The Fractional CFO Firm to Early Stage Pioneers
From A CFO: If Your Company Is Doing Under $25mm in ARR, You Should Not Hire a Full-Time CFO
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For early-stage companies, there comes a point in time when the accounting and finance operation becomes more complex and critical to success. However, hiring a full-time CFO before your company reaches $25 million in Annual Recurring Revenue (ARR) is usually overkill—and an unnecessary strain on precious resources. Here's why opting for a fractional CFO or outsourced firm is a smarter choice for young businesses still scaling.
1. Cost Efficiency Matters
The average base salary for a full-time CFO can range from $200,000 to $400,000 annually, not including bonuses, equity, benefits, PTO, sick days, annual raises, etc. For companies under $25mm ARR, this is a huge expense! At this stage, most companies are focused on efficient capital allocation to grow sales and marketing, develop their products, and scale operations. Hiring a full-time CFO diverts significant cash resources that could be better used to fuel growth initiatives and product enhancements to meet customer demands.
Instead, a fractional CFO provides the same expertise and leadership at a fraction of the cost. You get the financial insights needed to make informed decisions, without the full-time salary burden, recruiting expense, and separation risk that comes with full-time hires.
2. Complexity Doesn’t Justify a Full-Time Hire
While financial responsibilities grow as your company scales, businesses under $25mm ARR typically do not yet have the financial complexities that warrant a full-time CFO. At this stage, your company likely needs help with:
- Cash flow forecasting
- Budgeting and financial planning
- Fundraising support
- Financial reporting
- Investor relations
- Tax compliance
These functions can be managed efficiently by a fractional CFO or outsourced firm like Till CFO, where you get a flexible solution tailored to your growth stage and your company’s unique needs.
3. You Need Strategy, Not Just Reporting
At early growth stages, businesses need financial insights to make smarter decisions. A full-time CFO can be overqualified for the day-to-day tasks involved. What companies under $25mm ARR need is a financial expert who can provide part-time strategic advice and operational support, aligning the finance function with business growth, without getting bogged down in routine tasks.
With a fractional CFO, you have the benefit of seasoned expertise available on-demand. This ensures you have the right level of support when key financial decisions need to be made, from fundraising to headcount planning to scaling operations.
4. Flexibility to Grow with Your Company
Outsourcing financial leadership offers flexibility that a full-time CFO cannot. As your business scales beyond $25mm ARR, your financial needs will grow too. With fractional CFO services, you can scale the level of financial leadership as required—whether that means bringing in more strategic insight during a fundraising round or focusing on cost optimization during lean periods.
The key advantage of outsourced services is that they grow with you and you can scale service levels up or down, allowing you to control costs while receiving high-level support as your business moves through various stages of growth.
5. Focus on What Matters Most: Your Customers, Team, and Growth
Early-stage companies need to focus on growth and scaling, not on the financial overhead associated with a full-time CFO and the various support staff he or she would need (FP&A Analyst, Controller, Bookkeeper, etc.). By choosing a fractional or part-time CFO, companies can remain lean and nimble, focusing on core operations, customer acquisition, and product development. Financial oversight is critical, but it doesn't have to come in the form of a high-cost, full-time hire.
Conclusion: Keep Your Focus on Scaling
If your company is under $25mm ARR, you likely don’t need the burden of a full-time CFO. Instead, leveraging outsourced financial expertise to a resource who has the requisite experience in your industry can give you the strategic insights you need, cost-effectively. At Till CFO, we specialize in helping growth-stage SaaS, FinTech, and Services businesses scale with flexible financial leadership, so you can focus on what truly matters—building your business.
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About Till CFO
At Till CFO, we provide flexible and scalable financial leadership to high-growth businesses. From financial planning and analysis to strategic fundraising support, our seasoned fractional CFOs are here to help you navigate each stage of growth efficiently.
Schedule your free assessment call today at https://www.tillcfo.com/contact.
