When Should a Small Business Hire a CFO Maureen Oâ€™ Connell Executive VP, CFO and CAO Scholastic Corporation Sept 8th, 2014 Note: The views expressed here are my own.
When Should You Hire A CFO ď‚™ If you are the owner of a small business, you may have wondered if the time is ripe to hire a Chief Financial Officer to take the burden of financial planning and forecasting off your shoulders. While there is no universal answer to this question, these 5 indicators may help you decide.
1. When your Workforce is large When there is a decent-sized employee strength that is expected to continue expanding This refers to any size that is getting overwhelming for you to handle on your own. As a rule of thumb, an organization having over 30 full-time employees needs a CFO. Payrolls, taxation and revenue duties may be offloaded to him/her.
2) When your Business is growing rapidly ď‚™ If your Business is growing at the rate of over 25% per year, you need promptness in organizing finances, analyzing performance and keeping investors updated. ď‚™ A CFO can help you respond quickly to the transforming financial landscape.
3) When You Deal With Big Data Big data essentially refers to data that is too large – in terms of quantity, variety, complexity or speed – for traditional processing and that commands newer methods of processing. A CFO is equipped to analyze and interpret big data and offer recommendations regarding capital, cost, taxation, etc. so you may make informed decisions
4) When Your Business is Getting Complex ď‚™ As long as you offer one product or service from a single site to local customers, your finances could be easy to manage. ď‚™ But when you offer dozens of products or services to a global audience, your operations become more complex and require the services of a CFO to help you navigate.
5) When You Are Looking at a Merger or Acquisition CFO’s team can accurately target a potential acquisition and interpret reports issued by the regulatory due diligence team. Not only must he/she balance savings with investment to boost profitability but also manage financial, regulatory and environmental risks.
Finally… If the thought of hiring a full-time CFO, charging a formidable pay package, causes you discomfort, consider hiring a part-time one. A “consulting CFO” could meet with you a couple of times a week and help you manage your finances. Once you have established a level of comfort and trust, your transactions get more complex and his visits increase, you could consider hiring him full-time.
Maureen O'Connell Maureen Oâ€™Connell is the current Executive VP, CFO and CAO of Scholastic Corporation. When not working, Maureen loves running, Skiing, Scuba Diving or Travelling.