As we enter into a new year, most SMBs are focused on one important thing: growth. Achieving that goal of growth can be challenging, particularly when your plate is full as a business owner. One solution many owners overlook is bringing in a CFO to help with strategic planning.
A virtual CFO can not only help with strategic planning but also help your business with cash flow management, financial analysis, and more.
Let’s take a closer look at why strategic planning is so important and how a virtual CFO can help.
Why Strategic Planning is Important
You have goals for your business, and strategic planning can help you get there. When done properly, your plan can lead to:
Improved Organizational Alignment
A strategic plan ensures that everyone in your organization is on the same page and understands:
- The direction the business is headed
- The business’s strengths and weaknesses
- Your goals and objectives
Often, strategic planning is a collaborative process, and this is where a CFO can step in to provide expertise and guidance.
A Greater Sense of Direction for the Business
Along with improved organizational alignment, strategic planning can also help give your business a greater sense of direction.
Where do you want your business to be in the coming years? What is your end goal?
When developing your plan, you may bring in vendors, analysts, or investors to provide insight into where the market and your industry are headed.
Having a roadmap through your strategic plan will further help ensure that everyone in your organization knows where you’re headed and how you’re going to get there.
Goal-Setting and Building a Competitive Advantage
Through strategic planning, you can set meaningful and realistic goals for your business that are measurable.
Measurable goals are quantifiable and have deadlines. For example, maybe your goal is to increase sales by 10% by the end of the year. At year-end, you can compare sales from this year to the previous year to see if you achieved your goal.
Often, strategic planning involves the setting of both short-term and long-term goals in order to realize the bigger vision for the business.
While you’re in the process of setting goals and planning, you’ll also be doing market research to get a better understanding of your market and competitors. Along the way, you may uncover new opportunities for growth or to fill gaps that your competitors are ignoring.
Through strategic planning, you can help your business set achievable goals and start building a competitive advantage that will benefit the organization for years to come.
Understanding a Virtual CFO’s Role in Strategic Planning
The work of a CFO on strategic planning can be a complete game-changer for business owners. You have an emotional attachment to your company and inherent biases. You can benefit from the help of a third party to better make operational decisions.
A CFO is the ideal candidate for strategic planning because they offer a multi-faceted approach that includes:
Providing Data to Decision Makers
Data-backed decisions will allow your stakeholders to make smarter, bolder decisions on the future of your business. A CFO can provide you with industry-relevant data, but their real strength is when offering information on:
- Accounts payable and receivable
- Cash position
- Sales
- Operational costs
Business Enabler
CFOs also use data to offer strategic planning as an enablement tool. Your CFO will take a data-driven approach that focuses on profitability and objectivity. For example, they can help answer key questions, such as:
- How will this decision lead to growth?
- Can the business afford to do this?
- How will a certain decision impact other areas of the company?
- What’s the actual likelihood of success?
Often, hard decisions are much easier when you have forecasts and numbers to back them up properly. A CFO can be a voice of reason and enable your business to make the right strategic decisions at an opportune time.
If you lack proper processes and procedures, your CFO can also put them in place for you.
Decisions CFOs Can Assist With
CFOs are more than high-level accountants. Your CFO is a strategic partner who can provide immense value to your business – if you value their input. Planning and decision-making work hand-in-hand, and these professionals can provide guidance for:
- Expansion. Your CFO can help you better understand the costs and upsides of expanding product lines or entering new markets. They may even help you find grants and incentives that can save you money.
- Relocation: If you need to relocate operations, your CFO can help you find cost-effective ways to reach your goals and even save money.
- Acquisitions and mergers: Due diligence, forecasting, financial modeling and other tasks can be offloaded to a CFO to help you make smarter, data-backed acquisitions and mergers.
A virtual or fractional CFO can even help with marketing initiatives, IPOs, and finding funding sources.
Why Work With a Virtual or Fractional CFO?
Hiring a full-time CFO may not be in your company’s budget or plans at the moment. Salary.com has the average salary in this field at $400k+, which is a major shock for small businesses trying to grow their operations.
A virtual or fractional CFO offers:
- Part-time help
- Flexible hours and rates
- Assistance when you need it
- No long-term commitments
Strategic planning and growth initiatives require a fresh set of eyes and a professional who will crunch the numbers and make data-backed decisions. Adding a CFO to your team – even on a part-time basis – can help you make the right, timely choices for your business.To learn more about the CFO role in strategic planning or how we can help you with our virtual CFO services, schedule a consultation now!
