As small businesses that are built on skill at what they do, a lot of restaurants don’t even think of hiring a part-time Chief Financial Officer (CFO). Just say the word “CFO” and many such business owners will go to great lengths explaining why they don’t need one.
Have you noticed how restaurant businesses seem to open their doors full of optimism only to close in the doldrums just a few months or years later? More than half of them will put up the shutters within the first six months.
Here’s the news you need to know: it’s not a question of whether you can afford a part-time CFO. Instead, you need to ask yourself whether you can afford NOT to have one.
What is A CFO?
A CFO is a business executive who helps you to manage your business’s financial matters. This professional will track your cashflow, plan for your business’s financial well-being and look into the financial strengths and weaknesses inherent in your business. It’s his or her job to pre-empt financial trouble and to suggest ways in which any negative trajectory detected can be countered.
Plan and Budget Effectively
Some things just shouldn’t be played by ear. As the saying goes, “If you fail to plan, you plan to fail,” and financial failure is the number one reason why businesses with lots of potential go under.
You might think you’ve got a handle on things, but what if there’s something you didn’t take into account? Can your business survive?
Maybe you’re considering expanding your business. Do you have enough capital? How long will it be before you begin to see a return on your investment? You need someone with financial expertise to help you with the analysis.
Grow Your Profits
You’ve been working long hours. There’s no shortage of customers. But at the end of the financial year, you found that your profits just aren’t what they should be – you could even have made a loss. You’re thunderstruck. After all your hard work, you haven’t made the money you deserve. What went wrong?
A part-time CFO will analyse your balance sheets throughout the financial year and give you both the good news and the bad. You’ll know where you are making money and where you’re losing it – and you’ll get timely advice on how to avert disaster and even boost your profits.
Maybe, things have been going really well, and you’ve decided to up the ante. Perhaps you’re considering renovations, opening a new branch, or investing in new equipment. There’s just one problem: you need to raise some capital. No lender or investor is going to put money into your business if they’re not sure there’s a good business case in favour of doing so. Just saying you think there is one isn’t going to cut the mustard.
What you need is someone who can compile and present the facts and figures. Excellent cuisine is your specialty, analysing financials and talking money matters is your CFO’s.
Track Your Business’s Financial Health
Even the best budgets often need to be adjusted owing to unforeseen circumstances, but quite often, smaller businesses don’t have budgets, and if they do, they don’t track them effectively.
A small variation in one month wouldn’t be a train-smash, but what if deviations from budget occur every month, mounting up almost unnoticed until you see your year-end balance sheet or hit a cash flow crunch? By then, it’s too late for tears.
CFOs keep on top of the things you probably don’t have time to track or even notice. Is income what it should be? Are expenses over or under budget? Should you expect a cash flow shortfall and what can you do about it? Your CFO won’t just answer these questions – he or she will raise them and provide you with possible answers.
A Part-Time CFO Helps You Business to Fulfill Its Potential
Hiring a full-time CFO isn’t something most smaller businesses can afford. But that doesn’t mean you need to do without one. While some business owners may balk at this “expense,” the far-sighted will see the benefits of having financial management expertise on their side.
It’s not just a matter of keeping the business afloat – it’s a matter of fulfilling the reason why every business exists: making the best profit possible. If you’d like to find out more about a part-time CFO for your restaurant business, make an appointment with us. Our highly-qualified professionals are ready to help you take your business from “good” to “great!”