Outsourcing a fractional Chief Financial Officer (CFO) is becoming more common in cannabis. As the economic downturn impacts operations around the country, finances become the top concern of cannabusiness operators.
With the state of the economy, hiring a fractional CFO is now more than an option for some small business owners; it’s a necessity. However, in this article, we’re going to make the decision to hire a fractional cannabis CFO just a little bit easier.
Here are 5 benefits worth considering before hiring an in-house CFO for your cannabis business.
#1: Hiring a Fractional CFO is the Economical Choice
Qualified cannabis CFOs don’t come cheap, and finding the right one for your business will require some dedication. Posting a listing, screening potential candidates, and bringing them in from throughout your area for interviews – even the time is a costly investment. If your canna-company has never employed a CFO, the operational inefficiencies also add to the cost.
Even after finding a part-time cannabis CFO, there’s no telling whether the professional is a good fit for the role until after they’ve started working. Then, if they’re not the right fit, the process begins again.
But sometimes, the process of hiring is simple. Even then, a CFO’s salary and benefits don’t come cheap. Depending on the area you reside, the cost of having an in-house cannabis CFO is estimated at up to $578,054 annually between the salary and benefits.
Bringing on a part-time cannabis CFO is the economical option because recruitment and hiring costs aren’t as high. You can test a candidate as your outsourced CFO to see if they’re the right fit. If they’re not, you can move on to the next candidate.
Also, since a fractional CFO is a third-party employee, they don’t receive benefits or costly perks. You don’t have to incentivize retention for a part-time CFO because they still can work with other clients while working with you. This translates to your part-time team member earning more as they can dedicate time to helping other clients.
#2: Using a Part-Time CFO Makes Scaling Easier
Your part-time CFO is the entry point your cannabis operation needs to begin scaling. Rather than spending the money on someone in-house, you’ll use their labor as much or as little as you need, while taking your current financial and business goals into consideration.
Some seasons might be busier than others, demanding more time from your outsourced CFO. Other times, you might need to scale back their services to fulfill some other financial demands. Regardless, when you have a part-time CFO, you can allocate funds to increase their focus on your cannabusiness or to boost another aspect of your business that promotes its scalability.
Managing transitions becomes easier, allowing you to focus on scaling whenever the time comes. Financial challenges in this industry can make or break a business, meaning it’s crucial to consider how hiring part-time will benefit your business.
Hiring a part-time CFO is even an option for as you’re going through these transitions. For instance, if you’re trying to secure outside financing or expanding into new markets, it might not be an option to bring someone in full-time. However, a part-time CFO is a viable option to fuel your cannabusiness’s growth.
#3: The Right Fractional CFO Provides Immediacy to Cut Costs
Time is money, and if you hire a fractional CFO that saves you time, that team member is saving you money. The immediacy of hiring a part-time CFO saves costs by limiting the time spent searching for your new hiree.
This is someone who immediately comes in to fulfill your business’s financial needs. Without the exhaustive search for a full-time CFO, it’s an option to allocate it towards other important business matters.
Another instance of fulfilling immediacy necessities is if an existing CFO suddenly leaves your business. Bringing on a part-time cannabis CFO ensures you can continue your operations without any hiccups or delays.
#4: A Part-Time CFO Provides a New Perspective
As a cannabis business operator, it’s easy to get “tunnel vision.” Sometimes, we can become so focused on managing the business that we forget to think outside the box. However, bringing on a fractional CFO offers a new opinion that can add to your business’s success.
Desires and plans can impact the way your team thinks. An outsourced CFO cuts through the day-to-day operations, providing the viewpoint of an outsider.
Often, these part-time team members can offer impartial advice that brings your business’s operations to the next level, as well. For difficult decisions, it could be a good option to seek advice from an outsourced cannabis CFO, especially when considering the additional experience these professionals have across the industry.
#5: A Fractional CFO Offers More Expertise & Knowledge
Part-time CFOs can fulfill your cannabusiness’s financial obligations with expertise and knowledge leading the way. This comes without the high costs of a full-time employee.
With cannacompanies being able to afford this high-value resource at a fraction of the price, this allows them to allocate more to other aspects of their business. This means more money towards business strategy and planning than they’d otherwise have available.
You can also use a fractional CFO to help you set your accounting system. For instance, when we onboard our clients, we create off-line Excel (or Air Table) based sheets to track inventory movements and values and input the final inventory value in QuickBooks Online (QBO).
For cannabusinesses starting their operations, having the knowledge a CFO possesses on-hand – without the high cost of hiring full-time – is invaluable. These part-time team members offer incredible value without the hefty price tag, leaving more money to act upon any suggested recommendations.
Regardless of where your cannabusiness is financially, you have needs that we can fulfill with our fractional cannabis CFO services. Feel free to contact us with any questions regarding these part-time services.