6 Reasons why an Entrepreneur Needs a Strong CFO

Entrepreneurs who are fortunate to be facing growth pains know that growth hurts. Look closely at a successful entrepreneur facing serious business growth and you’ll notice they don’t sleep much.

 

There are many issues that face growing entrepreneurial businesses. Growth can kill a company if it is not managed properly.

 

What could go wrong when an Entrepreneurial Company is in Growth Mode? Plenty. Having a Strong CFO as part of your management team will minimize the possibility of failure and increase the probabilities for long-term, profitable success.

 

A Strong CFO can help a growing company in the following areas:

 

1) Cash Management. Growing companies have to properly manage their cash, or they will not be able to fund growth. Not managing cash and planning for cash needs can lead to failure.

 

2) Profitability Management. As Entrepreneur, do you really know… 

• your true costs?
• whether you are making a profit or a loss?
• which products should be pushed to maximize profit?

3) Budgeting & Forecasting. Without targets and goals, it is difficult to achieve them. Growth has to be planned.

 

4) Cost management. Every dollar spent should lead to more than a dollar in value. Is every dollar being spent being spent efficiently and effectively?

 

5) Controls. Money may be flying out the door and you wouldn’t even know it.

 

6) Decision making. Without timely and reliable information, you can’t make timely and good decisions.

 

Want to have the cash you need to grow, make money, and make better decisions? Hire a Strong CFO!

  

Prediction: ERP Implementations

ERP implementations are coming back. It has been a while since ERP's have been major investments for companies. (If you don't remember the last time, Google "Y2K").

Reasons for this prediction:

- CFOs are sitting on record amounts of cash (See CFO.Com article).
- This cash needs to be put to productive use.
- CFOs are reluctant to use the cash for Hard assets (Real Estate, Plant Equipment).
- Most ERPs are at least 10 years old, and significant technology improvements have been made since, which can allow for significant value-add.

The 'IF' Factor:

If ERP Vendors and Integrators can speak the CFOs language and make the case for significant bottom line improvements, CFOs may be willing to make that investment.

For True Strategic CFOs:

If you consider a large system investment to be in your future, make the decision as soon as possible - costs (ie talent) will be more expensive once everyone else takes the decision.