Your Startup Needs One, Too
A startup is a risky endeavor. It takes a lot of time, money, and resources to start up a business from scratch. The failure rate for startups is high. This makes the job of any CFO that much more difficult because they have an additional risk factor: giving the investor their money back, should it fail. When you’re dealing with such high stakes, it’s important to know what your options are when considering hiring an outside CFO for your startup company – especially if you need one who can work on a fractional basis!
What is a Fractional CFO? A fractional CFO provides financial expertise to the startup company on a part-time basis or as needed by the CEO (Chief Executive Officer). They provide an external set of eyes that can see all aspects of the business while maintaining the confidentiality and no conflict of interest with other stakeholders in the same industry. The cost per hour may be more than hiring a full-time employee but it’s less risky because when you need them, you only pay for their time instead of having to get into contract negotiations – which takes up valuable time too!
Another advantage of hiring a CFO is the less risk for the CEO. This is because you are hiring someone who knows what they’re doing and can help with things like financial planning, budgeting, forecasting, and cash flow analysis.
Startups can greatly benefit from having a CFO on board. They can focus on their product and not worry about the financial aspects of their company. Later, when they grow, they can switch to a more traditional CFO.