"I know I need financial help, but is it really time for a CFO?" - I hear this from small business owners all the time and recently had a great chat with two prospective clients where we dug into if it was time for a CFO.

In my opinion, all businesses need CFO-level thinking, but not every business needs a full-time CFO or even a fractional CFO. In this post, I break down exactly when, why, and how to get the financial leadership your business needs.

What Does a CFO Actually Do for Small Businesses?

CFOs aren't just expensive accountants/bookkeepers/CPAs. While your bookkeeper tracks what happened and your CPA handles taxes, a CFO helps you:

Make strategic financial decisions
Optimizes cash flow
Increase your margins
Builds sustainable profits
Plans for growth
Partners with you to reach your goals

A very common theme I hear is: “I have a CPA and a bookkeeper, but they don’t do a good job providing strategic support and they can’t forecast.” Usually these clients are very frustrated thinking they are overpaying, but the reality is a CFO is a different role and is going to provide a different type of support. Chances are your bookkeeper and CPA are doing a fine job at what they do best (but if they’re not, then reach out because we know the right people for those jobs).

Signs It's Time to Consider CFO Services for Your Small Business

You might be ready for CFO support if you're experiencing any of these situations:

1. Your Revenue Is Growing But Profit Isn't

2. You're Making Big Decisions Without Financial Strategy

3. Your Financial Systems and support aren’t aimed towards your long term goals.

I met a woman at a conference a few years ago. She had a thriving business, a little while later, her factory burnt down and her insurance didn’t cover the damage. I offered to provide her with insight into what she could do with her business strategically to recover. She waited 8 months before taking me up on this free offer and by that point she was on the verge of bankruptcy. Had she taken advantage of this free offer prior, she might have been able to get back on track before basically going bankrupt.

Why Fractional CFO Services Make Sense for Small Businesses

In my opinion most businesses don’t need a full-time CFO until they’ve reached the $20M milestone and even then there are plenty of businesses that could still use an outsourced service provider and be in great shape (and save money). What often happens is a business promotes a bookkeeper to controller to CFO and they aren’t trained in long-term strategy, but hey they’re making good money and doing just fine. And of course there’s always an exception where smaller businesses can benefit from a full time CFO or financial strategies much earlier and there are fractional CFO’s that support well above the $20M range.

But if you’re NOT making $20M in revenue, then a fractional CFO is a great fit to get that forward looking strategy support and deep analysis needed to make decisions. Think of it like having a financial GPS for your business without paying for a full-time driver. Finance Fight Club is specifically built to be a module approach to CFO so you can get the insight you need when you need it without long-term commitment. And we can work with businesses at any size.

Benefits include:

- Expert financial strategy without the full-time salary

- Objective outside perspective

- Access to high-level expertise

- Flexible support as you grow

One of my clients this past year had a full-time CFO who they let go. When I onboarded, I realized the CFO wasn’t doing CFO level work. Instead he was acting as senior accounting controller doing very basic forecasting. It was a challenge to retrain leadership to the support they were now paying for and required hiring some other support to get the bookkeeping gap taken care of. My suggestion? Determine who is doing what before you go down the path of hiring a fractional CFO and then bring that list when you’re chatting with fractional CFOs.

The Impact of CFO Leadership on Business Health

Let me share some real numbers I've seen with my clients:

Typical improvements after implementing CFO guidance for 6-12 months:

- 249% increase in net income

- Less surprises because of better cash flow management

- Clear understanding of business performance because of clear, simple KPIs tied to long-term goals

When to Choose Different Types of CFO Support

**Finance Fight Club Membership**

Needs ongoing accountability to review financials
Wants the support of a CFO with key decisions, but only needs 1-2 questions answered per quarter
Wants a community of other business owners to ask questions to
Has recurring revenue between $100K-$3M annual, but a simple enough business model to not need to talk to someone once a month

**Outsourced CFO Services:**

Perfect for businesses that:

- Need regular strategic guidance to reach a long-term goal or correct cash flow issues

- Want monthly financial review and strategy sessions with a CFO

- Are making significant decisions

- Revenue: $1M-$5M

**Project-Based CFO Work:**

Ideal when you're:

- Raising capital or seeking bank financing

- Making major purchases

- Implementing new systems

- Need specific expertise

**Full-Time CFO:**

Consider when you:

- Have complex financial needs

- Revenue exceeds $20M ( give or take, but this is a good number to assess if it’s time for a full-time CFO and staffed finance team)

- Need daily financial leadership

- Have multiple entities

The Real Cost of Not Having CFO Support

Here's what I often see happen without proper financial leadership:

- Missed growth opportunities

- Cash flow crises

- Poor investment decisions

- Unnecessary expenses

- Tax surprises

One of our clients came to us still paying off a $20K tax bill from the prior year. We worked with her to pay off the Tax debt as soon as possible and build cash reserves to prevent a similar event happening the following year. During this time we also: increased her personal income and optimized her business expenses.

How to Get Started with CFO Services

Ready to explore CFO support? Start here:

1. Assess Your Needs

- Review current financial challenges

- Identify growth goals

- List specific questions/concerns

2. Choose Your Service Level

- Monthly support

- Project-based help

- Advisory services

3. Set Clear Expectations

- Define success metrics

- Establish communication patterns

- Create accountability structure

The Jist:

Every business needs financial leadership to support long-term strategy - the question is just what type and when. Not every type of support is the right fit for your business.

Back to the recent prospective client calls I had, in both I laid out that the best time to work with us is when:

You have a specific goal in mind. Here are a few:

You're planning to sell the business in the next 2+ years
You want to optimize for your owner compensation
You are scaling rapidly and want guidance on next steps
You recently purchased a business and don’t know where to start investing in growth

You need a specific thing analyzed to make decisions

You’re looking to raise price, but aren’t sure here
You want to acquire a business and want to avoid a mistake
You want an understanding of your current business health so you can start to frame up a long term strategy

You have the cash flow to support CFO support

The great thing about Finance Fight Club is that you can get CFO questions answered in our calls and in emails for just $175/month
Our 1:1 CFO monthly support starts at $3000/ month so be sure you have the cash to cover this before you start. And if you can’t commit then start with a project and we’ll go from there - we can even budget our services in so you know exactly when you can afford them.

Ready to explore what CFO support could look like for your business? Let's chat about how Finance Fight Club can help you build the financial leadership your business needs.

Effective Financial Leadership: When to Hire a CFO for Your Small Business