Why I got into Part-time CFO work… and why I still think it makes sense
Early in my career, I was faced with a dilemma. I had joined a start-up medical device manufacturer as Controller about 7 months earlier but sensed they weren’t going to make it. They had an innovative product everyone wanted to try but the re-orders weren’t coming. After spending my initial months putting in the financial infrastructure — accounting and inventory systems, a forecast model, banking, payroll, and insurance – I wasn’t being kept busy.
I debated whether to stay or start a job search when I came up with a third option: if I could find a part-time assignment elsewhere, could I cut my hours back and reduce my salary accordingly? This way, the company wouldn’t lose me after such a short tenure and if sales rebounded, I would still be there. They would save money and I wouldn’t be underutilized and bored.
My company gave me the go-ahead and when a contact came through with a project at another manufacturer, I was off and running. For the next 6 months I split my time between the two companies until both reached a crossroad. My original company was selling its assets to another company and shutting down. The other company decided to hire a full-time person to do what I had been doing. They offered me the job but it wasn’t appealing to me, mostly because it was a larger company and I was already drawn to smaller, entrepreneurial companies.
The experience of splitting my time between two companies convinced me that this was a model that could work for many smaller and emerging companies. These would be companies large enough to have finance and accounting challenges beyond what their bookkeeper or accountant could handle but small enough not to need a full-time Chief Financial Officer (CFO). For me the appeal was the chance to work with smaller companies where I could work directly with the owner, see everything that was going on, not have to deal with bureaucracy, and be able to directly see the impact of my work. My clients would only pay for the work they needed done which would be a value to them and I wouldn’t have to worry about not being busy or challenged. I would get experience in a wide range of companies and though finding work would always be a challenge, there was excitement in knowing a new opportunity could be right around the corner.
At the time I chose this route, the idea of outsourcing a CFO, or in fact most roles, was a new concept. I recall people telling me that no business owner would trust his or her finances to an outsider. However, I knew of three people doing Part-time CFO work in the Boston area and reached out to all of them. They were all succeeding and gave me encouragement to go ahead.
So, in 1990, I hung out my shingle and dove in. Though my target was, and still is, long-term but part-time clients, early on, I worked more on projects. Eventually, I picked up a portfolio of the type of part-time clients I was seeking.
Nearly 30 years later, I’m still a part-time CFO. Typically, I’ll work with 4-6 clients at one time. The largest might be 2 days per week, smaller ones just 1-2 days per month. I’ve had several clients for over 6 years (the longest was 12 years) but I also still take on short-term projects. I’ve gotten the variety I was seeking: a wide range of industries from software to manufacturing to retail to non-profit. Situations from raising venture capital to life-style businesses to acquisitions to Chapter 11. Purely local businesses to those with offices on four continents. All in all, close to 100 companies: many rewarding success stories but also some disappointing outcomes.
Throughout this journey, I’ve never lost the conviction that the part-time CFO model makes sense for my clients. They all have someone doing the accounting basics: billing, payables, payroll. But at some point, they need something more. This might be raising financing, better reporting to management and stakeholders, forecasting and financial modeling, upgraded systems, help cutting costs and improving margins, compliance work, or other administrative areas like HR and incentive plans. Or any combination of these. However, their needs don’t require a full-time person. They also want to work with someone who has been there before, especially in other entrepreneurial companies, as opposed to someone out of a large company or CPA firm. This is the expertise and experience we can bring along with the passion for smaller and emerging companies and an understanding of what it’s like to be an entrepreneur.
If you think your business could benefit from a hands-on financial leader but on an outsourced, part-time basis please reach out to us. I hope we can assist on a cost-effective basis and maybe you’ll be that next rewarding assignment right around the corner.