By Neil King
Does it make sense to hire a CFO for your business? We look at the pros and cons
Why would I need a CFO?
First of all, you might not need one. Not every company does. Maybe you can handle the finances yourself, or maybe your business isn’t particularly dynamic. It might be easier to hire a freelance accountant now and again. However, as your business grows you might not be able to take care of things yourself, and it may be more cost-effective to bring in somebody on a full-time basis. Basically, the larger or more complex the finances become, the more likely it is you’ll need a CFO who can organise everything, interpret results, control costs, devise strategy, and secure funding.
Can I expect them to play other roles?
Start-ups and SMEs need employees to be multi-skilled as much as possible, but don’t forget you’re bringing this person in for a specific reason. And if you need to bring them in at all, it means the job is a big one, so it might not be realistic to expect more from them. Having said that, you can expect your CFO to be hands-on and a leader. Many people joining an SME will like the challenge of doing more than they are expected to do – they may have other skills they’d like to exhibit, so make the most of it!
Does it mean setting up a new department?
In the long-term, possibly. In the short term, your SME probably won’t have departments as such – everybody will need to work together. If you’re thinking of hiring a CFO at all, it means that side of the business needs close attention, which probably means a fianance department will develop as the business grows. Your newly-installed CFO will be able to express his or her needs moving forward, but it may be prudent – and a mark of intent – to plan for a new department in due course.
How should my business look a year after employing a CFO?
First and foremost, everything to do with finances should be in good order. You can also expect to have developed your business based on the strategic advice your CFO should be able to bring. They may be able to suggest new structures for the company, different business models, and so on. Ultimately, you can expect your business to look and feel more professional, more efficient, and better placed for future growth. But be warned, if hiring a CFO has not enhanced your business, you need to seriously consider whether it was the right move. Is their salary too draining? Is their work up to scratch? Does their personality mix well with yours? Does your company need to return to being small, with you alone at its head? You need to ask these questions regularly and answer them honestly.