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  • Writer's pictureCharlotte Capital

How to Employ the Best Fractional CFO Consultant for Your Business

It's important to know what to look for when searching for a CFO to employ. Learn how to employ the best fractional CFO consultant for your business here.

Do you need someone to help you with specific areas of your business - finance, operations and corporate development? You need a highly specialized and experienced individual in the area of growing and accelerating profitability in a business. You need to hire a fractional CFO consultant, but with all the dabbler consultants out there, you want to make sure you choose to employ the best fit.

Sometimes candidates may try to manipulate you into hiring them when they are actually not as qualified as they proclaim. Let’s talk about a couple of things you need to consider when you are looking for the best fractional CFO consultant to employ for your business.

Look to Employ for Specialty

When looking for a part-time CFO, make sure they are true business experts and have a range of experience either in your size company, industry or in a closely related one. For instance, big company employees rarely understand the specialized and unique business challenges that small and lower-middle market businesses face. You CFO consultant has to be resourceful and add tangible value.

Making sure your CFO has specialized experience helps ensure that they 'get it' and also make sure that the business consultant has a long track record of working as a consultant. You do not want a consultant that is looking to impose what they think your business needs on you just to justify his or her continued paycheck.

When hiring your part-time CFO, look at their track record with other previous companies. You want to employ someone able to focus on key financial and other elements relating to your business. This needs to be someone that can find the problems and solve them efficiently by suggesting strategic solutions, but also locating other outside efficient resources to accomplish the mission if needed.

Now that we’ve established that your CFO should have specialized qualities, let’s look at a similar quality: business experience.

Relevant Business Experience

Don’t shy away from directly asking for evidence of your potential hire’s previous experience. You want to make sure you have a clear understanding of their past projects and what each of those projects entailed. Ask for examples, and listen to the consultant's story-telling ability...true stories that exhibit pragmatism and common sense.

You want to be confident that your potential employee has the relevant experience to deal with any difficulties and problems that arise during their time working for your business. As a precaution, you may also check with their references from previous projects to make sure everything the employee claims is accurate.

Now let’s look at another consideration: source of income.

Primary vs Secondary Source of Income

Another thing to keep in mind when you are hiring a fractional CFO is to probe them about their primary source of income.

You want to make sure you hire someone that is not employed elsewhere for a full-time job. If your business is hiring them part-time but they have another full-time job, you and your business will not get the proper attention and time that you need from your CFO.

On the other hand, if your CFO is a full-time CFO consultant who makes this type of work their primary source of income, you can feel more confident that they are the best equipped CFO option to hire for your business; it will make them stand out from the other potential hires.

Another thing you want to consider besides income is a CFO’s ability to plan.

Do They Have a Reasonable Timeline?

Before signing any contracts with a fractional CFO that you are looking to employ, make sure you have set a clear timeline of events and specific deadlines or dates for any deliverables.

You want to check for any online ratings they have, or you can check with references to see how punctual they have been with projects or milestones in the past. You may also want to speak with a business consultant for a fresh perspective on the option.

If they show consistency for turning work in on time or delivering above and beyond what was asked for, then they are the person you want to employ for your business. You want someone that doesn’t just meet the basic requirements but instead, exceeds them and has both strategic vision and execution abilities.

Once you’ve established your candidate can follow through on a specific timeline, you need to consider the relevance of their specific offered services.

Which Services Are Provided?

While the main goal of a fractional CFO is universal, services can vary from one CFO consultant to the next. A good CFO will focus on maximizing your company growth and profitable potential, but you also want to look and make sure their offered services coincide with what you are needing them specifically to do within your company. Also, consider growth and how the consultant will grow with you over time. Can he or she provide value in capital raising, debt financing or M&A Advisory services in the future?

This makes is easy on you the business owner to know that a key resource, and that trusted advisor that understands you and your business, is ready to go when future strategic initiatives require leadership and execution.

Let’s take a look at a list of potential services fractional CFOs can offer:

  • Mergers and Acquisitions

  • Interim COO Services

  • Budgeting and Forecasting

  • Design and Systems Strategy

  • Profitability Improvements

  • Negotiating with Banks

  • Refinancings, including SBA Loans

  • Strategy that is Expert-Level

  • Cash-Flow Optimization

  • Business Development

  • Expanding Geographies, Products, or Services

  • Raising Capital

  • Exit Preparation & Execution

  • CEO Advisor and Trusted Sounding Board

Having determined they meet your service qualifications you should consider how much it will cost you to hire them.

Financial Cost

Hiring the best fractional CFO that you can find is not only essential to your business performance but also to your financial output. You want to make sure you are getting the best because these specialist employees do not come cheap! The listed cost for a fractional CFO ranges from $3,000 to $10,000 per month! On average, for a small to mid-sized business, a part-time CFO makes between $5,000 and $7,000 per month. This may sound like a lot, but a full-time CFO employee is 2-4x these amounts fully loaded for taxes and benefits!

If you are going to shell out that amount of money for someone, you want to be positive you are getting your money’s worth. While taking cost into consideration, another two important qualities to think about are personality and dependability.

Likability and Longevity

Two major issues to consider when looking to employ your fractional CFO are how well they can get along with you, your employees and their longevity in the consulting business.

Being hired part-time, the CFO will be in and out of the office environment, not spending full days with the other office staff. You want to make sure the person you choose to employ can get along and really connect with your team.

Think about looking to employ someone who is familiar with different tools that help bridge the absence barrier between them and your team. One of these tools they may be familiar with is Slack, Mattermost or other collaboration tools.

Another aspect to consider is the length of employment your potential hire provides from previous companies they’ve worked for. Did they work with other companies long-term or did they not last? If they worked short-term was it because the projects were short-term projects?

Likability and longevity are two important qualities you really need to consider when looking to employ a fractional CFO because office dissension and unreliability can make or break a business. Smaller business employees sometimes fear outsiders, and you want to make sure that your business consultant has gentility and the ability to get along with both senior and junior employees.

Finding the Right Fractional CFO

You may be wondering where to look for a good fractional CFO consultant candidate to employ for your business. With all the options out there, it can quickly become a little overwhelming to find a good place to look.

Let me help you get started looking for the best part-time CFO you can find. A few platforms you can search for your new hire are LinkedIn and your network. Google Internet searches can also yield great outcomes if you know specifically what you are looking for in a business consultant.

We’re so glad you read our blog and have a better understanding of how to find the best fractional CFO to employ for your business. Looking for more ways to enhance your business? Contact us today for more information on how we can help. We're located in Charlotte, Lake Norman and North Carolina but service great companies and their owners throughout the Southeast and USA.

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