How a Fractional CFO Can Help Increase the Value of Your Business

May 12, 2022

At a glance

  • Main takeaway: Navigating growth can be a challenge for any size company. Finding support on a fractional basis can provide financial guidance and increase the value of your business.
  • Impact on your business: At some point, CEOs and business owners of growing companies in the lower middle market will come to the realization that they can’t do it all.
  • Next steps: Aprio’s CFO Advisory team can help you look at your business holistically, from a fractional basis and beyond.

Schedule a consultation with Aprio’s CFO Advisory team today!

The full story:

Nearly every company has been impacted by the pandemic, triggering a labor shortage that spans industry segments. Most of the discussion has been focused on the need for talent at the associate level; however, a more accurate statement would be the need for people at the associate level all the way through leadership.

This is especially true for lower middle-market businesses that need access to talent at the leadership level, specifically a Chief Financial Officer (CFO), which can be solved on a fractional basis.

What is a fractional CFO?

By definition, a fractional CFO is a part-time financial leader offered to a company for a fraction of the responsibilities, time and cost until they are ready to invest in a full-time, permanent CFO. In the lower middle market, CEOs and founders often find themselves on an island and a fractional CFO can bring objective financial experience to share in the responsibilities so that they do not have to go at it alone.

A fractional CFO could be the tipping point to grow the value of your business

The first step any fractional CFO takes is engaging the team and getting to know the business. By sitting down with the CEO or founder of the company, a fractional CFO can understand the whole journey — where they started, where they are today, and most importantly, where they want to go. When a clear vision has been established, a fractional CFO can develop a playbook of agreed-upon key initiatives and accountability.

Fully understanding every aspect of a company doesn’t happen overnight. That said, one of the fastest paths to creating an impact for a fractional CFO is to work alongside the leadership team to develop a 5-year business model, which will help to identify the key levers that will need to be pulled to increase the value of the business. This clarity could allow the company to establish attractive compensation packages to retain top talent, proactively manage cash flow, define a clear path for profitable growth, and strengthen their financial planning and analysis for more thoughtful decision making.

When to know if a fractional CFO is right for you

Determining whether you need a fractional CFO is situational and unique to each business. Yet, CEOs and business owners aren’t meant to do it all. Eventually, you’ll reach the growth stage and find that you aren’t fully prepared to manage and keep up with the pace at which your company is growing. This is where a fractional CFO’s expertise is invaluable.

The bottom line

Navigating growth with confidence can be challenging. It’s essential to partner with a trusted advisor who can holistically serve your business from a fractional CFO to beyond. Aprio’s CFO Advisory team can navigate you on your journey to financial leadership and support.

Aprio’s CFO Advisory team can advance your growth. Schedule a consultation today!

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About the Author

Eric Krucke

Eric, a former Berkshire Hathaway CFO, advises companies walking through transitions and transactions or seeking to accelerate growth. He has more than 25 years of financial leadership experience accelerating growth, navigating acquisitions, finding capital to fund growth, and facilitating successful exits for founders and investors, including a sale to Berkshire Hathaway. He’s seen time and again that the most important responsibility of a CEO or founder is to provide clarity, particularly during the first 100 days of an inflection point.