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A Checklist to Help Determine if Outsourced CFO Services Make Sense for You

If you are like many small and mid-sized business owners, you suspect that you possibly have use for a CFO, but have trouble justifying the large expense of retaining someone full time to serve that role. Consequently, you may have considered outsourced CFO services instead, but how do you tell whether or not this will be enough time to get the work done that you need completed? Here are five factors you can evaluate to determine if a full or part time CFO is right for you:

• Are you in a period of explosive growth? – If you are experiencing massive growth (this is relatively arbitrary, but say 50%+ annually), you should consider having a CFO on board during this period to help you grow sustainably rather than bursting into bottlenecks.

• Are you about to engage in a massive financial transaction? – When your business is looking at an acquisition, or possibly issuing stock in an attempt to raise capital, you want to have a CFO around to make sure all the important details are addressed.

• Are you having problems with overall cash flow? – Outsourcing your CFO services when you notice ongoing cash flow problems can be of a huge benefit to your company. They will identify problems and advise you on how best to fix them.

• Is your business overly complex? – Some particular businesses and industries have additional factors which increase their overall complexity. If you have a special set of circumstances, CFO services can really assist you with your reporting and documentation.

• Are you in need of a lot of high-level regulatory assistance? – If you have specific tax law to comply with that is more difficult than average or you work in a heavily regulated industry, you often want a CFO on your team to ensure your compliance with all your legal obligations.

Now that we’ve seen a brief checklist, what does this mean? In general, if none of these factors apply to you, you can probably safely forego hiring a CFO at this time. In 1-3 of them apply to you, consider outsourced CFO services. If 4 or all 5 of these apply to you and your business, you should think again about retaining a full time CFO, because you likely have enough work to justify the expense of one.

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Nate Nead
Nate Nead is a licensed investment banker and Principal at Deal Capital Partners, LLC which includes InvestmentBank.com and Crowdfund.co. Nate works works with middle-market corporate clients looking to acquire, sell, divest or raise growth capital from qualified buyers and institutional investors. He is the chief evangelist of the company's growing digital investment banking platform. Reliance Worldwide Investments, LLC a member of FINRA and SIPC and registered with the SEC and MSRB. Nate resides in Seattle, Washington.
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