Small and medium business owners are generally known to be innovators: full of ideas and bursting with enthusiasm and energy. Hard work and a lot of creative energy is what makes small startups become thriving enterprises. But, some small businesses with great potential fail before they reach their full potential, simply because they lacked the financial guidance and reporting they deserved. Here are some common characteristics of failed business owners:
They had great ideas
They worked hard
They were smart
Their financial records were in shambles.
Even having a bookkeeper may not be enough for the small to medium business, even though it seems to make the most sense financially. Bookkeepers, as a general rule, do not bring the financial expertise to the table that a CFO brings. Unfortunately, most of these businesses cannot afford to pay a salary that would draw business savvy CFOs to their company. The good news is, there is a solution: hiring part time CFOservices to fill the role of a financial officer for your company. So, how do you know when it is time to seek out part time CFO services? Here are a few guidelines to get you started.
Your Company is Growing – Growth is a fantastic thing, but it is important to keep up with that growth! As a company expands, so does its risks, its need to monitor credit opportunities, and other important financial tasks. While many small business owners depend on bookkeepers to handle their financial information, a bookkeeper is not experienced with providing financial data and advice for a growing company, they simply record data.
Critical Information is Lacking – Good business decisions are based on solid financial information. Unfortunately, many business owners are so busy running the business that important details, like regular profit and loss reports, working capital information, or cash flow projections do not get prepared. The result? Major decisions are made without adequate knowledge, a practice which can be disastrous for a business. These basic but crucial reports are one good reason to consider utilizing part time CFOservices.
Costs are Not Monitored – As a company expands and money starts to roll in, it is easy to neglect keeping costs down. After all, staff to get the work done seems more important than even part time CFO services. But here is the catch: when business picks up, there are often deeper discounts for larger quantity purchases. It is details like this, and so many more that are easy to let slip by, at a huge cost to the company.
You Need Financing – Most business owners do not realize that the greatest key to garnering the financing they need to truly make their business succeed is the reports and expertise that a financial officer can bring. Daymond John, founder of the successful clothing brand, FUBU, and founder of John Daymond Academy, which assists entrepreneurs, openly admits he lacked financing smarts. He said, "I was so busy just trying to sell stuff that I didn't have a structure to even take in capital or be able to report quarterly to people, you will be [passed] over if you don't have that, no matter how good your company is ."
So, where does your company stand? If you found yourself nodding your head as you read through this list, then it is probably time to tap into the wisdom and resources of part time CFO services, and set your company on the track for long-term success.