As a startup expands, one of the first needs is for a chief financial officer (CFO) to create financial models and predictions, create a financial plan for the company, and offer expert financial advice crucial to making crucial business choices.
The typical yearly compensation of a full-time CFO is over $350,000; as a result, startups and small businesses with limited resources choose not to hire a CFO when they need one.
Former CFO David Johnston answers your question about a part-time CFO and offers four reasons why this may be the best choice for your startup.
Four Benefits of a Part-time CFO
In many young, small businesses, the CFO’s responsibilities are assumed by an accountant or even the owner, explains David Johnston. However, even when owners are experts in their field, they frequently lack the skills or don’t appreciate dealing with money and accounting. The four main benefits of finding a part-time CFO are:
A personal advisor at your disposal
Your CFO will be present to help you make financial decisions at all times. They have a wealth of information and will be familiar with the financial details of your company.
Assistance with raising capital
Your CFO will be essential in managing your company’s finances and equity. They will support you in obtaining the funding you need to grow and guarantee that your revenue is received on schedule.
A financial data expert
Data is currently one of the most important motivating factors for a business. It is expected that a CFO with experience will be able to pair down and analyze Big Data in order to present the CEO with the most crucial information.
More time for you to do what you do best
Your CFO can manage relationships with partners, shareholders, lenders, and investors since they have an extensive understanding of everything related to financing and capital. This help will open up your calendar, giving you more time to concentrate on running your company.
FAQs About Part-Time CFOs
What kind of experience should my CFO candidate have?
Your company’s short- and long-term goals must be considered as you look for the ideal CFO. Your goals will help shape the qualifications you are looking for in your next finance leader. Your company’s short- and long-term goals must be considered as you look for the ideal CFO. Your objectives will influence the skills you want in your new finance leader.
When Should I Hire a Part-Time CFO?
There are a few significant signs that it might be time to consider a part-time CFO for your company. Some of these include:
- Periods of rapid growth
- New product development
- When you want to boost profitability
If The Right Time is Now
Each CFO has a specialty that might be a benefit to your firm, even though they all have business finance training and experience. While you might feel like the best time to tackle this business was yesterday, there are many resources in your area or virtual that can fill this critical function.
Former CFO David Johnston brings with him more than thirty years of senior financial leadership expertise. Johnston most recently held the position of Chief Financial Officer at the Waltham, Massachusetts-based biotech firm ImmunoGen, Inc., which specializes in oncology. There, he oversaw multiple public offerings and innovative, non-dilutive royalty financing. He is currently the principal of DBJ Consulting LLC, which offers rising life science enterprises financial and strategic help.
