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4 Reasons Startups Need a Fractional CFO And How You Can Help

There’s never anything quite as exciting as an idea for a brand-new business.

Every year, over 300 million startups jump from being vague and ill-defined concepts in their founders' minds to becoming gloriously real. And unfortunately, out of that number, only about 10% ever get to revel in long-term success. This is tragic when you realize that all these founders had huge dreams for their businesses.

Their entrepreneurial passion was as powerful as the light from a billion suns. And now, as the memories of these companies fade away into oblivion, their owners are left with the painful memories of what might have been. What's sad is that many of these companies could have not only survived but thrived if only they had access to the keen financial oversight that a CFO can provide.

Why It Makes Sense to Add a CFO Advisory Service

Many founders don't realize that these days, even small-scale businesses can benefit from the same kind of CFO expertise that Fortune 500 companies enjoy. That is if they onboard a fractional CFO instead of hiring a full-time one. This is so much more affordable for early-stage enterprises than hiring an employee who comes to the office every day.

The difference between a typical accountant and one offering a CFO advisory service is that the former merely generates financial data but doesn't provide the in-depth advice that accelerates growth. It's like an individual giving you all the pieces of a puzzle without telling you how it all comes together. Sure, you might be able to figure it out over time on your own, but it would be better if someone was standing by your side, coaching you on exactly what you need to do to finish it.

As an outsourced CFO, you can be that coach. The invaluable advice you dish out could mean the difference between a startup that fails miserably and one that reaches its full potential.

If you’re an owner of a traditional accounting firm looking to boost earnings while increasing career satisfaction, consider adding a CFO advisory service that caters to early-stage companies. Here are four reasons why startups need a fractional CFO and how you can help:

1. They Create Strategic Plans Based on a Founder’s Vision

While many founders are out-of-the-box visionaries, many don't possess the logistical know-how to breathe vibrant life into their dreams. That's where you come in. With the proper training, you'll be able to build rock-solid foundations underneath the nebulous, half-formed ideas of business owners.

You'll learn how to take a founder’s hazy ideas and translate them into highly detailed plans backed by hard numbers. With this kind of financial expertise at their disposal, entrepreneurs’ imaginations can take flight in a realistic and practical way, which can be hugely satisfying for you and the businesspeople you’re helping.

2. They Help Enterprises Maintain Financial Discipline

Founders, who typically aren't very good with numbers, often blow through every penny of their initial capital before even realizing what's happening. As a fractional CFO, you'll be able to put systems into place that preserve scarce financial resources. This results in higher liquidity and a more sustainable revenue stream. That way, owners can keep their enterprises afloat even during challenging times.

3. They Know When to Scale

Knowing when to scale and when to put growth plans on the back burner is crucial to the financial health of every enterprise. Scale too quickly, and a business could run out of cash. Scale too slowly, and the opportunities that come with expanding operations could pass them by.

As an outsourced CFO, you'll help owners scale up at precisely the right time and in the right way. For instance, you can offer insights about things like whether they should stay in their niche or pursue new markets. Another example of the advice you'll be able to deliver as a fractional CFO is whether they should remain small so they have the agility needed to survive in a hyper-competitive sector.

4. They Assist with Fundraising Efforts

Like everybody likes to say, capital is the lifeblood of an early-stage startup. However, fundraising is one of the most challenging tasks for founders. That's because to get the job done, they’ve got to jump through endless financial hoops while still somehow finding time to manage day-to-day operations.

As an outsourced CFO, you’ll reduce the workload of overburdened business owners by working with financial institutions and investors to obtain much-needed startup capital. This means helping enterprises raise money through every stage of the fundraising process—from the second a founder considers seeking outside investment to the moment documents get signed.

Boost Earning Potential By Adding a CFO Advisory Service

Are you stuck on the exhausting treadmill of working mind-sapping and soul-draining hours while putting up with difficult clients who see you as nothing more than a glorified numbers cruncher?

If so, consider adding a CFO advisory service to your current offerings. That way, you'll earn more without needing to devote every waking moment to your practice. That's because a CFO advisory service is seen as a premium offering. This is unlike basic bookkeeping services that many business owners consider a commodity akin to having someone haul their trash dumpsters away or clean their toilets.

This means businesses will pay you more than if you only offered the meat-and-potato services every accounting practice in a thousand-mile radius offers.

Unlike a full-time CFO who oversees every aspect of the financial side of a business, outsourced CFO services can be used on a per-project basis and can be precisely tailored to a company's needs. This allows an enterprise to benefit from the expertise of a CFO without incurring operating costs they can't really afford.

While it’s true that many early-stage companies are cash-strapped, as an outsourced CFO, you’ll be able to provide them with a la carte services. This means they only pay for what they need.

For example, let's say an enterprise is seeking outside investors and needs someone who can review its business plan to ensure it's compelling enough to entice venture capitalists. You'll do this for them while getting paid handsomely for providing expert financial advice that can make the difference between not getting funded and receiving the capital they need.

At The Expert CFO, we have the comprehensive training and robust support you need to quickly get you up and running as a highly-paid business consultant ASAP.

Contact Us to get started today!

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