Securing reliable working capital in sufficient amounts is usually the top business challenge today for companies with revenues of $2–200 million. Viewed from a macro level, working capital constriction for this group of companies is a significant problem for the U.S. economy as a whole. Businesses of $2–200 million in revenue account for roughly two-thirds of private sector workers and 45% of business revenues in the U.S. according to U.S. Census data, yet less than 5% of capital markets activity is devoted to funding them, leaving a substantial financing gap. And that gap has only increased during the global financial crisis, which has further restricted access to capital — which has increased the risk of becoming unsustainable for some businesses.
The role of the successful CFO in an entrepreneurial company is to enable the CEO to fulfill their vision of building a successful company and creating success. Entrepreneurial CEOs who achieve their vision of growing great companies and creating success view their company’s finance function as a key enabler for the CEO and the company to be successful. The role of the CFO in an entrepreneurial company is to make a good CEO a great CEO. This is achieved through providing to the CEO financial leadership to shield the CEO from having to focus on financial risk. The CFO is an enabler to the CEO’s vision by ensuring the financial and operational aspects of the business provide the CEO the necessary support for decision making.
CEOs, owners and management of small to medium-sized businesses know their business and their customer needs very well. However, most businesses in this category have financial management needs that are beyond the knowledge, expertise or the experience of the in-house accounting staff. Most businesses in this category do not need either the large cost or the full time commitment of a permanent CFO. Turning to your CPA firm may help with limited scope matters, however, CPAs lack both the skills and experience that a talented and experienced CFO brings to the company. Companies in this category in general do not understand the benefits of engaging a CFO Consultant. CFO Consultants with the right skills and industry experience bring financial expertise to these companies at a fraction of the cost of a full-time CFO. The ROI to companies that engage a CFO Consultant can be huge.