10 Reasons to Hire an Outsourced CFO

If you are the owner of a small to medium sized business, you have likely been faced with the reality that your financials are critical to your success as a business. Like millions of small businesses in the U.S., you and your leadership team have likely spent countless hours tracking, compiling, and reviewing financial data, only to come to the conclusion that impacting your future growth and bottom line is a daunting task that is going to take more than rigorous bookkeeping to get there. If this situation sounds familiar, it’s time to consider the services of an outsourced CFO.

Why growing businesses can benefit from an outsourced CFO

1. Get Professional Expertise at a Fraction of the Cost

Every business that has gone through a period of expansion has felt the need for fiscal clarity, but small businesses traditionally do not always have access to corporate-level CFO strategy. With an outsourced CFO, even small businesses can gain access to the financial advice needed to experience transformational business growth and succeed faster than they would otherwise. Hiring a CFO internally comes with a C-level price tag, while outsourcing a chief financial officer (or CFO team!) costs a fraction of the price.

2. Improved Financial Planning and Forecasting

The primary duty of a strategic outsourced CFO is to provide informed recommendations for achieving short-term and long-term financial goals, derived from the owner’s ‘why’. The CFO sets reasonable expectations for future results and helps the leadership team to develop attainable goals for the company’s sales and operations teams.

What are outsourced CFO services?

Outsourced CFO’s focus on growing your gross margin and profitability, resolving financial challenges within your business, and assisting owners in planning for their business’ growth. Services can include: historical financial reviews, projections, identification of key metrics, strategic planning, and program monitoring.

3. Prepare for Multiple Outcomes

A good outsourced CFO focuses on helping owners achieve balance within their company: planning for growth of the business while also considering potential downturns in the market and creating safeguards where necessary. A good CFO well help you to prepare your business, not just for Plan A, but for Plans B and C, too.

The YOCFO team has developed a free guide to help business owners better understand the thought process our CFOs have taken when considering the potential for disruptions and how we develop actionable strategies.

4. An Objective Financial and Strategic Partner

Unlike business partners, a strategic CFO is a completely objective party that can inform decisions based on what is best for the sake of the business, regardless of internal debates and conflicting partner perspectives. This objectivity is critical in any business, especially a small business, where every competitive advantage, or lack thereof can mean success or failure.

5. Multi-Industry Experience

An outsourced CFO’s expertise comes from having worked with many different companies from a variety of different industries. As a business owner—regardless of the number of years you have been in business or the breadth of experience of your staff—you can benefit from seasoned, expert-level guidance, acquired by years of business strategy in a variety of industries.

6. Create Financial Clarity

One of the first things you will realize after hiring an outsourced CFO is that your business will be able to achieve complete financial clarity. The CFO will take the lead on developing clear and concise financial documents, removing the uncertainties that you may be faced with when making critical and actionable decisions for the business. Additionally, you can ensure your financials are accurate, while also having a CFO who can assist you in deciphering documents and developing these strategies to grow your business. If you have a bookkeeper or accountant on staff, the outsourced CFO will work with this partner to review the financial health of your company.

7. Reach Your Professional and Personal Financial Goals

Your Outsourced CFO makes sure your business objectives both map to and reflect your personal financial goals.

Recently YOCFO worked with the owner of an ecommerce business whose goal was to net $5 million for the sale of his business. After several years of engagement, it became clear that it would necessitate bringing the manufacturing component in house to achieve this goal. Considering the pricing model was inelastic and it was a premium-priced product, it would be unrealistic to raise his prices any further. Additionally, his gross profit was out of line with what buyers in the industry would typically look for in a business meaning that the best approach would be bringing in the manufacturing- and it worked!

8. Manage Your Company’s Growth

When you are planning for growth, the strategic outsourced CFO will be there to provide professional expertise as to the investments you should be making, whether they be people to hire, technology to implement, or machines to buy. An outsourced CFO has worked with many different businesses; therefore, they will be able to provide guidance with business decisions based on your financial capabilities and then weigh the cost-benefit that these decisions may realize for your business’ long-term growth.

9. Plan for a Future Merger, Acquisition, or Expansion

Not only can a strategic outsourced CFO help you plan for growth and financial stability, but also walk you through the process of a merger, acquisition, or business exit. These critical phases of your business plan should be overseen by the expertise of a strategic outsourced CFO. Without a plan and the consultation of a professional, your company runs the risk of missing major opportunities to merge, acquire, or expand. Your CFO partner will guide you through the process and help you determine the best plan for your business from a financial perspective.

10. Create Alignment at the Top of the Organization

Financial clarity is often overlooked within a small business, making it difficult for owners and leaders to make informed decisions for the betterment of their business. As an embedded strategic partner Your Outsourced CFO becomes a critical resource across all levels of an organization so that finance, revenue generation, growth, and profitability are maximized.

About Your Outsourced CFO

As the economy is shifting to a more entrepreneurial and technological environment, allowing small and medium sized businesses the opportunity to compete with large corporations. These businesses need expert-level financial guidance in order to grow their business and compete with other organizations. Your Outsourced CFO was founded with the intention of strategically supporting these small and medium sized businesses by developing actionable strategies for growth guided by financial expertise. Learn more about YOCFO and how we can support your business.