Your Fractional CFO is your Air Traffic Controller

By: Craig Macfie

How much cash runway does your business have?

I write this during harvest time when many of my farm clients are crisscrossing the countryside bringing in the harvest. I receive calls and messages from them while they work long hours and enjoy the harvest views out their dashboard. Meanwhile, I am working at my desk as their fractional CFO although sometimes it feels like an air traffic controller.

Not every business needs an air traffic controller. Some businesses are neither taking off with growth or descending into a restructuring or refinancing situation. Meanwhile other business ventures should be grounded and never take off in the first place. Businesses with steady to no-growth can be well served by their bookkeeper, CPA, and perhaps occasional management consultant.

One of the fundamental questions for the fractional CFO is determining how much cash runway your business has. Running out of cash runway is a crisis and involves running your business in crisis mode. Sometimes vendor payments are delayed and in extreme situations payroll is missed.

Your fractional CFO helps determine your cash runway by building a cashflow forecast. They must consider future sales and gross margins, and build expense schedules to capture cash outflows.

Like an air traffic controller juggling multiple airlines, your fractional CFO is juggling multiple clients. It is not economical for airlines to build their own airport. Nor is it economical for many businesses to hire a full-time CFO. Meanwhile, many business owners can benefit from executive-level assistance to help navigate their business through turbulent economic times. Clear, timely, and consistent communication is important for fractional CFO’s to put your business on the right flight path.

Even while working remotely, Fractional CFO’s can spot issues from afar using key financial metrics. However, they will often need to get into the nuts and bolts of the business to recommend solutions. Often these solutions are consequential decisions affecting the future of your business.

And so that is the value of hiring an experienced fractional CFO - an executive embedded into your company on a part-time basis to help drive strategy and future direction.

Craig Macfie, CPA, PAg, provides fractional CFO services to growing farms and agribusinesses. Find out more at www.springcfo.com