Owning your own business is the heart of the American dream. Entrepreneurs not only provide inspiring solutions and products, but they fuel our nation’s economy. According to the US Small Business Administration, more than 50% of Americans either work for or own a small business. Unfortunately, 22% of new businesses fail after just one year and 50% close after five years and only a third survive the ten-year mark (Office of Advocacy)
Only 9% of business owners have formal education in business, and 26% of business owners turn to the internet for business-related advice. Also, among the biggest challenges facing small businesses is an understanding of business strategy around cash flow, growth, and managing competition. (TSheets)
In a world where you can rideshare, rent out a bedroom on the fly, rent office space, and conduct business with people virtually worldwide, part-time CFO is the way forward for many small businesses. Hiring a part-time CFO to help make objective business decisions can significantly help move the needle in the successes of start-up businesses. CFO sharing can allow even the smallest companies to have sound business advice from professionals with a passion for business.
Part-time CFOs can assist with items like financial reporting, cash flow management, performance tracking, budgeting, expense control, market guidance, and organization leadership. Part-time CFOs often have a wide range of industry experience, and education and fill the need for low overhead but high impact.
According to Toptal, the following are key reasons why hiring a part-time CFO is a great idea:
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Very few companies need 2,000 hours of a CFO each year.
Small businesses may have times where they need a day, week, or month of work from a CFO, followed by extended periods of nothing. A part-time CFO fills that need without excessive overhead.
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Should we lease or buy?
Being able to “go with the flow” and call upon a CFO when you need one will only add to your strength. Flexibility is the primary reason people lease rather than buy in everything from homes to equipment. If you don’t have a permanent need, a lease is a better option than buying – the same concept applies to a CFO.
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A fractional CFO brings diverse experience
Part-time CFOs not only have diverse experience and education, but they serve a variety of industries. Leveraging this knowledge can help your business grow in ways you had not previously considered.
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A part-time CFO will save you over-head costs
Full-time CFOs can be very expensive, at least the good ones are. By using a part-time CFO, you can get the leadership and direction you need without the significant overhead costs. The flexibility is endless.
For more perspective, The Wall Street Journal published an article with insights on the benefits of “CFO for Rent.”
