August 20, 2018 | 4-minute read (691 words)
Your startup is growing, and you are busy. You’re selling your products, it’s time to hire more staff, and things are looking good.
Yet, because you’re so busy, you don’t have time to look at your finances, and perhaps your cash flow doesn’t seem as good as it could be.
Your startup needs financial systems and processes in place to help it grow, and to do that you need to hire someone to take care of it for you, so you can concentrate on your duties.
In this article, we'll look at why hiring an outsourced CFO can help startups grow more quickly, but first let’s look at why an outsourced CFO is a good idea in the first place.
In-House or Outsourced CFO for Startups
When it comes to hiring a CFO, you have two options. You can hire an in-house CFO, or you can hire an outsourced CFO who works outside your company.
For many startups, hiring an in-house CFO is just too expensive, and an outsourced CFO is a terrific alternative.
Most outsourced CFOs are paid a fixed rate. You also don’t have to provide healthcare, vacations, bonuses and other benefits to outsourced CFOs. You simply pay for the time you need.
You’ll also find outsourced CFOs bring a unique perspective to the finances of your startup. They are often more objective and have experience with startups.
You Can Keep Costs Low
When you have an outsourced CFO on your team, you’ve got someone watching your cash flow with an eagle eye.
Your CFO can help you with financial analysis as well as strategic analysis, offering suggestions for where you should and shouldn’t spend your money.
CFOs help you grow your business faster because they help keep costs under control by watching staffing costs, office costs, and marketing spends.
You Can Make Informed Decisions
As the owner of a startup, you want to make the best decisions for your business, but that is hard if you don’t have the information you need.
An outsourced CFO is much more than a bookkeeper or accountant as this person can help you with forecasting and planning.
Your CFO provides support to help you operate your business and make plans for the future.
Consider some of the things an outsourced CFO can help you with:
You Can Interpret Financial Information
If you aren’t a numbers person, it can be difficult and time consuming to read your budget information.
Your outsourced CFO can help you interpret your financial information and help you decide what strategic initiatives you’d like to pursue based on your numbers.
In addition, with this information provided by your CFO, you can better manage your risk, control your spending and find ways to save money.
You Have a Trusted Advisor
Making a board presentation? Meeting with angel investors?
Your outsourced CFO is a good advisor who can help you prepare reports for these meetings, help you understand them, and then advise you on what to do with them.
Outsourced CFOs who understand startups are even more well-versed and able to be an advisor you can trust.
In addition, outsourced CFOs stay up-to-date on the latest trends, information and software. They can then relay any opportunities to you.
Hiring an outsourced CFO can help your startup grow more quickly.
They can help you navigate through the often muddy and complicated waters of your startup’s finances.
These professionals are skilled in business development and because of this, they can help you meet your goals for growth.
Are you a new startup ready to succeed? Are you looking to get your new business off the ground and watch it rise to success? We are here for you. We can help answer your questions and guide you through the process. Outsource your HR duties, finances, payroll and more to us. Contact Escalon today to get started.
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