A recent report from the Financial Executives International’s Financial Executives Research Foundation has some interesting highlights. The report outlines those startups that bring on a CFO sooner than later do better.
Startups and the CFO
“For a startup company the CFO is probably going to sit at the intersection of finance and strategy as well as, depending on the company, risk management and operations,” said FERF managing director of research Dave Pelland. “If you think about a startup venture, pretty much regardless of the industry, the CFO should be among the first three or four people hired. The founders will have the initial idea for the company, or the technology they’re trying to develop if it’s a tech startup. As they start to develop their product or service, and to attract outside investment and potentially revenue, a financial executive is going to be valuable in not only managing the finances, but also the company’s strategy and eventually its infrastructure as the company develops.”
CFO service to Startups go further than those Mr. Pelland stated. Your CFO is the ethical center of your organization. The cool and calm center of a business by definition is going in a thousand directions. The CFO creates internal control. They begin the annual budgeting and forecasting process. They acquire and negotiate the leases and purchases that the fledgling business will need to move along the business plan.
Speaking of business plans: no business should be operating without a plan. The CFO is the person who will be the center of much of that plan. They can be full time, interim or fractional. Marketing and market research, talent acquisition and requirements, and budgets are part of the plan. From the business plan comes the pitch decks. The CFO and CEO will need to sell the company, its idea and value proposition to investors with this deck.
How SBA * Consulting LTD can help the Startup, they young company or even a fully mature company are similar. In their report, Center Of The Storm: The CFO’s Role In Start-ups And Rapidly Growing Companies the FEI highlighted the same skills our Consultants can bring to bear:
CFOs are critical to raising capital, through venture capital funding, private investments or private equity investments
Establishing sound reporting systems and tools can allow for improved reporting metrics and communication to investors
CFOs are playing an essential role in setting and monitoring company strategy, and maintaining balance between investing in growth, building market share and preserving capital for future opportunities