To state the obvious … a business manager or CEO’s job is to make the best decisions for the business. If you’re in the hot-seat, are there too many times you rely on intuition and gut-feel?
That’s fine in most cases, but what about when you need greater certainty in the financial outcome?
Let’s say you have to make decisions like:
- Would a new salesperson help us sell more but will the extra profit cover the costs?
- Should we take on that new piece of equipment? What is the cost recovery rate?
- Is my calculator estimate close to the real figure?
- What if I reduced the cost of goods sold, or the inventory, or collected the debts quicker by 7 days, how much extra cash in the bank would that give me?
Let’s say you have a submission to the bank or lender and you need, not just a professional presentation and accurate numbers, but a cost v. benefit or return on investment (ROI) analysis. Plus you would be smart to know the ratios that bankers use to justify your loan to their bosses.
Your internal bookkeeper or accountant may give you monthly totals, keep your invoices going out and provide profit and loss accounts, but can they help you make the BIG business building decisions?
A good Virtual CFO is right-hand to the boss but on the numbers side. Someone who has worked for bigger corporations, sometimes listed companies. Someone who has been head of finance, skilled in business numbers and knows how the numbers affect the decision making process of department managers and the CEO.
A full-time CFO (Chief Financial Officer) may cost you, with on-costs, say $150k to $180k a year? And this is hard to justify as you don’t need another large cost factor … but a Part Time CFO … can cost just when you need them and not when you don’t!
They don’t even have to live nearby either. These days it’s easier to have a sit down meeting over Skype, than in person and it costs a great deal less in travel and out of office time.
Virtual CFOs are becoming more the norm for small/medium businesses for this reason. You can hire a Virtual CFO, someone who gets to know your business, helps you when you need them and the costs could be a mere fraction of hiring someone full time.
Usually Virtual CFOs will work on a job basis of say $500 a half day, but you may prefer to work on an agreed fixed monthly fee as many of them do. Normally from $600 a month to $3000 a month.
Let’s take a medium cost of say $1600 a month. That’s a total of less than $20,000 a year and a really good Virtual CFO, should help you how to make at least 3 to 5 times their cost in greater profit or savings. Virtually a no-brainer!