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When is the right time to hire a CFO?

In Planning growth, Talent - 2 years ago - 5 min

When is the right time to hire a CFO?

A Chief Financial Officer can help support the rapid growth of companies – but when is the right time to hire one? Can your company afford a CFO and what strategic role can they play?  

According to PayScale, the median pay for a CFO in the UK is £99,762 per year. This depends on location, but it gives you a good guide to the salaries in-house CFOs command. If your company is growing fast, can you afford not to pay for a CFO’s skills?

A lot of companies aren’t ready for growth – whether they are in the tech industry or not. That’s according to recent research from Barclays and the Saïd and Judge Business Schools. Their report, Scale-up UK: Growing Businesses, Growing our Economy, shows that, in order to grow, businesses need to focus on leadership and strategic thinking to move beyond their current offering. That means having the skills, talent and know-how to help you take advantage of any funding or growth opportunities.

But how can you build robust, affordable finance? Do you need to hire a CFO?

One answer is to hire a CFO. Not just someone who’s there to keep the finances ticking over, but someone who can help secure the funding you need to grow. Someone who is future focused and a key strategic and tactical advisor to you and your leadership team.

A business’ financial needs are governed by the skillsets within the leadership team. Maybe you were comfortable handling the administrative side of finance in the early days, or perhaps you have a COO who is financially minded.

But is this the right approach? Is this the best use of you and your team’s valuable time, skills and energy, and importantly, can your business afford one?

Now you’re growing, what’s your primary need when it comes to the finance function?

When to hire a CFO

Bringing in financial support is a complex matter for a growing business. There’s no hard-and-fast rule on when a company should hire a CFO.

Little wonder that many businesses struggle to make the right decisions at the right time. Missing the crucial point when your financial infrastructure needs to ramp up can have damaging consequences.

The last thing you need is to be forced into hiring a CFO to help unpick the tangled knot of your financial affairs if something goes wrong.

And this can be a real issue if you’re seeking external investors, who will undoubtedly scrutinise your business. Their view of the firm will be coloured if they find its finances in disarray.

Taking on a CFO for the first time is a major milestone for any business. It doesn’t have to be a full-time hire, it could be an outsourced role or someone at a consultancy level. The trick is to hit that milestone at the right point on your growth curve.

Be alert to the key indicators that signal the need for a CFO. Are you ready to look for and secure a major round of investment? Is the number of active long-term customers increasing? Are you getting more referrals from your customers or looking to expand into a new market?

Hiring too soon could mean paying a premium for skills that aren’t yet needed, while leaving it too late could put your finances in a mess. But getting the right financial expertise at the right time can be of huge benefit to you and your leadership team – and to the future of the business.

Paying for the right person

Used in a strategic role, a CFO can help your company grow. The right person can help you secure finance and develop your business strategy, but be prepared to pay if you want to attract the best talent. You could offer a part-time role or could look to hire someone at a consultancy level. Alternatively, you could use a virtual CFO at around a third of the cost.

If you are looking for support to grow your business please get in contact with one of our team on 08081 722350 or drop us an email: G.Enquiries@uk.gt.com