2 ways CFO services can power financial success for startups and SMBs

For small companies, navigating the financial landscape is like venturing through a dynamic maze: one where the walls shift and the destination keeps evolving. Unfortunately, founders and executives at small businesses often have so many responsibilities that routine financial maintenance goes neglected for long periods.

Your mission is clear: to build a successful and sustainable business that scales. But the path to that goal is riddled with complex financial decisions, investor relations nuances, and all of the various distractions and blockers that routinely pop up during the course of a day’s work.

This is where having a dedicated finance leader, like a fractional CFO or a CFO services provider, can be a real game-changer for startups and SMBs. In this post, we’ll look at 2 key ways an outsourced finance leader can help small businesses bridge the gaps and successfully build their small operations into thriving enterprises.

Key takeaways: 

• Fractional CFOs offer strategic financial leadership: For small businesses and startups, an outsourced or fractional CFO can fill the critical gap in financial leadership, offering expertise without the full cost of a full-time CFO.

• Enhancing investor relations: A dedicated finance leader improves transparency, ensures accurate financial reporting, and communicates effectively with investors, helping build trust and attract additional funding.

• Data-driven decision making: CFO services help businesses harness their financial metrics, providing insights and benchmarks that guide strategic decisions and boost overall performance.

• Time and cost efficiency: By bringing in experienced finance professionals, businesses can save time, focus on growth activities, and avoid costly financial missteps.

Table of contents

• Outsourced finance leadership: An ace in the hole
• Boosting investor relations and building trust
• Harnessing your business metrics
• Adding CFO services to your team

Outsourced finance leadership: An ace in the hole

In the life of an SMB, one key to success is having someone in your corner who not only understands your financial landscape but is fully committed to managing your progress toward achieving your vision. But if your business isn’t ready to bring on a full-time CFO, there might not be anyone filling this important role.

Some SMBs and startups work around this issue by bringing in a fractional CFO to own the finance function. There are also some reputable companies, including Forecastr, that provide CFO services for even less than you would spend on a fractional CFO.

A dedicated finance leader isn’t just another online service provider - they act as your business’s personal financial strategist. They should be armed with expertise, relevant experience, and a deep understanding of the unique challenges your business faces now and in the future. A competent financial leader is always ready to roll up their sleeves and tackle everything from financial modeling to strategic decision-making and fundraising.

When CFO services are done well, your dedicated leader becomes an integral part of your team. They work closely with you and your executive team, developing an in-depth understanding of your business model, industry trends, and your financial goals. They bring a keen eye for detail and a strong strategic acumen to help you navigate financial challenges, identify hidden opportunities, and ensure that your performance is in line with your goals and objectives.

Their expertise and dedication act like a financial compass for your business - providing you with clear visibility into your financial health today and in the long term. They maintain your financial model, and they play a pivotal role in keeping your documentation transparent and accessible.

For many small businesses, filling the gap in their financial expertise with a CFO services provider is a game-changer that introduces new tools, guidance, and confidence that can propel the business to new heights in a short time.

Boosting investor relations and building trust

In the world of startups and SMBs, strong investor relations can be an important catalyst that drives a company forward. Investors are not just sources of capital - they can also be a partner in your business’s journey. Maintaining a strong, trust-based relationship with investors is crucial if you want to get the most from these important relationships.

A competent CFO service provider will understand the importance of transparency and effective communication in fostering strong investor relations. They will work diligently to ensure that your financial documentation is not only thorough and accurate but also accessible and easy to understand and conforms to current standards. This transparency builds trust with your investors, enhancing your credibility and paving the way for successful fundraising rounds in the future.

Furthermore, a dedicated finance leader will excel at communicating complex financial information in a clear and concise manner. Whether it’s financial updates for your board, write-ups for investor updates, or data room management, they keep your investors well-informed about your financial health and your roadmap for the future.

A good CFO service provider can provide strategic guidance for board meetings, periodic investor updates, and impromptu meetings. They can offer insights to help you craft a compelling financial narrative for decks and presentations that aligns your current position with your broader business strategy. This strategic alignment impresses your current investors, and it’s also important for attracting new investors.

Harnessing your business metrics

On the exciting yet challenging journey of operating an SMB, business metrics serve as your compass, providing clear direction and guidance. Accurate and insightful metrics help you understand your startup’s performance, identify areas of strength and weakness, and make informed decisions that drive growth.

When you add an experienced finance resource to your team, they act as your navigator. They can even attend important meetings to back you up, armed with a profound understanding of the key metrics that matter most for your business. They help you establish robust tracking systems, allowing you to keep your finger on the pulse of your financial performance.

You can ask a CFO service to help establish benchmarks for your industry and calculate your metrics to see how well you stack up.

Metrics are especially important during fundraising. When you’re raising capital, investors will use your metrics to evaluate your business against other opportunities. You should craft a compelling numerical narrative that tells the story of your imminent success using numbers that are based on your actual accounting data. CFO services can help you craft that narrative, and curate the data you need to back it up.

Adding CFO services to your team

When you have a dedicated player on your team with the necessary skills to drive your finance function, you get hours of time back to work on building great products, providing great services, and generating revenue.

Some people hesitate to reach out and open up a dialogue about CFO services because they think their finances need to be in order before they bring someone in. Don’t make this mistake! If your finances are out of order, bring someone in as soon as you can.

Shop around to find a service that has had success with companies at your stage in similar industries. Any reputable service will be able to perform basic analysis and reporting. If you have specific projects or requirements that are important to you, double-check to make sure the provider you choose has the ability to execute them.

Reach out to learn more about Forecastr’s CFO service plans. We have a deep bench of experienced talent, and you’ll probably be surprised to see how affordable it is to add this game-changing role to your team.