How Does a Fractional CFO Help Your Small Business?
Fractional CFO’s have become increasingly important to most small businesses. Almost all businesses...
When I talk to business owners about Chief Financial Services (CFO), it is common for them to ask me how much CFOs cost? The answer is that it depends.
Usually these services require a deeper understanding of the current financials and level of service needed. Before going into this, consider the different hiring options.
Traditionally when a company was large enough and could afford it, they would hire a full-time CFO. There are benefits to hiring a full-time CFO, but there are quite a few other things to consider. If you are looking to go public or are a large, complicated business with many divisions and layers of management a full-time CFO may be the way to go. Some companies, over $20 to 30 million in revenue, may want to consider this alternative, especially if they are growing quickly.
If you hire a full-time CFO, you must consider the following:
Considering these costs, hiring a full-time CFO could get to the point of costing $250,000 - $400,000 per year, which for some businesses is not an option.
When you decide to hire a fractional CFO, you should expect a high level of work at a fraction of the cost of a full-time CFO.
A fractional CFO’s pricing structure is based on the client's level of service, size, and number of entities. For example, our firm has clients that range from $1,500 to $6,000 per month. At those rates, you can quickly see how $18,000 - $72,000 annually is so much less than the cost of a full-time CFO. You couldn't even hire a Controller for anything less than $120,000 - $150,000 with fully loaded costs.
Here are some other benefits of a fractional CFO:
Like with any hiring, there are particulars that you need to look out for when searching for a fractional CFO.
You can decrease the risks of hiring a fractional CFO firm by doing the following:
Any company over $1 million should have a CFO, even a smaller start-up or fast-growing business should use a CFO. You have many options, but don’t procrastinate because a good CFO provides benefits far outweighing the costs.
Fractional CFO’s have become increasingly important to most small businesses. Almost all businesses...
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