Florida CFO Group Blog

Helpful topics from Florida CFO Group's experienced CFOs

When to Hire a Fractional (Part-Time) CFO - Part 3

Part Three of Three Parts: When to Hire a Fractional (Part-Time) CFO

In the third and final part of a three-part series on hiring a fractional (part-time) CFO, Florida CFO Group partners  Betsy BennettMark Brown, and Jim Dietz discuss how to know you need a part-time CFO and the important considerations in hiring one.

What are the indicators for a business owner that a part-time CFO is needed?

Mark: It can be sudden – such as when an entrepreneur is not able to get the financing they wanted, or the financer is threatening to pull their credit. Or, it can be more gradual. For example, when the business is small, the entrepreneur has his or her finger on the pulse of everything that's going on. They don’t need financial reporting to run the business. But with growth, that connection becomes weaker and weaker to where they start to feel like they're flying blind. So, it's about to get scarier and scarier for some of the decisions they're making and allocating resources.

Jim: Entrepreneurs start out by managing simply by walking around and seeing what each person is doing, having a direct and personal relationship with each employee. With the growing complexity of a business there may be too much for the entrepreneur to manage. That can lead to the CEO being distracted by the worries about everything they have to do and how they have no one to help them. In my experience, that's when clients come to me, because they need somebody to help them as things become overwhelming. It goes beyond the relatively informal and direct personal means of management they've relied on to get to that point.

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When to Hire a Fractional (Part-Time) CFO - Part 2

Part Two of Three Parts: When to Hire a Fractional (Part-Time) CFO

In the second of a three-part series on hiring a fractional (part-time) CFO, Florida CFO Group partners Betsy BennettMark Brown, and Jim Dietz discuss why to hire a part-time CFO and the differences between interim, full-time, controllers, and part-time CFOs.

What's the difference between a full-time and a part-time CFO?

Betsy: As part-time or fractional CFOs, we work ourselves out of a job, don’t we Mark?

Mark: My objective is to stop being needed; to work with my clients so they grow to the point where they really need the full-time solution. I try to stay ahead of the client so I'm decreasing my time before the client asks. 

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When to Hire a Fractional (Part-Time) CFO - Part 1

Part One of Three Parts: When to Hire a Fractional (Part-Time) CFO

In the first of a three-part series on hiring a fractional (part-time) CFO, Florida CFO Group partners Betsy Bennett, Mark Brown, and Jim Dietz discuss the role of a part-time CFO and when and if you should hire one.

Why should an entrepreneur consider hiring a fractional (part-time) CFO?

Mark: An entrepreneur with a small company is the head of sales, operations, marketing, research and development, HR, and the CEO, COO, and CFO. And that's fine in the beginning. Then as the company grows it becomes more complex and you start adding people. Some positions, such as VPs of sales and operations are harder to do on a part-time basis and tend to be full-time. As growth continues, it reaches a point where a full-time CFO is needed to handle some of the financial aspects.

But there's this transition period, when the role of the CFO goes from being 10 percent of one person’s time to a large time commitment, but it just doesn’t make economic sense to hire an expensive CFO. If you do hire a full-time CFO too early, he or she is stuck doing controller and bookkeeping work to fill their time. So, you're overpaying somebody to get their skill set. If you bring in a part-time CFO to focus on actual work that needs to be done, you can save a tremendous amount of money.

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Are You Losing Money on Your Biggest Customers? Part III

Part Three of Three Parts: Turning Around Unprofitable Customer

In the third and final part of a three part series on how to recognize if you’re losing money on your largest customers, Florida CFO Group partners Betsy BennettMark Brown, and Jay White discuss turning around unprofitable customers.

Turning around an unprofitable large customer relationship.

Jay: We have some big customers with one of my clients, where we sell them upwards of fifteen or twenty different products. I would say three-quarters of the products that we sell are profitable. So, we’re working with the bottom quarter to begin with. We’ve sent these customers a letter notifying them of a price increase with the understanding we’ll continue the existing price for six months while they find another supplier if they do not want to go with the price increase. In some cases, they take the unprofitable parts elsewhere, but many have accepted the higher price and stayed with us. But, if they take an unprofitable part away, it generally is not that big of a deal as we were losing money on that part to begin with.

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Are You Losing Money on Your Biggest Customers? Part II

Part Two of Three Parts: Factors Impacting Customer Profitability

In the second of a three-part series on how to recognize if you’re losing money on your largest customers, Florida CFO Group partners Betsy BennettMark Brown, and Jay White discuss the factors impacting customer profitability.

Is Customer profitability an issue from the start of the relationship, or does it erode over time?

Betsy: It depends. I think the whole key is that you need to have some mechanism to try and measure customer profitability, either an interactive system that works with your general ledger system or an ad hoc financial analysis that you do on a periodic basis. 

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