In 2022, Americans started more than five million new businesses, the second highest number ever! Not terribly surprising, though, as our culture so highly values entrepreneurship, with many in hot pursuit of the “American Dream”.

As an entrepreneur, you are a visionary - charting your own path in the marketplace. Of course you're brilliant. And hardworking. And with your grit and determination, you could likely do it all on your own. But, as one of the smartest leaders, you know that a bigger impact requires collaboration with a well diversified team of skilled professionals.

A team? Who's on the team? Well, we definitely want a Chief Financial Officer (CFO). They'll help you maximize opportunities, while mitigating risk, ensuring longevity.

But, permanent, full time C-level executives are expensive to hire. And, your business may not require full time assistance - making it difficult to realize the full benefit of the expense. This is where a Fractional CFO comes in.

A Fractional CFO is a financial professional who lends their expertise to small to mid sized businesses on a part-time basis.

These part-time CFOs have prior Chief Financial Officer experience, but unlike a permanent full-time CFO, they usually work with multiple businesses simultaneously. They are not employees of the companies they assist, meaning they don’t receive the same employee benefits (bonuses, health benefits, employer paid tax).

Businesses will typically hire a Fractional CFO as an independent contractor on a part-time basis. Leveraging a part-time or contract based professional allows flexibility with both cost and scaling, making it an attractive option for growing businesses with changing needs.

It's important to note that a Fractional CFO is not the same as an Interim CFO. An Interim CFO will take on the CFO role full-time on a short-term or project basis. Conversely, a Fractional CFO will work part-time on a prolonged or indefinite basis.

A Fractional CFO provides financial expertise and strategic guidance, helping businesses make informed financial decisions, improving their overall financial health.

Manage Financial Vision

As a business gets bigger, its finances become more complex. More complicated. And more time consuming. While you may be able to manage the financial tasks initially, at some point it becomes necessary to bring in additional support; a financial executive dedicated to establishing and fulfilling your financial vision.

The right Fractional CFO will take great care in understanding your Mission, your Vision, and your Values. And in doing so, will assist in operationalizing your vision, creating a scalable and sustainable footprint, propelling your business forward. Your Fractional CFO will create a financial strategy to ensure ongoing success.

This includes:

• Formalizing Your Vision & Strategic Planning
• Transforming Numbers Into Insight
• Driving Thought Leadership with Stakeholders
• Optimizing Your Cash Position
• Leading Financial Planning & Modeling
• Managing Investor Relations
• Establishing Governance
• Mitigating Risk

Optimize Strategy

As your business grows and changes, strategies must also evolve. Fractional CFOs are central to the development and optimization of financial strategies that drive the success and growth of organizations. Their role extends beyond traditional financial management to providing strategic leadership and guidance, making them indispensable members of the executive team.

Implement Systems

As your organization evolves, its financial systems' needs change. Fractional CFOs play a key role in implementing financial systems within organizations. These systems are designed to streamline financial processes, improve efficiencies, enhance data accuracy, and provide better financial insights.

Fractional CFOs are responsible for the entire lifecycle of financial systems within an organization, from selection and implementation to ongoing management and optimization. Their involvement in this process is essential for ensuring the organization's financial operations run efficiently, effectively, and in alignment with its strategic objectives.

Raise Capital

Expanding your business often requires capital. Yet, raising capital is  something you:  1) may not have time to dedicate to the process or 2) may not have experience with. A Fractional CFO will step in to handle the tasks in your fundraising rounds, like:

• Company Valuation
• Due Diligence
• Investor Relations
• Systems Integration

Navigate an Audit

Audits are essential for ensuring financial accuracy, regulatory compliance, and accountability within organizations. They help identify risks, mitigate fraud, and provide valuable information for decision-making and strategic planning. And, they're a critical tool for maintaining trust and credibility with stakeholders and the public.

Executing an audit may sound daunting, but it's not. Your Fractional CFO will play a crucial role in navigating financial audits, ensuring that the audit process is smooth, efficient, and accurate. They will work  closely with the audit team to facilitate a successful audit process, managing and coordinating all audit related activities within the organization, maintaining financial transparency and ensuring compliance with regulatory requirements.

There are several reasons why businesses might leverage a Fractional CFO.

Some include:

• Establish Strategic Financial Vision
• Craft New Business Plan
• Raise Capital/Manage Investor Relations
• Facilitate M&A Transaction, (Expansion, Divestiture, Succession)
• Establish Governance
• Mitigate Risk

When your business works with a Fractional CFO, you should receive the full benefits of having an in-house CFO for a fraction (ie, Fractional) of the financial burden. It's important to note that the average CFO annual cost is approximately $600,000, including salary, benefits, and employer related payroll taxes. And, many small to mid sized businesses simply do not require a permanent, full time CFO, making it difficult to realize the full benefit of that expense.

Hiring a Fractional CFO provides access to the expertise and financial support, while offering the advantages of cost-effectiveness, flexibility, and customized support. Clearly, a strategic move for businesses looking to enhance their financial management without the long-term commitment of a permanent, full-time CFO.

Whether your business's growth goals are large or small, a Fractional CFO will guide you toward achieving them, informing you of the financial elements your business needs to succeed.

With precise financial oversight, you will better understand your business’s market position, mitigating risks while while making growth-minded decisions.

Even better, an experienced CFO with a diverse work history will have an extensive network of professionals - attorneys, bankers, risk managers, estate planners and the like - that will further benefit your business.

Michelle Delker is the Founder and CEO of The William Stanley CFO Group. She is an experienced CFO, with a Strategic CFO Certificate from Wharton Executive Education, a Florida Licensed CPA, and holds a Master's Degree in Accounting from the University of Tampa, and a Bachelor's Degree in Accounting from Simpson College.

During Michelle's twenty years in Finance, she has held key roles with several well known organizations in the Tampa market, having spent close to a decade with publicly traded, Fortune 500 companies before transitioning to the private sector. Almost immediately, she began noting similar challenges throughout various industries  - whether a $50M domestic start up or a $300M healthcare enterprise - top leadership contended with similar challenges; lean finance teams, struggling with competing priorities, often resulting in a lack of clarity and missed opportunities.

In 2022, she founded The William Stanley CFO Group to remove obstacles, providing the clarity necessary to optimize small to mid-sized organizations - diversifying offerings, bolstering margins, and managing risk - ultimately increasing enterprise value, and advancing these organizations to the next level.

It's undeniable - hiring a Fractional CFO offers a wide range of benefits, making them a valuable asset for businesses of all sizes. Providing financial expertise, flexibility, and cost-effectiveness, your Fractional CFO will enhance your financial management, contributing to the overall success of your organization.

Interested in learning how our Fractional CFOs can advance your business? Schedule a consultation with The William Stanley CFO Group today!!