After a sustained period of growth, family business owners often find themselves in a tricky position. The business now requires an experienced professional to take charge of the finances, but hiring an in-house finance director is still out of reach. In this case, it’s time to think about hiring a virtual finance director (VFD) to lighten the load and ensure that your family business continues to achieve success. Let’s look at five reasons to hire a virtual FD.
1. Your Business has Grown
When you first start out, managing your finances alone, or with the help of a few team members, may suffice. However, as your family business grows, the financial management becomes ever more complex and demanding. You may find yourself in a position where you require professional help but cannot yet afford to hire a full-time financial director. A virtual FD gives you the best of both worlds.
Hiring a virtual FD is more affordable than hiring an in-house position because a virtual FD will work remotely and on a part-time basis, therefore significantly reducing the cost. However, you will still gain access to top level financial management.
Working with a virtual FD gives you the ability to scale your services as your requirements change. This flexibility means that hiring a virtual FD is far less risky than shelling out for an in-house hire.
3. Cash Flow Management
Often, it feels as though business growth and cash flow issues go hand in hand. When you first start your family business, you may be just about able to manage cash flow by yourself but as your company grows, failing to enlist the help of an expert presents a huge gamble for your family business. In fact, according to a U.S. Bank study, poor cash flow management contributes to 82% of family business failures.
A virtual FD will monitor your cash flow, create projections and allow your family business to grow sustainably whilst ensuring that your cash flow stays healthy. You’ve worked incredibly hard to reach your current level of success, so don’t risk it now.
4. A Fresh Perspective
Virtual FDs work with many different clients which gives them vast experience of varying company ideas, family business models and management styles. This experience can prove hugely beneficial, as your virtual FD will be able to offer valuable new insights and introduce different perspectives. As a family business owner, you have a relatively narrow perspective of your industry whilst your virtual FD has access to a much broader view.
5. Handling Multiple Responsibilities
A virtual FD saves you a huge amount of time by handling multiple financial responsibilities at once, including:
- Payment processing
- Credit control
- Tax planning
- Cash flow management
- Reviewing business performance
- Financial forecasting
- Recruiting and managing financial staff
- Offering financial insight
- Preparing annual budgets and monthly management accounts
By hiring a virtual FD you are outsourcing a wide range of financial responsibilities, saving you and your team a huge amount of time, which can be re-invested in growth. Furthermore, with a virtual FD handling the above responsibilities, you can be confident that your family business will remain in great financial health as it continues to grow.
Hiring a virtual FD is a flexible and affordable way of ensuring that your family business is well prepared for the financial challenges that inevitably come with growth and expansion. A virtual FD can handle multiple responsibilities at once, freeing up your time and providing you with expert financial guidance to help you plan for future success. Most importantly, a virtual FD gives you access to top-level financial advice without breaking the bank, so if your family business is growing, it’s time to consider hiring one.