As we approach our ten year anniversary, we have learned a lot about entrepreneurs, small business owners, and what it takes to successfully run a business. David Letterman, the well-known late night host, used to have a segment on this show called The Top 10 List. Since he left in 2015, we think it’s time to bring that back and provide AcceleratingCFO’s Top 10 Lists of things we have noted over the past ten years. The next series of posts will be a tribute to both our clients and colleagues as well as an acknowledgment of our ten year anniversary in February 2024. 

10. Greater Transparency into Financials: When it comes to core financials, business owners are not always sure what they’re looking at and that can be hard to admit. The Fractional CFO interprets these statements, ensuring the business owner can better manage the business and avoid potential pitfalls that would otherwise remain unseen.

9. Establish KPIs: Key Performance Indicators (KPIs) help companies track how they are doing. Metrics such as gross margin, days sales outstanding, and revenue per employee, are just some of the KPIs that businesses should be tracking. KPIs are objective data points that show whether or not a business is operating at an effective level. 

8. Create a Budget/Forecast: Most small business leaders do not have the time nor bandwidth to establish a formal budgeting or forecasting process. But as the old adage goes: Failing to plan is planning to fail. The Fractional CFO provides the infrastructure and accountability that all SMB leaders need to ensure that the business is operating as planned. And in the event it’s not, the Fractional CFO will identify alternative strategies to maximize cash flow and sustain viability. 

7. Sell Business: Business owners work hard their entire lives to build their companies. Many small business owners will only experience selling their business one time in their lives. A Fractional CFO will lend experience during the due diligence and negotiating process, helping a seller maximize his or her company’s value in order to sail off into the golden years comfortably.

6. Acquisition Support: Companies that are planning to grow through acquisition need to have experienced financial leadership, specifically well-versed in the complexities of acquiring a business. From integrating disparate systems to cutting redundant costs, a Fractional CFO will be the difference between a successful merger and a failed merger.

5. Oversee Finance Staff: A business owner should be focusing on what he or she does best; and more often than not, it’s everything other than making sure invoices are sent out. Lifting the burden of managing financial staff is one of the unforeseen benefits of hiring a Fractional CFO. 

4. Raise Capital: Obtaining funds from third parties, such as private equity firms and angel investors, is a tricky endeavor where first impressions really, really matter. Having an experienced financial expert handle questions on business models and assumptions used in forecasts will go a long way in securing the needed funds. 

3. Create a Business Plan: Many entrepreneurs who are starting out are not sure how to create a business plan. Having a financial executive oversee and assist in writing the business plan will allow you to get your business started out on the right foot. 

2. Accounting Policies and Procedures: It’s boring and mundane; but the fact is that when you have solid processes and procedures in place, you establish the building blocks that will allow you to go from one million in revenue to 20x that in a short amount of time. 

1. Don’t Know What You Don’t Know: Most business owners have a good sense for their business but there are always things that one doesn’t know. And more importantly, there are things that we don’t know, we don’t know.  Working with a Fractional CFO, an outside presence, ensures that the entrepreneurs has data and information to intuitively understand and confident choose the right strategic steps for their company. 

Take-away: If one or more of these points resonate with you as a business owner, please reach out to us at info@acceleratingcfo.com.