cfo valuation idiya consulting

As you may have noticed, more and more small companies are either hiring a seasoned Chief Financial Officer (CFO), or outsourcing their needs to seasoned financial executives to leverage their strategic skill-set, implementing scalable solutions, and enhancing their overall valuation. This trend has increased dramatically within startup’s, driven from their intense need to maximize the utilization of their scarce resources.

Hiring a seasoned financial executive allows your organization to leverage their experience in not only identifying, but overcoming, strategic challenges, as well as avoiding potential growth impediments. This is critical - as your company grows, a CFO can help you navigate through a potential minefield of financial challenges, and ease the growing pains as your company increases in revenue, employee count, and valuation.

Finance executives also help you understand the pulse of your business in financial terms. A CFO can help you understand where your business is growing profitability, and more importantly, where it’s unprofitable. They will help minimize or mitigate margin compression, identify opportunities for cost reduction, and focus on your bottom-line within the guidelines you provide.

A seasoned CFO will, let me reiterate, WILL enhance your overall valuation by implementing processes that will instill confidence your organization, translating to real dollars. Whether you’re buying or selling a company, a CFO will pave the way and pay for themselves 10-fold (if they know what they’re doing) by enhancing the quality of earnings, supporting your projections with meaningful insight, implementing the right processes, and depicting the business in such a manner to derive the most value for your company during the due diligence process.

Outsourcing a CFO is also tremendously cost effective with average base salaries for CFO’s averaging over $175,000 per year, or over $14,500 per month. For a fraction of this cost, you can augment your executive team with a strategic partner focused on your vision and growing your company as fast as possible while minimizing the cost impact to the organization. Often times, CFO’s pay for their own time with the cost savings identified alone, and the uptick in valuation is an added plus.

Overall, a CFO can add great value while you still get to call the shots. A critical piece for success is for companies, and their owners, to be able to understand that change may be necessary, and to be ready to set the tone necessary to facilitate change management throughout the organization. Often times, this can be the most difficult part of the equation.

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