Virtual CFODo you need a virtual CFO to help you grow your business? Maybe. Chances are, having someone of this caliber on your side will make a huge difference, but is now the time?
Let's find out.
Take the Virtual CFO Quiz
1. Do you know your end result?
Do you have an end result for your business? For example, are you looking to sell it one day, or eventually pass it on to your kids? If yes, then a Virtual CFO will help you build a strategy towards that goal.
2. Do you have intensive capital management requirements?
Is your business capital intensive? In other words, do you require a lot of capital to operate? A small retail shop doesn't, but a software company or a heavy machinery company does. If so, one wrong step can be fatal to your company and a CFO should be there to help you navigate.
3. Do you have complex future scenarios?
Does the future of your business seem clear and defined, or is it more ambiguous due to regulations, potential industry changes, and more? If you face complexity, you need a Virtual CFO to help you plan for the financial impacts of each scenario.
4. Do you report to external parties?
Do external parties rely on your financial statement presentation for decision making? Investor and banker relations are crucial for future growth, and maintaining them requires someone with a strong financial background.
5. Do you have broken cash flow cycles?
Does your company go through large stints of time without constant cash flow? For example, do you experience seasonality or slow receivable turnaround? If so, a CFO can help you manage the draught.
6. Do you need extra clout?
Some businesses need the extra experience and clout on their management team in order to raise capital. Some investors won't touch a business unless there's a strong finance team in place with a capable CFO at the helm.
7. Do you do accrual accounting?
Accrual accounting is the preferred method of accounting for most professionals. It give a clearer sense of what's going on in the business and its performance. However, it takes some skill to prepare a real set of accrual books. Having a Virtual CFO oversee the process and then coach you through the reports makes a world of difference.
8. Is it time to invest?
It is possible for you to have too much cash in your company. But when is that point, and once you get there, what should you do with any additional funds? The answer is usually investments. You need to use the extra cash to grow your business through the purchase of assets that offer a positive return on investment. But what do you invest in? If you're to this point in business, a CFO will help you determine the best return on your money.
9. Do you have multiple entities?
If you're a serial entrepreneur, that means you probably have multiple entities in your life. What makes it even more complicated is the fact that those entities probably interface with each other. This creates an accounting nightmare. You'll want a good CFO to help you keep everything in order and functioning properly.
10. Are you tired of guessing?
If you're tired of being the CFO yourself and you're ready to have a professional in your corner, a Virtual CFO may be a good fit. You save by not having to hire someone full-time, and you'll have the expertise to lean on.
If your business model is clear cut, cash flow is simple and easy to manage, and you already have a plan to get what you want, a Virtual CFO may not be a good fit for you. However, if you identify with any of the 10 scenarios above, your business will prosper from having one of these experts in your corner.