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3 Ways a Virtual CFO Can Help Your Business Grow

A Virtual CFO is hired by businesses who want the services of a traditional CFO but do not want to bear the cost of hiring an internal CFO. A Virtual CFO works with a business owner to grow their business.

Virtual CFOs are growing in popularity for small and medium sized businesses as they are a cost effective solution for businesses who want to grow, and make more profit while growing.

A  study recently found that key value CFOs provide includes performance management, strategic leadership and traditional finance. Now, because of Virtual CFOs, these services are accessible not just to large businesses.

But what are the key ways Virtual CFOs actually help businesses grow?

1) They set strategic direction

Virtual CFOs are trained professionals who work daily with business owners to achieve their business goals.

If you ask the average business owner if they want to increase their sales, more often than not they will say yes.

That means Virtual CFOs spend a lot of time helping business owners grow their businesses.

Your Virtual CFO is someone who advises you on the strategic direction of your business. They will tell you what you need to do in your business to turn on ‘growth mode.’

The strategic direction of your business is what determines if you will grow or not. Working with a Virtual CFO will help you get that direction right.

2) They provide financial forecasting

If you want to grow in the right way, you need forecasting.

Growth can actually be the end of many businesses. They either grow too fast, hire too many staff, purchase too much stock, or all three.

Financial modeling and forecasting is how you put numbers to what growth actually means for your business.

Your Virtual CFO will help you determine your Sustainable Growth Rate. Your Sustainable Growth Rate is the rate at which you can sustainably grow your business. It is a critical number for setting your growth targets. Without it, you could go broke.

3)They fix non-financial problems

When a business grows, it changes.

That means hiring new staff, maybe moving into a new premise, maybe increasing the number of owners/managers.

All of these changes bring with them an element of uncertainty. With that uncertainty, comes risk.

John A Shedd’s quote from 1928 sums up the necessity of taking on risk in business; “A ship in the habour is safe, but that’s not what ships are build for.”

However, a key part of being successful in business is mitigating risk where possible.

A Virtual CFO is a trusted advisor who advises you on how to navigate the risks of growing your business that are non-financial.

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