How Does An Outsourced CFO Fit Into A High-Growth Startup Business?
Posted on: 26 October 2021Share
One of the most common scenarios for hiring an on-call outsourced CFO is when you're running a startup in high-growth mode. The team at a company of this type often has core skills outside of finance, reporting, and securities. Consequently, they need someone to provide support on that front while the team focuses on generating growth within the company's core competencies.
How will this on-call CFO fit into your organization, though? Let's explore four of the functions of an outsourced CFO who's helping a high-growth firm.
Adapting to Reporting Requirements
Taking a business on a rocket ride to the financial moon can be exciting. However, it also means you may quickly move through several layers of the regulatory atmosphere. A business producing high growth can go from a sole property with zero reporting requirements to one on the government's radar rapidly. One month you might be able to throw personal money at a problem, and the next month you may have to report every penny.
An on-call outsourced CFO can monitor your firm's finances to see if it's approaching certain thresholds. They can prepare you for corporate and regulatory changes before the new rules hit.
Filling Out a Pitch Deck
Most high-growth businesses seek some form of outside funding. Regardless of how you're looking for investments, people will want to see balance sheets and projections. Your pitch deck needs to include an understanding of what your money situation looks like now and going forward. An on-call CFO can prepare this information and even provide clarification if an investor has any questions on the spot.
People get very invested in their ideas during a company's growth phase. That's awesome, and your confidence and excitement can be your edges in many aspects of the business.
However, that enthusiasm may cloud your independence in assessing the company's finances. It's good to have a professional look at your numbers and tell you what other professionals are going to think when they see them. This can insulate you from shocks by guarding against needless expenditures and keeping you on your toes about the company's burn-through rate.
As the business grows, you'll need access to financing. If you need loans to purchase equipment, for example, you may need to use equity as an asset for collateral. The on-call CFO will help you to prepare your numbers so financial institutions can understand your business and its long-term value.
For more information on an on-call outsourced CFO, contact a professional near you.