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Five Challenges Signaling the Need for an Outsourced CFO


When It’s Time to Get Some Financial Help

We talked last month about the traditional functions of a Chief Financial Officer (CFO); namely, tracking revenue, profit, and cash flow, analyzing financial strengths and weaknesses, and proposing corrective actions. These functions allow the CEO to better understand how to increase revenue, decrease costs, and become more profitable overall. It allows them to understand the financial health of the business and how their actions make an impact – either positively or negatively. But what does this really mean for businesses? 

Typically, if a business does not have someone acting in the CFO role, it faces several challenges. These challenges are no one’s “fault,” per se. They arise because the business is growing, and that growth demands different financial resources. Simply, the owner can no longer afford (pun intended) for the business to operate as a small business. It needs more. 

In the past, most businesses in this situation would bring on a full-time CFO. But, with changing times comes changing resources. Today, more businesses are opting to leave the large salary expense of a CFO in the past, but still get the financial expertise needed. Essentially, they are outsourcing the finance function of their business to a third-party who acts in the same capacity, less the huge salary. But even when business owners understand the need for help, they are often uncertain about the timing. To that end, we’ve compiled five typical challenges business owners face that indicate it’s time to outsource a CFO: 

  1. Business does not exist without the owner.
    In the early stages of many businesses, the owner typically wears all the hats, rendering the business completely reliant on that individual. There is little doubt that the business would not exist without that person. In some situations, it’s necessary, but more often than not, it lasts longer than it should. And no one is good at everything. Owners think they have to do it all themselves to reduce costs, but little time to work outside of the day-to-day activities is actually creating the problem, not solving it.
  1. Constant catch-22.
    This may sound familiar – “We need more money to grow the business, but we need to grow the business for more money.” However, the solution is not necessarily in growing the business, but in having a better overall understanding of where the highest profits can be found and how to reduce costs. And this understanding often only comes with a CFO’s financial expertise and vast experience.
  1. Owner isn’t sure what’s working and what isn’t.
    Let’s face it – balance sheets and P&Ls are for the numbers people, not necessarily the business owners. In fact, many owners are easily confused by them because they think they are difficult to understand and that they don’t tell the whole story. But the truth is, they are missing the story that can only be found in those numbers and in between the lines—where a CFO thrives. 
  1. No clear goals.
    Not enough business owners have metrics in place to measure their progress, especially as it pertains to financials. They think that getting more clients and more sales are the only keys, but they’re mistaken. They need clear targets for revenue, profit, and expenses to truly understand how the business is doing.
  1. No clear direction.
    In business, and in life, we need a destination to know where we’re going. For the business owner, their time is constantly being divided, attention pulled in what feels like a million different directions. But only very little of what is demanding their attention will truly make a difference to the bottom line. Without a planned destination, the business and the owner lack direction, stifling growth.

These challenges, along with others, indicate that it’s time for the business owner to get some financial help. Specifically, they need someone who understands the entire business and can help them improve it, starting with the basics … the numbers.

With an outsourced CFO, you will have a ‘go-to’ financial guide, so that you don’t have to face these challenges alone. And by outsourcing, not only will you save money, but you will gain access to a financial expert with the flexibility to utilize that expertise only as needed. The relationship can even start part-time or be project based and grow from there, getting you back to the business of your business.

At Agile Planners, we provide strategic guidance and outsourced CFO services to companies of all sizes. We can help provide the strategy your organization needs for the growth you want. We understand that no two organizations are the same. And with our experience and financial knowledge, we can help develop the right strategic plan for your business to grow and reach its goals. Simply, we’ll be your trusted partner, so you can focus on running your organization. Contact us today to learn more about how we can help.

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