At Amplify, we are growth consultants and an epic team of business leaders that help clients navigate all areas of their growth.
But let’s get to the heart of the matter – we are CFOs.
When do you Need a CFO?
Some call our perspective idealistic, but we built a business on the belief. You can bet it’s practical and confirmed with us!
Here is the criteria of an ideal client. These are the companies that need CFOs.
- Revenue that is currently >$1m
- Plans for Revenue >$5m
- Team > 10 people
- Banking or Investor relationship – leveraging the bank or investors for financing or growth
At Amplify, we believe you need a finance leader if you hit all of these criteria. Someone must have the accountability for the CFO role. We don’t believe there’s an exception when you have all four.
There are cases where you need a finance leader and don’t yet meet all of the four criteria above.
At a certain point, you may even need a traditional full-time employee on the payroll, but in the meantime, fractional and modern options are available. We wrote a blog on all kinds of choices.
Sometimes the best way to understand what you are – a Business that Needs a CFO – is to get a good grasp on what you are not.
A business that is not growing doesn’t need a finance leader. Your bookkeeper or accountant can do the trick if you have one location, minimal services/products and are happy to stay stable.
Cash is predictable if last year, this year and next year are all similar.
Financing isn’t needed if you aren’t investing.
If where you are is good enough and it’s working – don’t pay for a finance leader. A simple business can often find success with what they have.
For example, if you run a successful pizza shop on the corner and you don’t intend to open a 2nd – you likely do not need a CFO.
Revenue that is currently >$1m
When you have revenue under $1 million, you are often still working out the operational model and deciding who you are.
Your cash is tight, and what you pay has to be very limited.
We have many clients that earn less than $1m in sales, and we help them grow faster, but the practical truth is that many companies of this size need help to afford even fractional financial leadership.
Plans for Revenue >$5m
Companies usually make a mess of their books at $1-5m in sales, and part of the ceiling they hit at the $5m mark is a massive cleaning up of historical records.
It costs them time, money, and lost opportunities as they finally work on understanding their financial health and quantifying their strategy.
These growth entities would be further ahead, with less cost and risk, if they had brought on financial leadership earlier.
Team > 10 people
When you have fewer people than fingers, you usually can keep your eye on the prize.
You can rely on your gut because you can see who is doing what and where the resources are spent.
This big picture and detailed view translate to understanding the cash, the market, and the customers.
Sometimes bringing on an extra person for a close-knit team of that size feels more like an interruption and disruption than any ROI could be.
As you grow, you become more complex, and you can no longer make educated guesses or make all the decisions yourself. At that point, not having a clear view of your finances and cash can catch up with you.
Plus, time spent on money, finances, and accounting is time not spent on the team, strategy, and growth. Not a good use, right?
Banking or Investor relationship – leveraging the bank or investors for financing or growth
If it’s your money, then the help you need is based on your time and skillsets.
Even without a lender or investor, you are financially accountable to vendors and employees, but the lack of compliance and your complete control limits the need for a finance leader.
Once you have other people’s money trusted to you, it is crazy, in our idealist opinion, not to invest in financial leadership.
A second set of eyes and viewpoint helps grow a business and earn a profit.
Why bankers or investors fund companies without a finance leader confuses us here at Amplify!
So, there you have it. It is that simple, and we have seen the benefits of companies taking the plunge.
When you can access Fractional CFO services, you get the expertise of an executive that would cost you $200k+ in payroll without that investment. It’s practical because you get the time you need and not 60+ hours of leadership that your culture and people can’t keep up with.
If you want a traditional hire, our Recruiting team can help there too.
Many of our clients don’t have all four characteristics (yet) and they make the investment. It pays off.
Interested in learning more?
Watch our LETs episode on Navigating Business.
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