Outsourced CFOs: Keeping You up to Speed on Your Finances

As a busy entrepreneur, you have plenty on your plate without worrying about accounting and finance. Unless this is your particular area of expertise, chances are it’s not something you love to do anyway. Yet it’s critical to have a plan is in place which will help you navigate growth and spending. You need someone to carefully watch your budget, your cash flow, and your debt. It’s also a good idea to have someone who can identify venture capital opportunities and prepare you to take advantage of them.

In my years of experience working with early-stage companies, I’ve found of all the areas where start-ups require the most help and training, it’s finances that are often the root of all obstacles to growth. So here are ten reasons why I feel every early-stage business should have an outsourced CFO.

1. Outsourced CFOs are Affordable for Start-ups

Let’s face it – if your business is in early stages, you probably don’t have the kind of budget required to bring on a full-time CFO. An outsourced CFO like those at Shared CxO makes top-notch financial advice and oversight accessible to businesses of any stage, but carries special value for start-up operations. Your return on investment with an outsourced CFO is virtually guaranteed to be excellent, because you’ll exit the engagement with not only a solid plan for managing your company’s finances, but with the know-how to tackle it on your own until it’s time to hire a permanent CFO or in-house accounting staff.

2. Outsourced CFOs Will Teach You the Ropes

An outsourced CFO will lead your company towards financial stability and growth, and will act as your partner as you get on with the busy tasks of starting a business. A good outsourced CFO teaches you what you need to know to manage and observe your company’s finances.

3. A Passionate Outsourced CFO Wants You to Succeed

A truly dedicated outsourced CFO will come in, sort things out, devise a solid plan and depart when it’s appropriate – when your start-up is well on the road to success. Unlike in-house employees, who are understandably concerned with job longevity, an outsourced CFO’s ultimate goal is to, sooner or later, part ways with you when the time is right. You don’t have to worry about an outsourced CFO dragging his feet. At Shared CxO, our CFOs are deeply invested in client success, and they work efficiently towards that goal at all times.

4. Outsourced CFOs Give You Honest Feedback

Part of an outsourced CFO’s job is to review your plans and give you 100% honest feedback. This professional will tell you what’s practical, what’s on trend, what’s behind-the-times, what’s too expensive, what’s likely to deter investors, and more. I’ve found that even though entrepreneurs are fiercely protective of and emotionally invested in their ideas, they ultimately appreciate this kind of honesty, as they recognize it is crucial to their success.

Your ideas may have passed muster with friends, family and professional networks, but an outsourced CFO will give you advice with zero bias. In fact, at Shared CxO, the ability to remain emotionally unattached while remaining highly motivated is a quality we seek when hiring CFOs. The last thing you need is a best friend handling your books. You need someone who won’t be afraid to tell you the truth even when it’s tough.

5. An Outsourced CFO Leaves No Stone Unturned

You can expect a quality outsourced CFO to review everything – and I mean everything­. Your ideas will be scrutinized. He’ll go over your accounts with a fine-tooth comb. He’ll identify ways to improve your operational plans so that they’re more budget-friendly. He’ll help you set up scalable accounting processes and think a step ahead at all times. And he’ll prepare you and your start-up for approaching investors. Everything an in-house CFO would do, and arguably more (since an outsourced CFO’s mission is to stay extremely focused and pay attention to details while still getting things done quickly), an outsourced CFO will do.

6. Outsourced CFOs Allow You to Focus on What You Do Best

Entrepreneurs keep lots of plates spinning, but what happens when you run out of hands? You certainly don’t want to drop the plate that contains your company’s finances. Money is precious for start-ups. An outsourced CFO worries about the numbers for you, so you can focus on growing the rest of your business with passion and peace of mind.

7. Outsourced CFOs are Saviors During Rapid Growth

Perhaps you’ve been handling your start-up’s finances with panache through the earliest stages of development. But if your company suddenly takes off, will you be able to keep up? An outsourced CFO takes changes in stride and is flexible and fast-thinking enough to keep up with even the most rapid growth. And he’ll adjust your financial plans and accounting to match the pace, too.

8. An Outsourced CFO Nurtures Vital Relationships

An outsourced CFO sets the stage for important relationships with venture capitalists and investors, stakeholders, bankers, auditors and more. These kinds of relationships can be very intimidating for entrepreneurs, especially when they’re emotionally caught up in every aspect of their start-ups. Trying to pitch your idea to someone whose money could make it or break it is a daunting task unless you’re prepared. Your CFO will ready you for this and also act as a liaison on your company’s behalf for the duration of his tenure.

9. Outsourced CFOs Help You Make Smart Hiring Decisions

At some point in your company’s trajectory, it will be time to hire in-house accounting and financial talent. An outsourced CFO can help you vet applicants and determine the best fits for the jobs. Because these are very important roles within your business, the guidance and second opinion of a CFO is invaluable.

10. An Outsourced CFO Sets up Your Accounting Infrastructure

Even with a background in software and technology, I’m amazed how quickly new suites of accounting software hit the market. Each offers an arsenal of benefits, tools and options, and choosing the best software for your business can be overwhelming. An outsourced CFO will help you pick the best applications for your needs, and set up your software infrastructure while also planning and organizing complementary financial operations to ensure your company will run like a well-oiled machine.

Are you ready to incorporate an outsourced CFO into your early-stage business? Get in touch with us to discuss your needs or view our packages and rates. You can also find more information on our CFO Outsourcing and Advisory page.