The majority of our clients are relatively small in terms of scale. Most do under $10,000,000 in sales each year. Because of this, they aren’t privy to having the same in-depth financial reporting that larger companies have. Nor do they have professionals analyzing their company figures. Many don’t even have bookkeepers that are keeping track of all of their finances.
Along with this, a lot of our clients that are business owners don’t have the ability to read their own financial statements. While the majority can read the profit and loss statement, practically none of them can read and explain their cash flow statement. As far as reports are concerned for a business owner, cash flow statements are perhaps the most important.
Because of this, I will be going over some of the reasons it makes total sense for a lot of private companies to actually rent a CFO for startups or for their business.
Reasons To Rent A Chief Financial Officer (CFO):
1. Renting a CFO is much more cost effective than hiring a professional to work for a salary. After all, you pay less for it and not all businesses will require the services of one throughout the entire year.
2. They will be able to help you understand where your cash is coming from, where it is going, and how to properly budget for changes in cash flow.
3. A CFO will help you understand all of the key performance indicators to analyze your company.
4. They will be able to help you develop ways to measure the drivers in your business to ensure your key performance indicators are moving in the right direction.
5. They will be able to help you understand how to gain financing you need for your business.
6. They will be able to help you ensure that your company remains as profitable as it can be by focusing strictly on your cash flow and optimizing it.
7. They will be able to help effectively position your company in the best possible way so it is able to become more valuable whenever you intend on selling it in the future.
I’m looking forward to seeing what you think about hiring a Chief Financial Officer for your business.