Founding and growing startups come with many challenges. Carefully balancing the timing of hiring key staff while saving limited resources can ensure the business survives and grows. Outsourced CFO services during the growth stage are one way to start getting your startup’s finances in order when you’re not ready to hire a full-time CFO. Here, we’ll examine how outsourced CFO services can benefit startups and create a foundation for sustainable growth.
Build a solid foundation from the beginning
For business owners and startup founders, minimising costs in the beginning is a priority. The early stage, and particularly the growth stage in startups, is an important time to ensure the correct financial processes and procedures are in place to keep the company on track, prevent errors, and meet compliance obligations. Without having the expense of a finance team or a full-time CFO, outsourcing CFO services will help to set up a wide range of processes to ensure your startup stays on top of financial reporting, implements rigorous cash flow management, ensures accurate financial statements, and meets tax compliance obligations. The CFO will also set up KPIs from the start to keep the company on track and watch for warning signs of trouble.
While a bookkeeper or accountant can provide basic financial reporting, such as balance sheets and profit and loss statements, an outsourced CFO can provide valuable financial advice to improve business performance and meet strategic objectives. This includes more advanced assistance, including cash flow forecasting and financial modelling.
Reduce costs in the early stages
When startup cash is limited, minimising expenses is crucial. With the average annual full-time salary for a CFO in Australia at around $230,000, hiring an in-house CFO is not feasible for many startups. In addition, a full-time CFO will often require a support team, which adds to the cost. An outsourced CFO can help you limit this expense by only getting the level of CFO services you need. In the early stages of your startup, it might only be 10 to 20 hours per week.
Whatever your requirements, outsourced services enable you to get the assistance you need. You can also avoid the long and costly search and hiring process required to find the right full-time CFO and the cost of hiring the wrong person for the role. According to Robert Half, hiring the wrong person can cost you up to 21% of their salary in lost revenue, productivity, and more. If your startup is ready for a full-time CFO, we also provide an outsourced solution to meet your needs.
Get years of experience without full-time commitment
Outsourced CFOs work across a wide range of industries, helping clients overcome diverse challenges with their extensive knowledge and practical experience. By leveraging this expertise, you can receive top-tier financial advice. Our partnership with Chat Thai is a testament to this commitment.
“We were encouraged to use Equil by another successful food & beverage operator whose business had stabilised and expanded after switching to Equil. After meeting Kapil in 2018 and learning of his family’s extensive food & beverage history it was clear his expertise would allow my team to redirect our energy to critical business strategy safe in the knowledge that Equil would provide Chat Thai with industry-leading structural and accounting advice and an experienced back office support team. Without doubt, Equil has helped us navigate through the most challenging trading environment faced during Covid I and II and we look forward to taking our business to the next level with Equil.”
Matt Anderson, Managing Director of Chat Thai
Enable clear communication internally and with investors
In addition to crunching the numbers and communicating with directors, a CFO will communicate your financial position and prospects to current and potential investors. Active participation by the Chief Financial Officer (CFO) in investor communications is vital for effectively presenting a company’s financial narrative. As the highest-ranking financial officer, they possess unparalleled insights into the organisation’s history, current financial position and prospects. An outsourced CFO will use their financial expertise and leadership to craft investor messages, enabling your startup to establish credibility, trust, and transparency with stakeholders.
Equil Advisory assists in preparing for capital raising by:
- Having up to date financial records ready for due diligence by potential investors
- Ensuring the company’s corporate governance are in order
- Assisting with financial analysis and forecasts to include in pitch decks
- Being part of the process to provide relevant and accurate data on a timely basis.
Get scalability and flexibility for your business
While you can start small, you can also scale your outsourced CFO services as your needs change. For example, when going through a round of capital raising, you’ll need increased assistance from a CFO to improve reporting and financial controls and provide strategic advice. When undertaking capital raising, some key activities can be assisted, such as preparing books ready for due diligence by potential investors, ensuring the company’s corporate governance is in order, preparing a financial analysis forecast, and ultimately being part of the process to provide relevant and accurate data on a timely basis.
As a fully flexible service, this can be scaled back as your needs change. If all goes well, you will scale up to a point where you can hire a full-time CFO. In the meantime, you can get the services you need while staying within your budget.
Leverage an outside perspective with an outsourced CFO
Sometimes, full-time staff can temper their views to align with their employer and avoid ‘rocking the boat’. One of the benefits of outsourcing CFO services is to get an outside perspective that’s not affected by interpersonal relationships in the business. Based on standardised reporting and business performance analytics, an outsourced CFO will provide objective and unbiased advice on what’s best for company growth.
Focus on your core business as a startup founder
While keeping up with your finances is important as a startup founder, your focus should be on building and growing your core business. By outsourcing CFO services, you can delegate the time-consuming and complex task of financial management to a team of experts – including directors and senior accountants – that’s always ready to help with deep knowledge and resources. This enables you to concentrate on what you do best – creating and developing great products and services to grow a successful business.
Discover the benefits of outsourcing CFO services with Equil Advisory
If you’re looking for strategic advice and financial support for your startup, an outsourced CFO solution from Equil Advisory can help your business accelerate strategically during its growth stage while staying within your budget. Our expert team of tax and advisory specialists can offer the needed expertise and support to drive long-term profitability and establish a sustainable business. With our guidance, you can streamline your financial management processes, make well-informed decisions, and position your startup for success.
