The Rise of On-Demand Finance Expertise

Contrary to popular belief, you may not actually need a CFO. As a corporate finance consultant and on-demand CFO, I am in the business of solving problems and removing impediments to growth for privately held companies worldwide.

I’ve been called a Chief Problem Solver, as I work with companies confronted with difficult challenges on the spectrum between high finance (raising capital) to operational (designing HR processes). I’ve also played the role of full time CFO, both in my history as a FTE for high tech firms and today in an on-demand capacity.

From where I sit, taking companies through many stages of their lifecycle, it’s evident that not every company actually needs a CFO.

How to know if you need a CFO with one simple question:

Though I have worked alongside literal rocket scientists in my past, identifying the right time to hire a CFO is not rocket science. It can actually be quite simple to understand. When I assess an organization’s “CFO readiness,” I ask: Is the CEO building a product, or a company?

How do you know if you are building a company or a product? When I meet with prospects, here is how I generally assess “CFO readiness:”

  1. Are clients using the product right now?
  2. Have you seen an increase in clients and client usage every year?
  3. Are non-founders leading sales and/or marketing efforts?

I’ll admit it – building a product is way sexier than building a company, but even Zuckerberg outgrew his dorm room eventually.

If your business is at the stage of product building, then you do not need a CFO. Save your money. For the record, I promise that your website will be fine without a named CFO. 

6 things you really need instead of a CFO

If you are building a product, and not yet a company, how do you build and manage a minimum viable back office in lieu of investing in a CFO to do it for you? I recommend these six initiatives:

  1. A solid accountant to prepare your financial statements and pay your bills.
  2. A reliable local tax accountant to prepare your state, local and federal taxes (such as income, sales & use, etc.)
  3. Access to your bank accounts so you can see what you have in the bank every hour of the day.
  4. A very reliable data entry perfectionist to key in the actual financial results into your financial model (the one that a freelance FP&A resource spent three days building for you.)
  5. Either a Professional Employment Organization to help you hire, fire, and to procure and administer benefits, or a freelance HR consultant.
  6. Access to on-demand expertise to help with the heavy lifting.
When on-demand help makes sense:

Some of my favorite engagements have been with clients who really do not need a CFO. What they need is information and strategy for how to get where they want to be.

When I work with a client who does not really need a CFO, it is typically to solve a key problems or series of key problems that are impeding forward progress. Here are some of the more common ones:

  • Why don’t VCs want to hear from me again until I have $1,000,000 in annual revenue?
  • Why I am the only person who can sell this product?
  • I don’t know if I should charge for this product or give it away?
  • What do I need to do differently if I want to build a subscription revenue company? Do I charge per-seat, per-click, per-use or per-feature?
  • How do I structure my pitch in less than 36 slides?
  • How can I find out how much cash in the bank I will have 90/180/365 days from now?
  • How do I set up HR and Accounting processes and how do I know that the work is getting done efficiently and properly?

And if these questions are indeed on your mind, let’s talk.