The Value of Hiring a Fractional CFO
Fractional CFO firms are a great option for businesses that don’t have the budget to hire an entire management team. They can also help you if your business has fluctuating staffing requirements, or if you work in industries with a high demand and low supply of qualified professionals such as finance, accounting, and law.
Investment Options: Fractional CFO firms are typically owned and operated by a single individual, who may or may not have any other employees. They offer small business owners the opportunity to outsource their management to an outside source at rates below what you would pay for a full-time employee.
Tax Advantages: Fractional CFO firms often charge monthly fees instead of annual salaries which can make them attractive from both tax and cash flow perspectives because they don’t require large upfront investments on behalf of the company owner. If your business is still in its startup phase, this can provide some much needed liquidity without committing all your capital up front. It also means that if you’re not profitable yet, these costs won’t be deducted against your earnings.
For startup companies, fractional CFO Firms can provide the flexibility that you need to make it through a period of time when cash flow might be tight.
Fractional CFO firms can also act as investors, either in return for equity or by making loans with preferred terms and rates. For example, if your business is looking at expanding into new markets but needs capital, fractional CFO firms may offer an investment opportunity rather than giving out a loan which would require monthly payments over several years that could tie up more resources than necessary during this early stage of growth.
Without fractional CFO firms, you would be responsible for handling all the day-to-day tasks that come with running your business.