Why Every Company Needs A CFO, Chief Financial Officer For Strategic AdviceAll Articles
Is your company profitable enough for a CFO? The answer is yes. A CFO can provide invaluable strategic advice that keeps your company moving forward. The problem that most small businesses face is the cost of hiring a CFO.
Because of the cost, most CEOs also function has a defacto CFO. This is fine until the company starts to grow. Then the CEO becomes preoccupied with finance-related tasks and can’t focus on long-term revenue-generating activities. This is where a CFO-like business consulting services can be beneficial. A few areas where a consulting services can be helpful are by creating a strategic business plan and performing crucial tasks like a cost and profitability analysis.
Creating A Strategic Business Plan
Improving performance should be a top priority for any company. Without continual improvement, a company fails to thrive and grow. Analyzing current business problems can expose troubled areas that need improvement. In order to develop a proper action plan, three different types of strategy need to be created.
- Business Strategy
- Market Strategy
- Pricing Strategy
By creating these types of strategy, you’ll get a better overview of where your company needs to improve and what actions are needed to improve.
Cost & Profitability Analysis
Tracking and controlling costs is the first step to improving profitability. Most businesses won’t last long without a plan. Unfortunately, the data can seem overwhelming for many business owners and they can end up with a subpar pricing strategy.
By using a cost and profitability analysis, the consulting service can provide strategic advice based on a variety of factors to help you determine the best business opportunities and pricing models to help you maximize your profits. A few include:
- Quantifying historical data
- Reviewing inventory values
- Review current pricing structures
Hiring a full-time CFO isn’t a necessity, but every company needs strategic advice that the CEO can’t provide.