Is it time for a virtual CFO?

As a startup founder, no one knows your business better than you, but to really understand your financial position and leverage it for success, you might just need a virtual CFO.

If that sounds a bit too futuristic, fear not. A virtual CFO is a real person, at least we are anyway!

You might have also heard the terms: Part-time CFO, CFO on call, CFO advisory services or a CFO consulting service. Same same.

So what does a virtual CFO do?

That depends on what you need.

In the beginning, you might need to manage your cash flow more actively and get a better handle on your key finance and operational metrics.

All going well, you might need help with budget planning and managing your growth through to capital raising and high level strategic advice.

And a good CFO on call service is not to be mistaken for a finance manager. Yes, we can manage your finances, but for startups, it’s much more about the experience we bring to bear for you.

We have operational experience building systems from the ground up in our own startups and as virtual CFO to many others, including through accelerator programs like The Actuator.

Through a good virtual CFO service, you get that hard-earned experience. And you also get connections.

Whether it’s as simple as looking for insurance or, more valuably, sources of cash.  A good virtual CFO is also a networked one – they know how and where to access funding, including grants, R&D tax incentive, equity crowdfunding and R&D forward financing.

And therein lies the beauty of virtual CFO services – they are flexible and scale with you. You’re not paying a full time person and (at least for our service), you’re not locked into a contract either.

A virtual CFO can take on more responsibility for you until you’re ready for your own inhouse CFO (and then help you find the right one, too).

And the word ‘virtual’ can be a bit misleading. If video suits you best for catch ups, that’s fine, but a virtual CFO service should have face-to-face options at least.

How do I know when it’s time for a virtual CFO?

Generally speaking, if you feel like you need a better handle on your finances so you can grow, like the founder in this article who needed financial modelling to successfully scale up.

Often our clients tell us they don’t know exactly what they need help with financially – they just know they need it.

And often it’s also because they’re spending too much time working on their finances without getting the results they need, which is distracting them from working on other vital areas of their business, like sales and operations.

What does a CFO on call cost?

Again, that depends on what you’re buying and who it’s with.

Speaking for ourselves, our CFO on call services range from $1500/month, scaling to $3500+/month as you need more, with no lock-in contracts.

Who is qualified to provide CFO consulting services?

Like all your suppliers, you need a virtual CFO who gets startups.

One who understands startup life – the highs and the lows. And one who has worked in and founded startups themselves, because running a small business or even a larger company is not the same as working in a startup.

Virtual CFOs should have diverse experience in different types of startups, so they know the metrics that are relevant to both the type of startup you’re running and the stage you’re at.

Depending on those things, we’re talking about metrics like your monthly recurring revenue, lifetime value, customer acquisition costs, churn, burn and (cash) runway.

By looking at the right metrics, a virtual CFO can give you an immediate sense of how your startup is functioning. They will help you understand which levers to pull to reach the next level, and can also guide you there with the right reporting, insight and advice along the way.

If this sounds like where you’re at …

Book a call with us to talk it through (it won’t cost you a cent).

And if you’re not quite sure, you might find this article about SaaS startup metrics helpful (and call us to explain if you need 🙂 )

Or you might find this one about startup jargon a bit of fun because as they say: If we can’t laugh at ourselves, who can we laugh at?

Thanks for reading.

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