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What does a CFO do in a small business?

woman working in a small business with a laptop

When you think of a CFO, what comes to mind? Most people might think of someone who works for a large company or a major corporation. But what about someone who works for a small business? What does a CFO do in a small business? To answer this question, let’s break down the role of the CFO in a small business and discuss some of the key functions they perform.

What does a CFO do in a small business?

In any business, the Chief Financial Officer (CFO) is responsible for overseeing all financial aspects of the company. This includes everything from preparing financial statements and budgets to managing investments and evaluating risk. However, in a small business, the CFO often takes on additional responsibilities. For example, they may be involved in setting pricing strategy or developing new products. Additionally, the CFO of a small business may also be responsible for human resources and marketing. As such, the CFO plays a vital role in ensuring the financial health of a small business.

Small business CFO responsibilities:

  • Product pricing and development
  • Human resources and hiring
  • Marketing analytics
  • Ad spend
  • Financial statements & analysis
  • Budgeting & financial planning
  • Risk evaluation
  • Raising capital
  • Negotiating loans
  • Managing relationships with lenders and investors

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What benefits does a CFO bring to a small business?

A CFO can bring a lot of benefits to a small business. They can help to set and manage the financial goals of the business, as well as provide advice on how to best use the available resources. Additionally, a CFO can help to identify cost-saving opportunities and improve cash flow. In short, a CFO can be an extremely valuable asset to any small business.

When choosing a CFO, it is important to find someone with experience in the specific industry of the business. This will ensure that they are familiar with the unique challenges and opportunities that exist in that sector. Additionally, it is important to find someone who is committed to the long-term success of the business. A CFO who is only interested in short-term gains is unlikely to be able to provide the level of support that a small business needs to thrive.

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When does a small business need a CFO?

A small business may require a CFO (chief financial officer) when it reaches a certain level of complexity and size. At this point, the business owner may no longer be able to effectively manage all aspects of the finances and may need someone with specialized knowledge to take on this role. A CFO can help to develop and implement financial strategy, manage risk, oversee financial reporting and budgeting, and provide advice on key financial decisions. Ultimately, a CFO can provide valuable expertise and support that can help a small business to grow and succeed. If your business is reaching the point where you feel you could benefit from a CFO, it may be time to consider this important hire.

Should a small business outsource CFO duties?

Businesses have always outsourced certain functions, such as accounting, legal, and IT. But in recent years, there has been a growing trend of businesses outsourcing their chief financial officer (CFO). There are many reasons why this is becoming more popular, but the most common reason is that it can be more cost-effective than hiring a full-time CFO.

An outsourced CFO can provide the same level of expertise and experience as a full-time CFO, but at a fraction of the cost. In addition, an outsourced CFO can provide added flexibility and scalability, as businesses can scale up or down their services as needed.

There are many benefits to outsourcing your CFO, but it’s important to choose the right provider. Look for a provider with a proven track record of helping businesses achieve their financial goals. In addition, make sure that the provider has a team of experienced professionals who are familiar with your industry and your specific financial needs. By taking these steps, you can ensure that you get the most out of your outsourced CFO.

Interested in learning more about CFOs?

We’ve got you covered. At New Life CFO, we help companies of all shapes and sizes better understand and take control of their financial present and future through fractional CFO services. Reach out to us online for a free consultation or check out our additional resources for more insight.

If you need improved financial results immediately, watch our three-part series on how to create financial stability now and improve profitability for the long term.