Ready to level up your profits? Discover what a fractional CFO can do for your e-commerce brand and how they can help you scale.
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Ecommerce has revolutionized the way that we do business. Technology has had an enormous impact on companies across the globe, changing the very structure of traditional business hierarchies in many cases. A Chief Financial Officer (CFO) was once considered a necessary, full-time, and invaluable position within businesses. Now, however, many web-based companies are realizing that employing a fractional CFO is a smarter and more financially viable option.
Before we jump into the benefits of hiring a fractional CFO, let’s first better define this term and discuss how this position fits into a modern business model.
Ecommerce Fractional CFOs offer online businesses the expertise of seasoned financial professionals on an as-needed basis. By working part-time or only on specific projects, fractional CFOs are able to provide ecommerce financial planning and strategic financial guidance at a fraction of the cost of a full-time CFO. This approach ensures companies can access high-level financial insights without the monetary commitment of a full-time position.
An effective and established fractional CFO will be well versed in ecommerce financial operations and management. They will have years of experience and a firm grasp on their key responsibilities within any company. These responsibilities include:
Their expertise allows businesses to do financial forecasting and make informed decisions without the overheads of a full-time role. For ecommerce companies, this can be the difference between profitability and failure. A full-time CFO is not a cheap position to fill.
One of the key responsibilities of a fractional CFO is providing recommendations that can help increase profitability and efficiency. These are both important factors in any business’s long term success and ability to grow. By acting as an ecommerce growth consultant and providing insights on how to improve overall profitability and efficiency, fractional CFOs help make sure business growth is trending in the correct direction. Some of the ways in which fractional CFOs help increase profitability, efficiency, and ultimately growth include:
The ecommerce landscape is dynamic and perpetually changing. Having a seasoned ecommerce fractional CFO that understands this can help your ecommerce company make growth possible.
With the concept of a fractional CFO defined, we can now discuss if a fractional CFO has benefits over those provided by a traditional CFO. While traditional, full-time CFOs will always be present in certain industries, this section will discuss why a fractional CFO is an overall better fit for ecommerce businesses.
It goes without saying that fulfilling the duties of a position with a part-time employee is more cost-effective than if these duties were accomplished by a full-time employee. By hiring a part-time CFO for ecommerce, businesses gain top-tier financial expertise in situations where it is necessary without the hefty overhead of keeping an employee on the payroll full time. Fractional CFOs generally have flexible engagement models that cater to fluctuating business needs, allowing companies to utilize their services for specific tasks or during peak periods. This adaptability, combined with the broad experience many fractional CFOs possess, allows businesses to swiftly navigate financial challenges while maintaining fiscal efficiency and avoiding long-term commitment.
Hiring a fractional CFO grants businesses access to elite financial talent that might be financially out of reach in a traditional full-time hiring model. Hiring a top-tier fractional CFO specifically for an expected period of growth can help propel your business to more financial stability and gain. With their diverse industry experience, fractional CFOs bring a breadth of knowledge typically reserved for large corporations. In essence, smaller ecommerce businesses can get top-tier financial expertise without the financial burden of hiring someone on full-time.
Sometimes a business can benefit from an objective perspective. This is where fractional CFOs excel, as they are not influenced by internal biases and are able to offer impartial financial advice and strategic planning. Additionally, since they are not burdened by day-to-day organizational distractions, fractional CFOs are able to focus on specific areas of need within the business, allowing them to optimize overall efficiency and financial performance. Their experience from working with a multitude of different companies allows them to create focused financial strategies that align with business goals and provide clear-cut solutions that may be overlooked by someone closely tied to daily operations.
There are a multitude of fractional CFOs that specialize in providing services to ecommerce businesses. So how do you select the right fractional CFO for ecommerce? Below we will discuss key considerations in hiring, the importance of establishing a strong partnership, and how to ensure your company’s financial data and confidentiality is secure.
With so many fractional CFO options at your disposal, finding someone whose experience and expertise align with your needs and goals is crucial. Some of the key factors you should consider when hiring a fractional CFO include:
A fractional CFO is not going to magically make your ecommerce business more profitable entirely on their own. Finding someone you feel comfortable working with and establishing a collaborative relationship is crucial. In doing so, you can help them integrate into your current business operations seamlessly and be better equipped to provide effective financial guidance. The efficiency and effectiveness of a financial CFO hinges on productive communication and mutual understanding.
Data security and confidentiality are always potential concerns when filling a role with someone out of house. Before working with an external financial professional, ensure that they function in compliance with industry regulations. Be sure that your intellectual property (IP) is protected and employ the use of NDAs if necessary. While there should be some level of trust between you and your fractional CFO, it’s always good practice to follow standard procedure with regards to security and confidentiality.
Hiring a fractional CFO can help you grow your ecommerce business and set yourself up for long-term financial success. By opting for a fractional CFO over a traditional full-time CFO, you can gain expert financial and strategic insights without breaking the bank. The professionals at Propeller Industries are here to provide your ecommerce business with the financial modeling and guidance it needs for substantial growth and serious financial gains. Help us help you propel your ecommerce business towards success. Contact us today to learn more about our ecommerce CFO services.