What Value Should You Expect from a CFO Consulting Firm?
When deciding to engage a CFO consulting firm for assistance in meeting financial and operational challenges, mid-sized business owners and CEOs usually have a certain expectation in terms of what defines a successful engagement. Or in other words, they usually expect to receive clear business value from the engagement.
Different owners and CEOs tend to define target value in different ways. But one thing they almost all have in common is the need for assurances that they and a CFO consulting firm will share clear understandings of the type of value desired from the engagement, as well as what success will look like and how it will be measured.
Pre-Engagement Clarity is Critical
Unfortunately, some owners and CEOs have had experiences with CFO consulting firms that over-promised and under-delivered. Without pre-engagement clarity and mutual understanding when it comes to the type of value expected from an engagement and how success will be measured, there can be time and cost overruns to the engagement. This can lead to a failure to realize targeted value outcomes.
There are four main types of target value that can be realized when hiring a CFO consulting firm to help you meet financial and operational challenges:
1. Tangible Value — Tangible value relates to areas like higher profitability, increased shareholder value and faster growth. The CFO consulting firm will work closely with you and your managers to determine the root causes of any financial or operational problems, resolve these issues and improve performance in such areas as:
- Sales and revenue
- Return on Investment (ROI), Return on Equity (ROE) and Return on Assets (ROA)
- Mergers & Acquisitions (M&A), Initial Public Offerings (IPOs) and divestitures
- Cost structure and profit margins
- Treasury management
- CAPEX funding and allocation
2. Intangible Value — Value often goes beyond numbers and other key performance indicators (KPIs) that can easily be monitored and measured. A CFO consulting firm can add Intangible value to an organization by helping leaders improve execution, make better decisions, streamline processes, boost productivity, mitigate risk and be more proactive. Improvements in intangible areas like these tend to result in recognizable ROI for organizations.
3. Future Value — When a CFO consulting firm delivers solutions that help you improve tangible and intangible performance, your business will reap ongoing dividends by realizing positive results in a number of different areas. These include improved decision outcomes, more operational control, enhanced flexibility, better opportunity readiness and long-term cost savings.
In short, by taking advantage of best-practice elements that are part of the solutions offered by a CFO consulting firm, you’ll be well-positioned to realize additional value in the future.
4. Personal Value — If you’re like many business owners and CEOs, you place tremendous personal value on your business and your work. Therefore, you will reap personal value from an engagement with a CFO consulting firm through sharper clarity, increased confidence, more certainty and predictability, improved control and greater peace of mind.
Tapping Expertise As You Need It
In addition to realizing these four types of target value, you will also benefit from the nature of the CFO consulting model. Instead of hiring a full-time CFO, which you might not need and also might not be able to afford, you can tap into the CFO consultant’s high-level financial and operational expertise on an as-needed basis. By engaging a CFO consulting firm, you’ll benefit from proven financial leadership and expertise at a fraction of what it would cost you to hire a full-time CFO. You can then reinvest the money you save into other high-return areas of your business.
When deciding to engage a CFO consulting firm, business owners and CEOs usually have a certain expectation in terms of what defines a successful engagement. Different owners and CEOs tend to define target value in different ways, but one thing they almost all have in common is the need for assurances that they and the CFO consultant will share clear understandings of the type of value desired from the engagement. Contact us to learn more about the value your business could realize by engaging a CFO consulting firm.
Arthur F. Rothberg, Managing Director, CFO Edge, LLC