Start-ups really don’t need a chief financial officer?

chief financial officer (CFO) plays an important role in the modern enterprise, the traditional experience that large company or listed company is only necessary to hire a senior CFO, and several other senior administrator for the company development strategy. However, in this paper, the author thinks that entrepreneurial firms may be better than a mature enterprise need the wisdom of the CFO. Have been slow to CFO start-up, is likely to miss the best development opportunity.

many startup founder and CEO at the beginning will not spend too much time to think to hire a chief financial officer. When it comes to enterprise’s financial problems, most founders are more likely to think of the current situation: I how much is the rate? My money can also maintain the company operation how long? Our annual revenue (ARR) is ideal? We also need to how much financing?

as a in the past ten years has sold entrepreneurs of the two companies, I really hope that according to my personal experience, when here to hire our chief financial officer (CFO) my opinions about this problem. Entrepreneurs usually can’t be in the first place to consider these complex financial problems, until they get some meaningful success – have launched the products system, good relations of cooperation, the future development of the enterprise to enter the international market as well as reliable and stable income growth – until they have to face the CFO this question, they will realize the importance of the CFO.

conformist equal circumscribed

so, what time should be set for the company’s chief financial officer of this position? Until recently, we still keep the old consistent attitude, think that before did not have any substantial profits, pay cost to hire a chief financial officer is not too much significance for start-ups. To be meaningful and what time? Or how to define the substantial profits? Based on past experience, annual revenue more than $100 million, or the founder and shareholders officially considered plan company public, or the great change of current assets, etc., if your company can achieve such a state, then it is time to consider hiring a rich experience of the financial director.

but the things always in transformation, constrained by the past experience and lessons of equal in the past. One of the most important one of the reasons is the responsibility of chief financial officer and the enterprise’s financial structure has different from the past. If you don’t realize this, so it’s hard to adapt to today’s market environment. As we can read almost every day, chief financial officers were laid off or fired the news, the most representative examples occurred in green pharmacy (the first big pharmacy chain) and the city of Detroit (2013 bankruptcy of the famous American cities). As a result of the traditional concept is deeply ingrained, the past companies “financial executives” situation in today’s situation is very difficult.

in the past, the company’s financial department’s main job is to track and report financial results, quarterly check and control the company’s financial expenses. Nowadays, however, companies hope that their financial department to share more of the risk and responsibility. A competent financial executives need to understand that the budget is not just a simple spreadsheet and budget, a perfect budget will also cover data, decision making, and human resources, etc. A competent financial executives need to cooperate with other departments, to create a new growth model for the company, adequate coping strategies for unknown situation, combined with business, will be the new scheme to bring new revenue opportunities for the purpose of the deployment of resources and investment plan etc. To take one recent example, a famous social networking site Twitter CFO Anthony Noto (Anthony Noto), he just took over the job last summer, he recently for Twitter released news new strategic products.

chief financial officers are changing, because modern companies like Twitter is a data oriented real-time environment. This requires that the financial work closely with other departments of the company, its core financial planning and analysis (FP& A) beyond the limits of single professional pure financial sector, and communicate these information directly to A line manager, because of their actions and decisions will directly affect the company’s revenue and expenditure, the more effective information is rich, the more precise their decisions. And all of these responsibilities, the area of responsibility of the financial officer more than ever, and more demanding on professional level. Therefore, it is imperative to conveniently change.

new order, new countermeasure

these changes also shows the company in the direction of financial talent strategy change. Unlike previous selected, when recruiting chief financial officer, your body, decrease the standard.

action as soon as possible. don’t wait until your company plans listed or significant other things are you going to plan when to set out to hire a senior financial experts to manage your finances. The result will not only make you waste at least a year to strategic planning, but also missed a crucial period of time. You can’t imagine you miss this year strategic plan, is likely to make your company in the next few years there were better benefits, and that only a few months time, you could have been used to determine the target market, your most valuable resource as well as the most significant investment for you. So, when you are in for the new customers, partners, business unit, and adjust the structure of your organization, distribution channels you may have missed the chance to be decisive. One more thing, the longer the delay, your CFO in the job at the same time as the challenges faced by the greater.

decrease the standard. entrepreneurs usually goes into a myth, that only experienced chief financial officer was able to run for the company to create a good financial system. (2013, chief financial officer of an average annual salary is generally above $200000, the number is not difficult to accept for entrepreneurship.) But in fact did not need to do so, you can let other have professional financial skills — such as your main meter long, vice President or chief financial officer – to the important duties of a company foundation structure. And you really need to look for is capable of data, decision-making and human resources of the special relationship between these three people.

is not only financial director level experts can be competent company plan, budget, and forecast the work, an intermediate financial experts to provide managers with the necessary data and analysis, to help them understand “hypothesis may be” data and take advantage of these predictions. For a long time, this kind of work is the responsibility of the finance department. Appropriate technology and have corresponding professional knowledge staff, coupled with the information provided by the internal resources and external customer feedback data, can acquire to promote comprehensive changes in the real-time information in enterprise management. Internal resources available from, NetSuite or Marketo access these websites, and customer feedback information can be collected from Facebook or LinkedIn. Even supply chain or the forecast of these tiny updates can also be added to the real-time information changes.

every day, I can see those companies collect real-time information changes, though they have no intention of public offering at present (or hire a CFO). They didn’t well-paid chief financial officer, they just give the task safely to an understanding of data and personal contact between people – the people’s duty is to make everyone involved in the company’s financial plan. When eventually hired chief financial officer of time arrival, I can bet your new chief financial officer will sincerely thank you for your team, because than they used to take over the mess, your team showed them the structure of a perfect cooperation system, greatly reduce the workload after taking office. This strength enough to shake them to leave the previous company to join your business group.



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