You already know that a Chief Financial Officer (CFO) is a key part of the senior management team, responsible for overseeing and managing the financial aspects of the business. What you may not know, is that a CFO plays a pivotal role in ensuring a successful exit strategy for business owners. Beyond managing finances, the CFO is an integral part of the leadership team, working alongside the leadership team to drive value acceleration.
There is no role within a business that is better positioned than a CFO to help build value and ensure that the company is positioned for a successful exit.
A CFO is forward-focused. They proactively collaborate with business owners to chart a financial roadmap for the company, aligning the numbers with the business strategy and goals.
When that CFO is also a Certified Exit Planning Advisor® - magic happens. We call this the “CEPA Inside.” The “CEPA Inside” is perfectly positioned to keep the transformative work needed for an exit strategy front and center.
In the Value Acceleration process, the Protect and Build Stages span the longest period, often extending over 3-7+ years. The presence of a consistent advisor helps ensure a smooth, successful exit down the road.
Most exit planning advisors aren’t in the position to dedicate this amount of time helping their clients build value and prepare for a transition. A CFO, on the other hand, is the ideal advisor for this stage. As the “CEPA Inside,” they are available to provide long-term, continuous guidance to help business owners strategically navigate these stages. CFOs provide forward-thinking financial plans, provide strategic leadership, and navigate growth. “As companies grow, their portfolio of products and services can be silently killing their value,” explains FocusCFO’s Darren Cherry, CEPA and Columbus Area President. “Sometimes it is not about doing things right, but about doing the right things.”
A CFO can ensure that businesses are focusing on the right things, driving value acceleration by:
Successful Protect and Build stages position the business for a successful exit. It ensures that the business reaches a valuation that is aligned with the owner's personal and business goals. A skilled CFO will work with the business owner early on to identify their goals. Once identified, the CFO keeps the transformative work needed to achieve those goals front and center.
When the time is right to transition from ‘Build’ to the ‘Harvest’ stage, the business is better positioned for a successful exit or transition. As the transaction advisory team is assembled, the CFO will be a key participant as they:
In 2023 the average salary for a full-time CFO was over $400,000 – not in reach for many small and medium-sized businesses. But most would strongly benefit from such executive financial guidance. This is when a Fractional CFO should be strongly considered.
Not all Fractional CFOs are created equal - to effectively drive the Value Acceleration methodology, it is essential that this part-time CFO be:
A part-time embedded CFO is the only type of Fractional CFO that is suited for the tough, long climb of value acceleration as the “CEPA Inside.”
The bottom line is that if your client is focused on building their business value, you will want to consider a CFO. True Fractional CFOs (see above) provide the same level of financial expertise, but at an investment and schedule that will work for your client.
At FocusCFO, we firmly believe that an exit strategy is simply good business strategy. As such, it is an integral part of our service delivery methodology - for all clients. Our CFOs embed themselves on the leadership team, bringing dedication, C-level experience, and the benefit of the shared experience of 150+ associates.
To learn more about partnering with FocusCFO, please reach out today!
Our proven process aligns with the Exit Planning Institute’s Value Acceleration Methodology - making us a terrific partner to help your clients get their business transition ready!