The rise of the Fractional CFO

This flexible solution gives businesses access to high-level financial know-how without the commitment of a full-time hire - making it a great fit for smaller organisations ready to invest in sharper decision-making and a sturdier foundation. 

Unlocking your company’s true potential

For many SMEs, hiring a full-time CFO just isn't practical. A fractional CFO provides all the benefits of seasoned financial leadership, but on a part-time or project basis. It's not just about managing the money - it's about unlocking your company's true potential and building a business that's ready to thrive, no matter what the future holds. 

A CFO brings clarity to the bigger picture, uncovering opportunities to boost profits, plan for lasting growth, and tackle complex financial challenges. They bring different skills depending on what a business needs. Their focus can vary, from helping a company grow to handling day-to-day finances or guiding big changes. Here are a few examples: 

• Strategic CFO: Helps plan for the future, making sure financial goals align with the company's long-term vision. 

• Transformational CFO: Guides businesses through major changes, like a merger or a new direction, to ensure a smooth process. 

• Startup / Rapid growth CFO: Supports businesses looking to expand by creating plans to handle rapid growth. 

• Operational CFO: Focuses on improving everyday financial tasks, like budgeting and reporting, to keep things running smoothly. 

Each type brings something unique, helping businesses tackle their specific challenges and move forward with confidence. 

As one client puts it: “From the very beginning of our investment process our deal teams are assessing the abilities of the finance function within a business. Not having a CFO isn’t necessarily a deal breaker, but having well-presented financial data is a value driver – as a business owner you’ll almost certainly get a better valuation if you have everything packaged accurately.” 

Think about that for a moment. Your agency's value isn't just about your client list or creative work – it's about how well you handle the money side too. 

Embracing the fractional advantage 

Post-pandemic shifts have accelerated the trend, with agencies seeking expertise that can adapt to their evolving needs. Employing a fractional CFO allows agencies to benefit from seasoned professionals who bring strategic insights, help establish robust financial systems, and provide guidance on potential opportunities. 

Most agency owners are brilliant at what they do. They can spot a terrible font from 100 paces or craft the perfect social media campaign in their sleep. But ask them about cash flow projections and strategic financial planning, and suddenly things get a bit foggy. 

Involve a CFO right from the start

The most compelling advice comes from those who've seen agencies grow: "The biggest mistake is not hiring a first CFO soon enough. It’s important to have someone setting up your finance and reporting systems early on and to establish best practice in this element of the business. Businesses might not require someone full-time, but they can find some amazing experienced individuals who do what we refer to now as ‘fractional’ work – one, two, or three days a week! The key things to look for in a CFO are; attention to detail, integrity, and high standards.” 

To meet the growing demand, RedHat has established a dedicated team to connect agencies with experienced CFOs who can slot in with a high degree of flexibility. With arrangements spanning one day a month to a couple of days a week, depending on the needs of the business, it really is worth exploring as a possibility. It’s also a great option that can scale up or down as things change over time, giving you maximum value for money.

In today's business landscape, having a strategic financial partner isn't just nice to have – it's increasingly essential for agencies looking to grow. If you're spending more time worrying about money than doing the work you love, it might be time to talk to RedHat and discover how a fractional CFO could transform your agency.

The opinions expressed here are those of the authors and were submitted in accordance with the IPA terms and conditions regarding the uploading and contribution of content to the IPA newsletters, IPA website, or other IPA media, and should not be interpreted as representing the opinion of the IPA.