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Value Creation Blog

3 Things You Might Want A Rent A CFO To Do

Posted by Josh Patrick

Creating_ValueI’m a huge fan of renting C suite people to work in many private businesses.  Most privately held businesses are not complicated enough to need a full time CFO, CMO, CIO or CTO.  At the same time all of them can use the services of people who could hold these credentials in larger companies.

The C suite is where strategic activity and ideas often happen.  This is not to say that people in the C suite should trickle ideas down to rank and file.  They should work with management to help put together strategic initiatives that can provide significant value to the business and the owner of that business.

I was having a conversation with Joe Worth from B2BCFO

.  During our conversation he mentioned three discrete areas his firm works in.  I think these are great things for business owners to think about as they put together a financial team in their company.

Start with the basics – technical financial work.  I believe that all businesses should have excellent financial reporting tools in place.  Most of the time running those tools can be left to a controller or in smaller companies, a crack bookkeeper.

At the same time setting up these systems will often be improved when a senior level CFO helps establish systems and methods for putting financial information together.  In addition, the rent a CFO can provide the business owner with education to read and understand their financial reports.

The real value is working on strategic financial issues in the company.  The real value of a CFO is helping a business understand what their financial opportunities are.  Here we might have good questions being asked about effective use of capital, understanding what the key financial drivers of the business are or how to establish a compensation program that rewards important activities in the company.

A good strategic CFO can help a business owner develop measurements that drive the cash flow, profits and enterprise value of a company.  These are not day-to-day activities but a consulting arrangement where a rent a CFP should help set the tone and then work to make sure everyone stays on track.

If money needs to be raised, then a CFO can help with this activity.  Whether the cash needed is a bank loan, mezzanine capital or outside private equity having an expert work with you is a good idea. 

I’ve rarely seen a private business owner who knows how to effectively raise money for their company.  Or, for that matter, understand what the capital structure of their company should be.  Using a rent a CFO for these activities is one that can add value as well as help make your company more profitable.

What are your thoughts about using outside C Suite help?  If you haven’t thought about it, you should.  This help can be a very cost effective way to bring high level advice into your company.

Josh Patrick

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Topics: for business owners, private business owners, strategic planning

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