High-growth companies are burdened with high-growth decisions. Unfortunately most startups or companies with rapid growth spikes lack the funding necessary to hire the right help during a time when it is critically needed. This could include business development, sales, bookkeeping, employee management and even the assistance of at least a part-time CFO (chief financial officer). When companies reach the growth inflection point that begs for the assistance of a seasoned professional, there is often a disconnect between what is needed and what the company can rightly afford. Having the right C-level executive to work with you on critical growth and financing initiatives is paramount to your company’s ultimate success.
Many small, growth oriented businesses are heavily focused on growth and sales, to the exclusion of nearly everything else in the business–including the finances. But, as your company grows, the need for an experienced and knowledgeable professional will also increase. This is especially true for companies that may shortly require debt or equity financing to help take their business to the next level.
Here are some critical components that an outsourced or virtual CFO can assist with as your company moves from point A to point B:
Unfortunately, hiring a CFO at the beginning stages of a business is not a good fit. When the company has not yet completely established its appropriate direction it can be premature to hire a CFO to help steer the ship, especially if the founders are still it test and pivot stage of a highly-scalable product. In this same vein, a full-time CFO may not be on the same page as the founders of the company when it comes to the direction of the business. It may take months of executive searching to find the right fit. In addition, most truly-seasoned CFOs are not willing to take the inherent risks associated with joining and running a startup or high-growth company.
Here are a few of the reasons having a seasoned C-level financial executive on a part-time basis join your firm is the right strategy.
Hiring a part-time, virtual CFO is much less expensive and ultimately much less risky than taking a gamble on the wrong full-time candidate. A virtual employee does not require a full-time salary, will not need to negotiate stock-options and will typically provide a huge, experienced boon to the company as it grows. While there are always pros and cons to between either hiring a full-time employee and an virtual, interim employee, most growing companies opt for the latter for at least some of the reasons discussed above.