As a business owner, you might be at the point of looking into a CFO and have come across the term Fractional CFO.
So, what exactly does that mean? Simply, it is just an outsourced CFO. Someone you hire who has CFO experience and who helps lots of businesses with their financial needs on a part-time basis.
What Does a CFO Do?
A CFO (Chief Financial Officer) is responsible for monitoring your business’s finances. They can also tell you what changes need to be made. They can also see opportunities that are being missed or products or services that should be cut.
Benefits of a Fractional CFO
Why would someone want to hire a part-time CFO? Mostly, it is due to budget constraints. Having a full-time CFO on staff is costly. If your business isn’t at the point of being able to afford a CFO full-time, outsourcing it is a great alternative! Having that expertise for less and hiring a specific person for unique tasks are two of the biggest benefits to a Fractional CFO. If you’ve got a project coming up that is unique, you can hire someone with those skills and get the right person for the job.
What is the Cost?
Outsourced CFOs get paid per hour, but usually, you sign a contract for a specific period of time. Typically it is at least 6 months. The cost can be anywhere from $3,000 to $10,000 per month. If your company is preparing for a high level of growth or a large transaction, the CFO will pay for themselves in the advice they give you for these large changes. You should see measurable ROI from your partnership and if no, you’ve hired the wrong person.
If your business is getting ready to make some strategic changes, you should consider hiring a fractional CFO. Their expertise and analysis of the situation will become invaluable to your growth.