Most of our Clients are relatively small (under $10,000,000 in sales per year). As a result they often don’t have sophisticated financial reporting or analysis in their company. In fact, many of them don’t even have bookkeepers that can provide them with accurate numbers.
In addition, I often find that our business owner Clients don’t have the ability and have never learned how to read their complete financial statements. Most of them can read their profit and loss statement; some understand their balance sheet and almost none can explain their cash flow statement. And, I think of all the reports a private business owner can get, the cash flow statement is the most important.
This brings me to the 7 reasons it makes sense for many privately held companies to rent a CFO:
- Renting a CFO is more cost effective than having one work with you full time. In addition, most private businesses don’t need the services of a full time CFO.
- A CFO can help you understand where your cash goes and how to budget for changes in cash.
- A CFO can help you understand the key performance indicators in your company.
- A CFO can help you develop and measure the drivers that make your key performance indicators move.
- A CFO can help you understand how to finance your business.
- A CFO can help you how to position your company so it becomes more valuable in the future when you want to sell it.
- A CFO can help you make your company more profitable today by focusing on cash and where it comes from.
As you can see, having a rent a CFO can help in a variety of ways. It’s one of the expenses and programs I suggest for any privately held business. Many times, but not all of the time a good rent a CFO can dramatically increase the excess cash you have for your company and yourself.
As always, I’m interested in hearing what you think about renting a CFO for your company. Let me know what you think.
I’ve written a special report on using key metrics in your business. I encourage you to download this report by clicking on the button below. I believe you’ll find this report fits in nicely with the entry above.