Should you outsource vs. hire a CFO/CFO services? Why or why not?
1. Think About the Stage You’re In
“Early on, outsource to save time and money. If finances are not your core competency, it’s not worth getting lost in the weeds of accounting minutiae, especially if you’re just getting up and running. Eventually, you’ll get big enough to hire someone in-house.”
–ROBERT J. MOORE, RJMetrics
2. Focus on Your Core Business
“If your company has closed a seed round, is earning significant revenue, has a lot of expenses or is in high-growth mode, you need a CFO. In the early stages, you need to focus on growing your business, not on finance management — but it may be too soon to hire a CFO in-house. Hiring an interim, outsourced CFO saves on staffing costs while giving you the financial support and assurance you need.”
–DAVID EHRENBERG, Early Growth Financial Services
3. Outsource Bookkeeping, But Keep CFO Services In-House
“Outsource bookkeeping, but “insource” CFO services. There are two primary functions of CFOs at early-stage companies: bookkeeping and planning. Outsource bookkeeping, but not your planning.”
–ADAM LIEB, Duxter
4. Consider Other Options Within Your Team
“Many companies are choosing to outsource this position instead of hiring, as firms with budgetary concerns can save money by outsourcing and paying on an hourly basis. However, it’s not necessarily a go-to solution. If your company’s finances are rather basic, the duties can be sufficiently performed by the small business owner or another candidate within your existing team.”
–ANDREW SCHRAGE, Money Crashers Personal Finance
5. Initially Outsource Your CFO Role
“You really don’t need a full-time CFO until you are post-B round stage. We found a great part-time CFO, and having her outside the company saves us a lot of money.”
–JORDAN FLIEGEL, CoachUp
6. Hire Up
“Soon after we started our online publishing company, I knew that doing the books myself wasn’t working. We found a sharp, young MBA and economics grad — smart and hungry — who was just laid off from his corporate job. We hired him as our CFO, but we couldn’t pay his whole salary. Four years later, Tim is the CFO for my two companies.”
–TREVOR MAUCH, Carrot
7. Focus on Your Customers, First and Foremost
“In the early startup stages, your primary focus needs to be running the business and taking a “client-centric” approach to ensure that the customer is at the center of your business’ philosophy, operations and ideas. If it’s too soon to hire a CFO in-house, hiring an outsourced CFO saves on staffing costs, time and partner resources.”
–JEFF TESTERMAN, BROKERHUNTER.com
8. Offload Your Finances
“Offloading your finances to a company with an expertise in managing funds, like Next Level Now, Inc., allows you to keep your mind on “big picture” strategy.”
–JOHN HALL, Online Calendar
Article originally published by StartupCollective. Syndicated on KillerStartups.com with permission.
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StartupCollective
