The position of chief financial officer (CFO) brings many important values to start-ups. According to experts, start-ups should recruit CFOs as soon as possible.
According to Forbes, having a separate person in charge of the CFO position is extremely important for a start-up in its early days, even if this person only works part-time.
A study published by the US Small Business Administration (SBA) shows that only about half of startups survive after the first five years. One of the main reasons leading to the failure of start-ups is the lack of a solid financial strategy.
“CFOs bring invaluable expertise to start-ups, from preparing financial reports, to building capital raising strategies, to managing cash flow, thereby ensuring that your company is on the path of sustainable development", Forbes emphasized.
A survey conducted in the US also showed that 69% of small business owners lack confidence in their ability to make financial decisions. Instead of fumbling with financial numbers, business owners are advised to have a real CFO by their side. Decisions based on specific numbers made by the CFO will be a useful basis for founders to adjust the model to keep up with market changes.
In terms of capital raising, the CFO will know when the start-up should call for capital and how much capital is enough. Among many options, the CFO can advise the founding team on which option to choose to suit the start-up's development, as well as devise a plan to use capital effectively in the future.
A start-up that already has a CFO in its leadership team will have an easier time creating sympathy with investors, because it shows that the start-up clearly understands the company's financial situation and can produce reports. Clear and accurate finances.
Later, as the start-up expands, the CFO position proves even more important as financial tasks become increasingly complex, from payroll management, revenues and expenditures, to compliance with tax regulations, financial reports... If there is a CFO, implementing an effective accounting system will help founders save time and resources; On the contrary, the founder will easily be overwhelmed.
“Startups need to pay attention to money management. How much do you earn compared to how much you spend? I recommend hiring a CFO during your startup journey, someone who will help you analyze your past finances and advise on how to improve in the coming year. With this valuable knowledge, your chances of starting a successful business will be much higher", affirmed Charles Brecque, CEO, Founder of Legislate Technology Company.n
