The Benefits of a Fractional CFO for Women-Owned Businesses

Podcast: CFO Weekly

Episode Title:  The Benefits of a Fractional CFO for Women-Owned Businesses 

Host: Megan Weis

Episode Guest: Kathy Svetina

Episode Date: Dec.20, 2022

Listen Here:
Apple Podcasts: https://podcasts.apple.com/us/podcast/the-benefits-of-a-fractional-cfo-for/id1511978445?i=1000590728634

Spotify: https://open.spotify.com/episode/138sV8p7y6axjdXrMFj9ZF?si=174ff2ace0c14221

Looking to build an efficient accounting team so you can focus on strategy and business growth? As the role of the CFO changes to include long-term performance-driver, all-knowing technology expert and full-company strategic guide, more and more accounting leaders are left overwhelmed. Join us as we talk to CFOs, Controllers and other industry veterans who share their expertise on how to streamline accounting processes, create established efficiency and move to a data-driven model, allowing you to tackle what matters.


CFO Weekly is brought to you by Personiv, a high-quality, people-powered solution to all of your accounting needs. From procure-to-pay and order-to-cash to record-to-report, and from transactional to Controller-level support and more. Personiv goes above and beyond to get results with a team as small as one in our offshore, cost-saving model.


About this episode

Running a business can pose financial challenges, particularly for those undergoing rapid growth. Many business owners at this stage find themselves struggling or too overwhelmed to manage their finances. This leaves them at risk of breaking that growth momentum – and even the long-term success and profitability of their business. 

In a recent episode of the CFO Weekly podcast, host Megan Weis and her guest Kathy Svetina discussed how Fractional CFOs  can be instrumental in driving your business forward by focusing on financial analysis and strategic planning. Kathy is the founder of NewCastle Finance, which offers Fractional CFO services for growing businesses. 

She broke down the essential functions of Fractional CFOs, particularly their role as storytellers who can translate complex financial data into actionable insights. She also spoke about why staying curious and adaptable is important, especially in the world of business finance.



Key Insights from CFO Weekly Podcast

7:48 The key benefits of Fractional CFO services

14:42 Financial challenges faced by small business owners 

16:34 CFO skills needed to handle corporate finance and entrepreneurship

18:43 The role of curiosity and adaptability in business finance

20:18 The Fractional CFO as a storyteller


The key benefits of Fractional CFO services

A Fractional CFO offers strategic guidance and support in critical areas like setting your budgets and forecasts and planning for your future. They can also help you make sure that all your business decisions are aligned with your long-term goals. 

Because they always have their eyes on your objectives, they can help you identify potential red flags and help you seize growth opportunities with confidence. Whether it’s securing funding, building your financial models, or attracting investors, Fractional CFOs provide tailored financial insights to the specific needs of your business.

If your business is in a major growth stage, Fractional CFOs can also help with key decisions like how much you plan to expand, whether can you afford to increase your staff, and how to improve your operations. They bring clarity to financial management, especially if your business has surplus cash, making sure that you are using your resources wisely.  

And finally, it can get very lonely being an entrepreneur and running your own business. Having a Fractional CFO by your side can break through this isolation as they provide the insights you need, serving as a reliable copilot for your journey towards business success.

“A fractional CFO is a great way to get that expertise for a fraction of the time, a fraction of the cost. They’re able to “cross-pollinate” ideas and financial models or whatever it might be and bring those best practices to your business.” – Kathy Svetina (10:39)

Financial challenges faced by small business owners

Some of the challenges small business owners have to deal with in managing their finances and planning for growth include:

  • Lack of financial structure and planning

Many entrepreneurs struggle with establishing a solid financial foundation and mapping out how to achieve their business goals.

  • Uncertainty about the future

Without clear financial goals and forecasts, small business owners find it difficult to really think far ahead, missing out on opportunities and sometimes even running straight into threats and obstacles.

  • Anxiety and hesitation

The absence of expert guidance and support leaves entrepreneurs feeling overwhelmed and unsure about what they should do next.

“I always say that everything that you do in business ends up in your numbers. So I think it’s important that as a practitioner, you are curious.” – Kathy Svetina (18:45)

CFO skills needed to handle corporate finance and entrepreneurship

Here are some key skills and attributes that Fractional CFOs need to thrive as entrepreneurs as well as working with them.

  • Versatility and Adaptability 

Unlike the corporate world where responsibilities may be more siloed, Fractional CFOs in small businesses must have a broad skill set and be adaptable to handle various tasks. They need to be comfortable and willing to take on different aspects of the business, from sales and operations to marketing and beyond.

  • Holistic Approach

Fractional CFOs thrive by embracing a holistic approach to business management. They understand how different functions and departments interconnect. This broader vision allows them to identify opportunities for growth and anticipate potential challenges.

  • Proactive Problem-Solving

Without the safety net of a large corporate structure, Fractional CFOs working with smaller companies need to be proactive in identifying and fixing potential issues. They need to be aware of any issues and problems and implement strategic solutions early on before things get worse.

  • Entrepreneurial Mindset

While the traditional image of a CFO is someone who only deals with the numbers, Kathy believes that CFOs should have an entrepreneurial mindset. This means being creative, innovative, and willing to take calculated risks. By being open to other ideas, they can further drive business growth and profitability.

“Fractional CFOs are internal consultants to businesses. We might not be able to fix all the problems but we can figure out who we need to bring in. We can see potential issues or “yellow flags” and we want to fix them before they become huge problems or “red flags”. – Kathy Svetina (20:52)

The role of curiosity and adaptability in business finance

Kathy discussed how curiosity and adaptability should be part of a Fractional CFO’s toolkit. She encourages Fractional CFOs to stay curious and to keep learning, seeking knowledge beyond the finance world by exploring different industry events and literature such as topics related to sales, HR, marketing, and operations among others. This can help them gain a deeper understanding of what your financial data says about – and how it affects – your daily business operations.  

Adaptability is also a key trait for Fractional CFOs. Sometimes, even the best-laid plans don’t exactly work out and challenges come up unexpectedly. Your Fractional CFO needs to be flexible to be more effective and willing to adjust strategies if needed.”

“I’ve seen that in my own practice, I do my best quality work when I have that peace and quiet when things are intentional. That’s where I’m able to focus on doing the high-value work, not just doing the busy work.” – Kathy Svetina (23:42)

The Fractional CFO as a storyteller

In the past CFOs were mainly seen as bean counters, crunching numbers and processing financial data. But times have changed. Now, they’re the storytellers of the business, weaving together its financial narrative with the aim of growing it and driving it forward.

This means your Fractional CFO should do more than just identify problems; they should be solution-oriented and encourage collaboration between the various departments.  As Kathy said, “It’s not just throwing it to the other departments –  but being the liaison between finance, the other departments, and the owners to figure out the best approach.”

With her background in FP&A, Kathy is seeing a trend towards internal consulting, both in big corporations and with independent Fractional CFOs catering to smaller companies. She sees Fractional CFOs like herself as more than just numbers people but problem solvers. So what are the problems? What are the solutions? And while they may not have all the answers, your Fractional CFO should know who to call, who to bring in to help, and what conversations need to take place to nip issues in the bud before they become bigger problems. 

Summary

  • Fractional CFO services offer financial planning and analysis, including strategic tailored guidance in budgeting and forecasting, identifying red flags, and seizing growth opportunities, which are all crucial for growing businesses.

  • Small business owners face financial challenges due to the lack of a financial structure, not knowing what to prioritize, and the absence of expert guidance leading to anxiety, lack of confidence and hesitation.

  • Fractional CFOs should have a holistic approach to the business, proactive problem-solving abilities, an entrepreneurial mindset to thrive, and the ability to adapt to various tasks to help drive growth.

  • Curiosity and adaptability are essential for Fractional CFOs, allowing them to gain a deeper understanding of how the finances affects operations and to have the  flexibility to adjust strategies.

  • Modern Fractional CFOs act as financial storytellers, fostering collaboration within the owners and various departments, and helping solve problems by knowing when to seek expert assistance.

If you’d like Fractional CFO support for your growing business, click here to schedule a consultation.


Transcript

Read More
Table of Contents