full article on EntrepreneurWeek.com

Our firm has its own distinctive terminology, which refers to you and your peers as ‘Finders’. We’ve even written about your characteristics in our book, The Danger Zone:

Finders are the leaders of the company. They are not necessarily the people who lead all company employees on a daily basis. Finders demonstrate the type of leadership that “pulls” people into the future – employees, current customers and future customers.

Finders demonstrate some specific attributes that are essential to this success. There are numerous terms that can describe the leadership of a Finder; the following few will give you the main idea.

  • Visionary
  • Idea generator
  • Innovator or dreamer
  • Catalyst for future change
  • Relationship builder or creator

You will notice that all of the above attributes or future functions require action. Hence, Finders are all about the future. They do not live in the past. They view the past as a tool from which to learn, not as a place to dwell.

Finders often become frustrated

It is our experience that Finders often become frustrated with the day-to-day grind of running a business, which often takes them away from their original goals of starting the business.

Did you miss your 2011 numbers?  Are you frustrated?

Small and emerging companies without a CFO  should consider our complimentary Discovery Analysis™ it’s a great, risk free way to introduce ourselves, our capabilities and what you have been missing.  Did I mention free?  Please take a peak — then give a partner near you (see “Find a CFO”) a call.

Finally, if you’re among the 10+ million baby boomers looking to exit, 1) you may be looking to looking to sell, are you prepared to sell? aware of all of your options including: ESOP, GRAT, IDGT, Captive?, and 2) there are some compelling tax considerations highlighted here and due to expire 12/31/12 that you should be aware.

Yesterday you said tomorrow …

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