Updated: Sep 12, 2022
Financial adversities can hit social impact businesses at any time. No matter what the problem is — sudden market changes, insufficient cash flow, or an unexpected expense — the ability to recover from difficult financial times is essential to continue your purpose. And when your finances are going into the red, it’s easy to panic and make rash decisions that could cost your mission-driven business dearly.
By providing guidance and support when money woes hit, an experienced fractional Chief Financial Officer (CFO), who shares your values and missions, can help you get your business back on track. They can help you focus on your purpose while ensuring your business is growing in a healthy way. Not every founder has the expertise to navigate financial adversities. Rather than hope your finance team can adapt in time, why not find someone well-versed in managing the changes in a dynamic market and who knows the importance of staying true to your company’s mission? That’s where outsourced fractional CFO services shine.
Let’s explore how a fractional CFO can help you thrive and continue persevering toward your purpose.
What exactly is a fractional CFO?
It’s time-consuming to analyze your finances and financial plans, while you are also focusing on making this planet a better place. But staying on top of your finances is essential, especially for a social impact business, if you want to make the right decisions to steer your business to success.
When you are struggling to balance between purpose, cash flow and profitability issues, this is where the right fractional CFO can help you.
A fractional CFO is not the same as your accountant. He/she is a financial strategist that provides access to high-level strategic planning, cash flow management, accurate financial reports, and deep financial planning and analysis.
You would think they would be expensive with so much value they can offer. But the part-time nature of a fractional CFO means that they cost less than a full-time one while still providing similar (sometimes even better) services. That allows you to direct your budget and attention more toward your business mission and purpose.
Is your social impact business ready for a fractional CFO?
You may want to consider hiring a fractional CFO if you…
- … need to stay on top of your finances. Are you having any cash flow issues? Profitability challenges? Lack of clarity with your business finances? Other financial roadblocks? A fractional CFO can help fix or even predict financial concerns.
- … are looking to scale. A fractional CFO can help you create a strategy and modify your business model to scale sustainably while staying close to your social impact.
- …need someone as passionate as you in creating impact. A fractional CFO with the same passion for creating social change can make or break your business finances. Having someone to work on your numbers while helping you stay true to your mission can be a strong foundation for a sustainable business for good.
How will a fractional CFO help fix financial adversities?
Proper financial foundation
No long term strategy can work without a proper financial foundation. It starts with strong financial processes surrounding the creation of your financial results. The right fractional CFO will set up the right processes to ensure you have a solid financial foundation so your mission-driven business can help the world long-term.
Increase profit margins
If your profit margins are not where it should be, then a fractional CFO can shed some light on where the problems are. You can get to the roots of the problem faster because you have a partner with extensive financial knowledge and skills.
A great fractional CFO will immerse themselves in your purpose. They’ll understand you, your people, and what change you want to offer the world. That means they can recommend decisions considering both your company’s social impact growth and financial health. You can be confident when you decide on capital investments, how to scale the business, or what are the relevant risks you need to consider so you won’t be wasting valuable resources.
Better internal controls
A fractional CFO ensures you have timely and accurate financial statements. He/she helps manage your assets effectively and reduce your risk of fraud.
When a fractional CFO handles your business’ financial functions, you’re free to focus on other tasks that enhance value and drive more impact while not forgetting profitability.
They promote productivity by reviewing the processes and systems of your social impact business and identify opportunities to streamline processes.
It’s good to be agile enough to address financial problems when they come up. However, working with a fractional CFO means you know what is ahead of you and how to overcome the financial problem before it’s too late. They will also view everything as an opportunity to serve your purpose. Will this event help your mission? Will this news impede your social impact on businesses?
Maximize your vision and purpose
The right fractional CFO for your business will understand why your social impact business does what it does. That means your vision and purpose are at the forefront of their strategies and business models. Whatever they do and recommend, it’s always to help you focus on three things: people, planet and profit.
He/she is your ally when you are faced with adversities. You don’t have to face the financial problems alone — it’s best to have an expert beside you.
We at Profit Reimagined Inc. pride ourselves on our curiosity, expertise, and empathy. We take the time to understand how your social impact businesses work and why you do what you do. Then, we use our expertise to amplify your social impact, create a business that you love and maximize your profitability.