When startups should or shouldn’t hire a CFO
When you have a startup, it can be hard to know if you should invest in extra help with your finances in the form of a CFO or a Virtual Controller. Perhaps you feel it might be a waste of your resources — especially at first. However, you may also be thinking that bringing in someone to watch over your finances early on can get you off to your best start. So, should you go ahead and hire one? Here are some questions you need to ask yourself to help you decide.
Do I have the knowledge to handle my own finances?
If you don’t know much about finance nor have any experience with doing even simple bookkeeping, it’s essential to have someone else looking out for your finances and who can keep you up to date on your whole financial picture. Handing it all off to your accountant only at tax time will likely create confusion for all parties and cost you a lot to get it sorted.
Am I having trouble figuring out where my cash goes?
If you spend too much time reconciling your books at the end of the month and have trouble figuring out which numbers go where then it’s likely worth the cost of hiring someone to save yourself the time and frustration. Again, even if you manage to get those numbers all into place every month, unless you have CFO experience, you’re likely missing something within your entire financial projection.
Can I answer questions about my finances?
If you have potential investors or people who may want to fund your startup, you need to prepare yourself to answer tough questions about your finances. After all, they want to know if you’re a safe bet or not. If you’re unable to answer all their questions or can’t speak confidently about your finances, they may not see your business as a good investment and move on. Having someone who shows that you’re in total control of your finances will instill confidence in investors.
Do I have the funds to hire a CFO?
Going all-in on a startup is expensive. And even if you have investors or received funds, chances are you’re using every penny towards getting your business off the ground. So, you may feel like you don’t have any money to hire a CFO.
However, you know that old saying “You have to spend money to make money”? That could come into play in your situation. If you hire a CFO who has experience with startups and knows what to do, you’ll be put onto a financial path that will get you more investors and expand your finances — which will more than make up for what their salary will cost you.
Have I considered a virtual CFO?
Here at Virtual CFO, we can help you with virtual controller services to get your startup on the right track. And if money truly is tight, don’t forget we offer part-time and fractional CFO services. Contact us today for more details.