Small Business CFO Services: A Guide for SMB Founders

Written by Amanda Bower    |    Published: February 7, 2023

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There’s nothing “small” about running a small business. If you’re at the helm of one of the 33+ million small businesses in the United States today, you know exactly what we’re talking about. 

Every small business has endless challenges to navigate, hurdles to overcome, and goals to accomplish. But no matter your industry or location, there’s one thing every single small business owner has to get right: the financial aspects.

Let’s face it: most small business owners and founders are not accountants (unless they’re running an accounting business). Many small businesses end up in sticky situations regarding cash management, financial projections, acquisitions advisory, and investment expertise. Even if you have someone handling basic financial needs (like taxes and payroll), many small businesses need more in-depth guidance, advice, and expertise.

So, what’s the solution? Finding a small business chief financial officer or CFO.

CFOs aren’t only for huge businesses, and small business CFO services are more common than you might think. Plus, in today’s digital-first workforce, it’s incredibly easy to have an expert CFO at your service in no time who works on a schedule that works for you. With that in mind, here’s everything you need to know about small business CFO services. 

What Does a CFO Do in a Small Business?

What exactly does a CFO do in a small business, and why might you be interested in small business CFO services? A small business CFO is a type of outsourced CFO, where one works with your small business to achieve your financial and business goals on a contract basis. 

This method of employing an outsourced CFO is typically much more cost effective than hiring one full-time. This financial expert partners with your small business to ensure your finances aren’t only “up to snuff” but that you’re also getting the elite economic guidance your business needs.

For example, a CFO in a small business might help you navigate and shore up cash management, execute critical financial projections, and offer expert advisory during acquisitions. That’s not all: CFOs can also help your small business by providing investment and financing expertise and can assist with financial turnaround. Aside from this, CFOs can assist with forecasting, financial system strategy and design, budgeting, financial reporting, and raising capital, among other things.

When it comes to small businesses, it’s common for founders and leaders to tackle many things independently. From repairing the fridge to rearranging the schedule, small business owners are used to jumping in on all tasks. 

But when it comes to complex financial matters, these are best left up to the experts. A CFO can provide your small business with the advanced financial guidance it needs to achieve its goals and take things to the next level. 

How Big Should My Business Be Before I Invest in CFO Services?

When is the right time to hire a CFO, and how big should your business be before investing in small business CFO services? It’s important to remember that this answer looks different for every small business and depends on where your business is today and your goals.

For many small businesses, it might be the case that you’re large or complex enough to consider hiring a CFO right from the start. Your CFO partner can be a part of your business from its earliest stages, ensuring you make the right financial decisions from the get-go. 

Many small businesses wait until they’re experiencing significant growth or a certain milestone to hire an outsourced CFO. This is when needs like cash management, investment expertise, and acquisitions advice might be relevant. 

Rather than turning to small business CFO services when your business hits a certain size, you can look at your needs and if a CFO can meet them.

How CFO Services Can Help Your Small Business

Small business CFO services can be extremely beneficial in several different ways. Here are some of the main benefits. 

Establishing KPIs

Small business CFO services can help your business establish KPIs, or key performance indicators, which is how performance is measured over a certain period of time. Your new CFO can help you establish financial KPIs, which reveal critical financial information about your organization. You’ll be able to measure success and progress clearly, and spot places for improvement. 

Reporting Accuracy

As every small business owner knows, many aspects of financial reporting are vital, and it can be tough to manage them without an expert. Your new small business CFO will keep a close eye on the accuracy of monthly financial reports, annual budgeting, financial statement analysis, and financial planning and analysis. And you can rest easy knowing that these reports are accurate every time. 

Reducing Overall Risk

Running a small business means living in a world where financial risk is rampant. From new feature launches to investment opportunities, financial risk isn’t always bad, as it can lead to further growth. But your new small business CFO will help you reduce overall risk and make the best decisions. 

CFO Consulting Hourly Rates

One of the biggest benefits of using small business CFO services is that you get all of the skills and experience of a CFO at a fraction of the cost of an in-house hire. Here is what you can expect when it comes to CFO consulting hourly rates and the different types of small business CFO services you might encounter. 

Part-Time CFO Salary

While salaries can range, various sources show that the typical cost for a part-time CFO is about $300 an hour.

Fractional CFO Hourly Rate

While salaries can range, various sources show that the typical cost for a fractional CFO can range from $175 and $350 an hour. 

Virtual CFO Rates

While salaries can range, various sources show that the typical cost for a virtual CFO can range from $175 and $300 an hour. 

As we mentioned, CFO consulting rates tend to be far lower than the cost of a full-time in-house CFO. Hiring a full-time CFO can cost businesses between $300,000 and $400,000 annually.

Evaluating CFO Consulting Services

Not all small business CFO services are created equal, and before you choose which firm to partner with, you should take steps to evaluate your top contenders. With that in mind, here are some factors you can use to assess CFO consulting services.

Education 

What educational background does your CFO consulting service bring to the table? Do they have an educational background in small business finances, or are they simply in the business of placing candidates in organizations? 

Expertise in Your Vertical

Different industries require different financial expertise. Partnering with a CFO consulting service with experience and knowledge in your precise vertical is essential. 

Professional Network

Your new CFO shouldn’t work in a silo; instead, they should have a robust professional network and resources. That means they have access to other skilled professionals and are trusted by others in the industry.

Personality and Communication Skills

When you partner with a CFO consulting service, you want someone with the personality and overall communication skills to come into your organization and be at home. They should be able to seamlessly integrate socially into your organization and communicate in a way that encourages collaboration.  

References

Stuck on choosing a CFO consulting service? Check their references. Word-of-mouth is an excellent way to land on a CFO consulting service and gauge how one really delivers. 

Agreement Structure

Different CFO consulting services use varying agreement structures. This involves different onboarding, fees, bills, and service agreements. Be sure you fully understand your CFO consulting service’s agreement structure and that it meets your business needs. 

Outsourced CFO Services Help Small Businesses Grow and Thrive 

Running a small business and taking it to new heights is challenging enough, and small business owners deserve to have financial experts in their corner. Outsourced CFO services are specifically designed to help small businesses with advanced financial expertise in their vertical, helping founders and leaders take their businesses to new heights.

How do we know so much about outsourced CFO services for startups? Here at hiline, we’re (incredibly) passionate about providing small businesses with their dream CFO. 

To learn more, book a call with Hiline advisor today.

 

Further Reading

CFO Resources for Small Business Owners
CFO Resources for Startups
Outsourced vs Fractional vs CFO: Understanding the Difference

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