Bringing the Power of a Chief Financial Officer to the Small Guy: Interim CFO Services

Perhaps you have heard the term “interim CFO services” and wondered what it is all about. Here’s the deal: while an interim Chief Financial Officer is often used by large companies while they are in the process of looking for a more permanent position, they can also be used by smaller businesses to give them a bit of a “power boost” and make their business more viable for the long term. And while most small businesses cannot dream of affording the expertise of a full-time CFO, there is no reason for them to not take advantage of the wealth of knowledge and expertise a financial officer brings to the table. Here’s how.

Financial Savvy

Do you know how much product you need to sell each month in order to make your business profitable? Do you have any idea how much available on the 14th of next month when you need to purchase materials to complete that big job? Or, do you find yourself running from one crisis to the next, suddenly digging for money to purchase supplies, chewing the end of the pencil as you try to figure out how much your projected monthly expenses are, and scratching your head behind a desk instead of being productive at what you do best? The top frustration for many small business owners, or CEOs, is that they find themselves tied more and more to paperwork and crunching numbers when they know they are needed to make their business succeed. Unfortunately many fantastic ideas and hardworking idea generators fail because they either did not know how to make financial projections and leverage assets to get credit at the right time, or they did not have the time and energy to focus on the most important aspects of business.

This is the kind of financial savvy a chief financial officer can bring to a business. They can help businesses:

  • Create profitability analysis

  • Know how much sales need to come in per week or month

  • Evaluate ways to increase profitability

  • Project cash flow

  • Prepare and modify business plans

  • Provide financial forecasts

  • Leverage credit at critical times

Ah, you say, that all sounds great, but that kind of financial savvy is for the big guys! This is where interim CFO services come in for the smaller business. Usually hired on a contract basis, the interim CFO works the number of hours that the business can afford or needs while providing the financial edge otherwise out of reach.

When it Counts

Many financial advisors recommend waiting until a company reaches the $10 million mark before hiring a CFO. While this makes sense if you are going to be paying a six digit salary, it may mean disaster for the smaller business that has a great idea, a fantastic product, or excellent service, and just needs a boost to ensure they make it through the critical growing stages. While many small businesses think nothing of going out of house to find someone to manage their books, do payroll, and prepare taxes, they do not often consider they can follow a similar pattern to receive the financial advice they sorely need. Interim CFO services provide so much more than the basic bookkeeping functions: they often serve as a lifeline for that struggling business owner who is being strangled by the financial planning aspect of his business. Rather than waiting until they reach some magical number, or are at the tipping point of losing their business, many smart business owners are turning to the power or interim CFO services to give their business the cutting edge they so desperately need.