Turbo charge your business with an outsourced CFO

Are you a business owner looking to grow, but are unsure of the financial costs and implications? You may benefit from hiring an outsourced CFO.

What is an outsourced CFO?

CFO is short for Chief Financial Officer, and this is the most senior and experienced finance professional in most big businesses. A CFO provides high quality finance, accounting, commercial and operational advice to a business. Not surprisingly, a CFO comes with a hefty salary and cost to the business, and so it is usually only larger businesses that hire a full-time CFO.

Smaller businesses, particularly those that are looking to grow and expand services, also need the advice and services provided by a CFO but not on a full-time basis. This is where an outsourced option comes into play. An outsourced CFO could work on a one-off project or on a retainer, for a much smaller number of hours per month. This means the cost is substantially lower than hiring a full-time resource.

How do I know if I need an outsourced CFO?

There are several scenarios in business where the services of an outsourced CFO may be just what you need:

• As a new business entrepreneur, you are busy focusing on marketing, sales, servicing customers, and you just don’t have time for budgeting, reporting and building a cash flow forecast.

• As a small business owner, you know your business and your customers, but you don’t really know your numbers. Some of your decisions are made based on gut instinct and you don’t really know whether you are making as much profit as you should be.

• As a more established business owner, you have an internal accountant who looks after your bookkeeping and compliance, and who provides you with monthly reports on business performance. However, you don’t really understand them and feel the need for more financial planning and analysis.

• Your business is struggling financially, and you have overdue debts with the ATO. You need help and advice on how to reduce costs and pay down your debts.
  

What benefits would an outsourced CFO bring to my business?

Better financial information

To make better business decisions, you need accurate and insightful financial information that is produced in a timely manner. This is a fundamental requirement for any business, and it is the first thing that an outsourced CFO would put in place. Your business should have an annual budget so that you know how much you can spend, and reporting that tracks how you are performing against targets.

Improved cash flow

Improving cash flow is critical to all businesses, and equally important, knowing that you have enough cash in the bank to pay those large, periodic liabilities such as your quarterly BAS, superannuation, and for investing in new equipment. An outsourced CFO could build you a forward-looking cash flow forecast that predicts cash inflows and outflows for the next 12 months and show you the levers to pull to increase cash inflows whilst reducing cash outflows.

Margin analysis & improvement

Is your business making as much profit as you think it should be for the efforts you are putting in? Your business may benefit from an analysis of your pricing and cost structures to make sure you are accounting for all items correctly in your prices or charge out rates. An outsourced CFO would have the experience of many different industry types to be able to advice on best practice for your sector.

Reducing company debt

Many small businesses are struggling with increased levels of ATO debt post COVID. As the ATO have also stepped up their efforts to recover small business debt, you may be receiving warning letters from the ATO demanding payment. An outsourced CFO can help you assess the options available to the business, including cost reduction programs and ATO approved debt reduction plans.

How much does an outsourced CFO cost?

The cost of an outsourced CFO will depend on the kind of support your business needs and the complexity and size of your business. You should expect to pay between $1,000 and $5,000 per month. One-off work will likely cost between $2,000 and $10,000. Whilst this may seem like a large expense for your business, you should consider it against the following:

• An admin assistant earning $50,000 per annum is likely costing your business $5,000 per month with all costs included.

• You should expect an outsourced CFO to be able to improve your business profitability and cash flow by significantly more than their monthly cost.

• For one-off projects, is the potential upside to your business more than the cost of investing in this piece of work?
  

Why should I choose GearChange Business Advisory?

At GearChange Business Advisory, our passion is supporting business owners to turn their dreams and goals into an actionable business plan that gives you the best chance of success, and the future you deserve for you and your family.

Our business is led by Steven Nicholson who has over 30 years of experience helping small and growing businesses achieve their business goals by advising and supporting business owners with commercial advice and insightful financial information.

Steven’s extensive experience has taught him two key things that ensure a successful outsourced CFO engagement:

1. All businesses are different. Rather than a one-size-fits-all solution, Steven will always tailor the services to meet the specific requirements of each client, ensuring that their financial strategies align with their business objectives.

2. Build a trusting relationship with the business owner. Steven’s relaxed and honest communication style allows him to lower barriers quickly and show the value he can add as a trusted business advisor. This is critical to understanding the true worries and drivers of a business owner and ensuring that these are front of mind in any solutions provided.

What should I do next?

By outsourcing financial management to an expert in the field, you can focus on what you do best – running and growing your business.

Get in touch with GearChange Business Advisory for a no obligation chat to see if we can help your business move up through the gears.

Initial free CFO consultation